AQUABOUNTY TECHNOLOGIES INC
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
AQB$0.98+3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001603978-24-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001603978-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 55 current paragraphs.
19 unchanged; 12 reworded; 24 added; 30 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
AquaBounty has historically pursued a growth strategy that included the construction of large-scale recirculating aquaculture system (“RAS”) farms for producing our genetically engineered Atlantic salmon (“GE Atlantic salmon”). We had commenced construction of a 10,000 metric ton farm in Pioneer, Ohio (the “Ohio Farm Project”), but paused the construction in June 2023, as the cost estimate to complete the farm continued to substantially increase due to inflation and other factors. Further, these cost increases impaired our ability to pursue municipal bond financing, which was a necessary component of our funding strategy. We subsequently engaged an investment bank to pursue a range of funding and strategic alternatives, and to assist management in the prioritization of our core assets. These efforts resulted in the sale of our grow-out farm in Indiana (“Indiana Farm”) in July 2024, recurring sales throughout the remainder of 2024 and the first quarter of 2025 of selected equipment originally intended for the Ohio Farm Project (the “Ohio Equipment Assets”), and the sale of our Canadian subsidiary, including the broodstock farms owned by the Canadian subsidiary in Prince Edward Island, Canada (“Canadian Farms”), and our intellectual property for the GE Atlantic salmon, along with trademarks and patents (“Corporate IP”) in March 2025. After completion of these transactions, our primary remaining asset is our investment in the Ohio Farm Project, consisting of the remaining Ohio Equipment Assets and the land and construction in process (the “Ohio Farm Site”). We continue to work with our investment bank to identify the optimal path forward for realizing the potential of this asset, either through new investment, partnership or other strategic options.
Current report
Discontinued Operations
Current report
As noted above, we sold our Indiana Farm in July 2024 and our Canadian Farms in March 2025. These farms have been designated as discontinued operations in our condensed consolidated financial statements for the quarter ended March 31, 2025 and 2024 in this Form 10-Q (see Note 5 to our condensed consolidated financial statements for additional information).
Current report
With the winding down of our fish rearing operations, we have significantly reduced our headcount and on-going operating costs. We maintain a small core group of corporate individuals to oversee our strategic options, our asset sale transactions and our books and records. As of March 31, 2025, we had an accumulated deficit of $369 million and $1.4 million in cash and cash equivalents on our interim condensed consolidated balance sheet. We require new funding to provide liquidity for working capital and to fund the completion of our Ohio Farm Project. Consequently, our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on acceptable terms, or at all.
Current report
Sales and Marketing Expenses
Current report
Research and Development Expenses
Current report
With the sale of our Canadian Farms in March 2025, we no longer have research and development operations.
Current report
General and Administrative Expenses
Current report
Gain on Asset Sales, Net
Current report
Includes the gains realized on the sale and additional impairments of Ohio Equipment Assets that are Held for Sale.
Current report
Other Income (Expense), Net
Current report
Loss from Discontinued Operations
Current report
Loss from Discontinued Operations includes all operating costs for our Indiana Farms and our Canadian Farms, including fish and egg production costs, sales and marketing, research and development, general and administrative expenses, non-cash long-lived asset impairment charges, a net realizable value adjustment of inventory, interest expense and banking fees.
Current report
Sales and Marketing Expenses
Current report
Sales and marketing expenses for the three months ended March 31, 2025, were down from the corresponding period in 2024 due to decreases in personnel costs and program spending related to the sale of our Indiana Farm and Canadian Farms.
Current report
Research and Development Expenses
Current report
General and Administrative Expenses
Current report
Gain on Asset Sales, Net
Current report
During the period ended March 31, 2025, the Company sold certain Ohio Equipment Assets for net proceeds of $2.3 million, that were partially impaired in 2024, and further impaired other Ohio Equipment Assets. The net result of these sales and impairments was a gain of $307 thousand.
Current report
Other Income (Expense)
Current report
Loss from Discontinued Operations
Current report
The loss from discontinued operations for the three months ended March 31, 2025 was comprised of all remaining operating costs for our Indiana Farm and our Canadian Farms, primarily fish and egg husbandry costs, general and administrative expenses and interest expense and banking fees. For the three months ended March 31, 2024, the loss was comprised of all operating costs for our Indiana Farm and our Canadian Farms, including fish and egg production costs, sales and marketing, research and development, general and administrative expenses, non-cash long-lived asset impairment charges, a net realizable value adjustment of inventory, interest expense and banking fees.
Current report
During the three months ended March 31, 2025, we received $3.7 million from the sale of assets, and during the three months ended March 31, 2024, we spent $1.1 millionfor construction activities at our farm sites and the purchase of equipment.
