AQUABOUNTY TECHNOLOGIES INC

As disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed on March 31, 2026, there are a number of risk factors that could affect our business, financial condition, and results of operations. The following risk factors are either new or have changed materially from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. In evaluating our business, you should carefully review the risks described in our Annual Report on Form 10-K, including our consolidated financial statements and related notes, and in other reports we file with the SEC. We cannot assure you that any of the events discussed in the risk factors below will not occur. These risks could have a material and adverse impact on our business, results of operations, financial condition, or prospects. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment.

This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below, elsewhere in this Quarterly Report on Form 10-Q, and in our Annual Report on Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements” for information relating to these forward-looking statements.

We have a history of net losses and expect to incur future losses, and there is substantial doubt about our ability to continue as a going concern.

In the period from incorporation to March 31, 2026, we have incurred cumulative net losses of approximately $389 million, and we expect to incur additional net losses in future periods. These losses were related to our personnel, research and development, production and marketing costs. As of March 31, 2026, we had $441 thousand in 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 acceptable terms, or at all. This raises substantial doubt about our ability to continue as a going concern within one year after the date hereof. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us.

The issuance of Series A Convertible Preferred Stock may adversely affect our liquidity, governance, and the rights of holders of our common stock.

On April 7, 2026, we issued shares of Series A Convertible Preferred Stock in a private placement, including in exchange for outstanding indebtedness. The Series A Convertible Preferred Stock has rights senior to our Common Stock, including cumulative dividends, a senior liquidation preference, redemption rights in certain circumstances, and conversion rights into Common Stock. Dividends accrue cumulatively at a high rate and are payable only if declared by our Board of Directors out of legally available funds, and unpaid dividends continue to accrue, increasing our obligations and potentially exacerbating our liquidity constraints.

The conversion of the Series A Convertible Preferred Stock could result in significant dilution to holders of our Common Stock and may adversely affect the trading price of shares of our Common Stock. In addition, the Series A Convertible Preferred Stock includes protective provisions requiring preferred stockholder approval for certain corporate actions, which may limit our operational and financing flexibility. In a liquidation, insolvency, or change of control, holders of shares of Common Stock may receive little or no value after satisfaction of creditor claims and the Series A Convertible Preferred Stock liquidation preference.