Current report
During 2024, we completed the sale of our Indiana Farm, along with certain Ohio Equipment Assets for net proceeds of $9.2 million. We also focused on cost containment to preserve and extend our available cash. In February 2025, we completed an auction of certain Ohio Equipment Assets for net proceeds of $2.3 million, and in March 2025, we completed the sale of our Canadian Farms for net proceeds of $1.9 million. Going forward, we plan to continue to sell available Ohio Equipment Assets to increase our cash liquidity and fund our working capital and the construction of our Ohio Farm Project.
Removed paragraphs (30)
Previous report
We believe that we are a distinctive brand in land-based aquaculture. As a vertically integrated Company, we have decades of experience in farming Atlantic salmon from broodstock to grow out. We leverage our operational expertise and advances in fish breeding, genetics, and health and nutrition, to deliver innovative solutions that address food insecurity and climate change issues. Our land-based farms utilize recirculating aquaculture systems, which are designed to prevent disease and include multiple levels of fish containment designed to protect wild fish populations. Our primary farming principle is to raise nutritious salmon that is free of antibiotics and located close to key consumption markets, in a manner that is good for the environment, good for the fish and good for consumers.
Previous report
Until 2024, our primary product was our GE Atlantic salmon, which received FDA approval in 2015 as the first genetically engineered animal available for sale for human consumption. Although we commenced commercial activities in 2021 with operations in the United States and Canada, we are not currently growing our GE Atlantic salmon for sale and consumption, as we have sold our Indiana farm and we have paused construction activities at our Ohio farm.
Previous report
We are engaged in genetic, genomic, fish health and fish nutrition research, which drive continuous improvement in our operations and may lead to new, disruptive technologies and products that could further expand our competitive offerings.
Previous report
Company Update
Previous report
We have been pursuing a growth strategy that includes the construction of large-scale recirculating aquaculture system farms for producing our GE Atlantic salmon. Our farm in Pioneer, Ohio was under construction and roughly 30% complete, but construction activities were paused in 2023. To fund the construction cost, we were using cash on hand, which was to be supplemented by a municipal bond financing. However, during the initial two years of construction, the cost estimate for the farm increased substantially and eventually exceeded our ability to complete the proposed financing. Consequently, we require new financing to provide liquidity for working capital and to fund the completion of our farm in Pioneer, Ohio. To meet this need, we have engaged an investment bank to pursue a range of funding and strategic alternatives, including the completed sale of our Indiana farm. We continue to pursue funding sources, including our decision to sell our Rollo Bay farm, the sale of non-core equipment assets from our Ohio farm, debt financing secured by our unencumbered assets, and potential strategic transactions.
Previous report
Inflation
Previous report
Recently, elevated global inflation rates continue to impact all areas of our business. We are experiencing higher costs for farming supplies, wage rates, and other direct operating expenses, as well as for capital expenditures related to the construction of our farm in Ohio. We expect inflation to continue to negatively impact our results of operations for the near-term.
Previous report
We expect our future capital requirements will be substantial, particularly as we continue to develop our business and expand our commercial activities.
Previous report
We have generated product revenue primarily through the sales of our GE Atlantic salmon, supplemented by sales of conventional Atlantic salmon, salmon eggs, fry, and byproducts. With the sale of our Indiana farm, our product revenues will consist of conventional Atlantic salmon eggs and salmon byproducts from our Fortune Bay farm on Prince Edward Island for the near term.
Previous report
Product costs include the labor and related costs for producing our Atlantic salmon eggs and to grow out our fish and fry, including feed, oxygen, and other direct costs; overhead; and the cost to process and ship our products to customers. A portion of production costs is absorbed into inventory as fish eggs or fish in process to the extent that these costs do not exceed their net realizable value. The costs that are not absorbed into inventory, as well as any net realizable value inventory adjustments, are classified as product costs.
Previous report
We recognize research and development expenses as they are incurred. Our research and development expenses consist primarily of salaries and related overhead expenses for personnel in research and development functions; fees paid to contract research organizations and consultants who perform research for us; and costs related to laboratory supplies used in our research and development efforts.
Previous report
Long-lived Asset Impairment
Previous report
In the first quarter of 2024, we commenced a process to identify a potential buyer for our Indiana farm. This decision resulted in a $4.3 million non-cash impairment charge against long-lived assets and a $1.0 million net realizable value adjustment of inventory at the Indiana farm. The impairment charge was based on the best available information at the time regarding the potential sale price for the farm.
Previous report
In the second quarter of 2024, we began marketing the Indiana farm for sale and on June 28, 2024, we signed a Purchase and Sale Agreement with a buyer for a sale price of $9.5 million less transaction expenses, which included certain equipment assets that had been purchased for our Ohio farm. Based on this agreement, we recorded an additional non-cash impairment charge of $18.2 million and classified the assets to be sold in the transaction as Assets Held for Sale on our condensed consolidated balance sheet at June 30, 2024. The transaction closed on July 26, 2024, and we received proceeds of $9.0 million at closing and $500 thousand on October 17, 2024. Related transaction expenses were $305 thousand.
Previous report
In the second quarter of 2024, we initiated a plan to sell additional equipment from our Ohio farm to generate liquidity, resulting in a non-cash impairment charge of $26.3 million. We sold some of this equipment for net proceeds of $506 thousand. The remaining equipment assets were classified as Assets Held for Sale on our condensed consolidated balance sheet at September 30, 2024.
Previous report
In the third quarter of 2024, we began to market our Rollo Bay farm on Prince Edward Island, Canada for sale and reclassified the net book value of $9.8 million for the associated assets as Assets Held for Sale on our condensed consolidated balance sheet at September 30, 2024.
Previous report
The decrease in revenue during the current period was primarily the result of the decrease in the sale of GE Atlantic salmon due to the sale of the Indiana farm.
Previous report
Product costs for the three months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to the sale of the Indiana farm.
Previous report
Sales and marketing expenses for the three months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs, marketing programs, and share-based compensation costs in our efforts to reduce operating spend.
Previous report
Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023
Previous report
The decrease in revenue during the current period was primarily the result of the decrease in the sale of GE Atlantic salmon due to the sale of the Indiana farm, partially offset by increased sales of conventional Atlantic salmon, eggs and fry from our Rollo Bay farm. The wind down of operationsat the Indiana farm required harvesting predominantly below-market sized fish, which impacted the average selling price during the current period.
Previous report
Product costs for the nine months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to the sale of the Indiana farm.
Previous report
Sales and marketing expenses for the nine months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs, marketing programs, travel, and share-based compensation costs in our efforts to reduce operating spend.
Previous report
Research and development expenses for thenine months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs and project spending in our efforts to reduce operating spend.
Previous report
General and administrative expenses for the nine months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs, state excise tax liabilities, share-based compensation costs, and travel, in our efforts to reduce operating spend, partially offset by increases in legal fees.
Previous report
Long-lived Asset Impairment
Previous report
During the nine months ended September 30, 2024, we recorded a non-cash asset impairment charge of $48.7 million against the long-lived assets of the Indiana farm and certain equipment assets of the Ohio farm. We determined the impairment charge, based on the estimate of the potential market value of the asset group to be sold or available for sale, net of selling costs, compared to the current net book value of those assets.
Previous report
Other expense for the nine months ended September 30, 2024 is comprised of interest expense, bank charges and gains or losses on asset sales, less interest income, and other expense for the nine months ended September 30, 2023 is comprised of interest expense and bank charges, less interest income. Interest expense in the nine months ended September 30, 2024 included the costs for our bridge loan.
Previous report
During the nine months ended September 30, 2024, we used $2.7 millionfor the purchase of property, plant and equipment at our farm sites, and we received $9.5 million from the sale of our Indiana farm and certain equipment from our Ohio farm. During the same period in 2023, we used $66.3 million for construction activities and the purchase of equipment at our farm sites.
Previous report
On July 26, 2024, we completed the sale of our Indiana farm, along with certain equipment assets from our Ohio farm for net proceeds of $9.2 million. We plan to sell our Rollo Bay farm and additional equipment assets from our Ohio farm in order to increase our cash liquidity and fund our ongoing operations.
Reworded paragraphs (12)
Previous wording
Our sales and marketing expenses currently include salaries and related costs for our sales personnel and agency fees for market-related activities.
Current wording
Our sales and marketing expenses currently include agency fees for investor-related activities.
Previous wording
General and administrative expenses consist primarily of salaries and related costs for employees in executive, corporate, and finance functions. Other significant general and administrative expenses include corporate governance and public company costs, regulatory affairs, rent and utilities, insurance, and legal services.
Current wording
General and administrative expenses consist primarily of salaries and related costs for employees in executive, corporate, and finance functions. Other significant general and administrative expenses include corporate governance and public company costs, regulatory affairs, rent and utilities, insurance, and legal services. We expect our general and administrative expenses to decrease as a result of our reduced operations.
Previous wording
Interest expense includes the interest on our outstanding loans and other interest expense. Other (expense) income, net includes bank charges, fees, gains or losses on asset sales, and interest income.
Current wording
Interest expense includes the interest on our loans and accounts payable for our continuing operations. Loan forgiveness relates to the termination of an outstanding loan. Other expense, net includes bank charges, fees, and interest income.
Previous wording
Research and development expenses for thethree months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs and project spending in our efforts to reduce operating spend.
Current wording
Research and development expenses for thethree months ended March 31, 2025, were down from the corresponding period in 2024, primarily due to decreases in personnel and project spending, as we no longer have research and development operations after the sale of our Canadian Farms.
Previous wording
General and administrative expenses for the three months ended September 30, 2024 were down from the corresponding period in 2023, primarily due to decreases in personnel costs, state excise tax liabilities, professional services, legal fees, share-based compensation costs, and travel in our efforts to reduce operating spend.
Current wording
General and administrative expenses for the three months ended March 31, 2025, were down from the corresponding period in 2024 due to reductions in personnel costs, legal fees, state excise tax liabilities, share-based compensation costs, and travel, partially offset by increases in professional services and audit fees.
Previous wording
Other expense for the three months ended September 30, 2024 is comprised of interest expense, bank charges and gains or losses on asset sales, less interest income, and other expense for the three months ended September 30, 2023 is comprised of interest expense and bank charges, less interest income. Interest expense in the three months ended September 30, 2024 included the costs for our bridge loan.
Current wording
Other income for the three months ended March 31, 2025 is comprised of the forgiveness of an outstanding loan and interest income, less interest expense and bank charges. Other expense for the three months ended March 31, 2024 is comprised of interest expense and bank charges, less interest income.
Previous wording
Net cash used in operating activities during the nine months ended September 30, 2024, was primarily comprised of our $65.1 million net loss, partially offset by non-cash depreciation and share-based compensation charges of $1.1 million, long-lived asset impairment charges of $48.7 million, and working capital sources of $2.5 million. Net cash used in operating activities during the nine months ended September 30, 2023 was primarily comprised of our $19.1 million net loss and working capital uses of $1.4 million, partially offset by non-cash depreciation and share-based compensation charges of $2.0 million.
Current wording
Net cash used in operating activities during the three months ended March 31, 2025, was primarily comprised of our $401 thousand net income, which included a $2.0 million non-cash gain on the forgiveness of an outstanding loan, non-cash share-based compensation charges of $40 thousand, and working capital uses of $795 thousand. Net cash used in operating activities during the three months ended March 31, 2024, was primarily comprised of our $11.2 million net loss, partially offset by non-cash depreciation and share-based compensation charges of $681 thousand, a long-lived asset impairment charge of $4.3 million and working capital sources of $1.8 million.
Previous wording
Spending on operations decreased in the current period, before the recording of non-cash asset impairment charges against the Indiana farm and certain equipment assets of the Ohio farm, due to reductions in personnel, marketing programs, outside research projects, professional services, and share-based compensation. Increases in cash provided by working capital was due to reductions in inventory and other current assets and increases in accounts payable and accrued liabilities.
Current wording
Spending on operations decreased in the current period due to reductions in personnel, farm operating costs, depreciation charges, and share-based compensation. Uses of cash from changes in working capital were due to increases in prepaid expenses and other assets, and decreases in accounts payable and accrued expenses.
Previous wording
During the nine months ended September 30, 2024, we received $6.8 million from new debt and made $9.5 million in term debt repayments. During the same period in 2023, we received $394 thousand from new debt and made $542 thousand in term debt repayments.
Current wording
During the three months ended March 31, 2025, we made $232 thousand in debt repayments. During the same period in 2024, we received $117 thousand from new debt and made $184 thousand in debt repayments.
Previous wording
Since inception, we have incurred cumulative net losses and negative cash flows from operating activities, and we expect this to continue for the foreseeable future. As of September 30, 2024, we had $500 thousand of cash and cash equivalents. Our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on terms acceptable to us, or at all. This raises substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued.
Current wording
Since inception, we have incurred cumulative net losses and negative cash flows from operating activities, and we expect this to continue for the foreseeable future. As of March 31, 2025, we had $1.4 million of cash and cash equivalents. Our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on terms acceptable to us, or at all. This raises substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued.
Previous wording
Until such time, if ever, as we can generate positive cash flows from operating activities, we may finance our cash needs through a combination of sales of non-core assets, equity offerings, debt financings, government or other third-party funding, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of holders of our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements, or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or to grant licenses on terms that may not be favorable to us.
Current wording
Until such time, if ever, as we can generate positive cash flows from operating activities, we may finance our cash needs through a combination of sales of non-core assets, equity offerings, debt financings, government or other third-party funding, and strategic alliances. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of holders of our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements, or other collaborations, or strategic alliances, we may have to relinquish future revenue streams, research programs, or product candidates or to grant licenses on terms that may not be favorable to us.
Previous wording
There have been no material changes to these estimates, or the policies related to them, during the nine months ended September 30, 2024. For a full discussion of these estimates and policies, see “Critical Accounting Policies and Estimates” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no material changes to these estimates, or the policies related to them, during the three months ended March 31, 2025. For a full discussion of these estimates and policies, see “Critical Accounting Policies and Estimates” within “Management’s Discussion and Analysis of Financial Results of Operations” in our 2024 Annual Report on Form 10-K.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023, together with the changes in those items in dollars and as a percentage (all dollar amounts in thousands):