AQUABOUNTY TECHNOLOGIES INC

Previous wording

AquaBounty has historically pursued a growth strategy that included the construction of large-scale RAS farms for producing our GE Atlantic salmon. We had commenced construction of our 10,000 metric ton 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 Indiana Farm in July 2024, recurring sales throughout 2024 and 2025 of selected Ohio Equipment Assets originally intended for the Ohio Farm Project, and the sale of our Canadian Farms, and our 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 Ohio Farm Site. We continue to work with an investment bank to identify the optimal path forward for realizing the potential of this asset, including its possible sale.

Current wording

AquaBounty has historically pursued a growth strategy that included the construction of large-scale RAS farms for producing our GE Atlantic salmon. We had commenced construction of our 10,000 metric ton 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 Indiana Farm in July 2024, recurring sales throughout 2024 and 2025 of selected Ohio Equipment Assets originally intended for the Ohio Farm Project, and the sale of our Canadian Farms, and our 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 Ohio Farm Site.

Previous wording

With the exit from 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, 2026, we had an accumulated deficit of $389 million and $441 thousand in cash on our condensed consolidated balance sheet. We require new funding to provide liquidity for working capital and to fund our evolving strategic plan. 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 wording

With the exit from 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 June 30, 2026, we had an accumulated deficit of $391 million and $1.9 million in cash on our condensed consolidated balance sheet. We require new funding to provide liquidity for working capital and to fund our evolving strategic plan. 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.

Previous wording

There were no sales and marketing expenses for the three months ended March 31, 2026, due to the sale of our Indiana Farm and Canadian Farms.

Current wording

There were no sales and marketing expenses for the three months ended June 30, 2026 or 2025, due to the sale of our Indiana Farm and Canadian Farms.

Previous wording

General and administrative expenses for the three months ended March 31, 2026 were down from the corresponding period in 2025, primarily due to reductions in personnel costs, audit fees, legal fees, insurance fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees.

Current wording

General and administrative expenses for the three months ended June 30, 2026, were down from the corresponding period in 2025, primarily due to reductions in personnel costs, legal fees, insurance fees, professional fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees.

Previous wording

The loss from discontinued operations for the three months ended March 31, 2026 was comprised of general administrative expenses and interest expense. 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.

Current wording

The loss from discontinued operations for the three months ended June 30, 2026, was comprised of general administrative expenses and interest expense. The loss from discontinued operations for the three months ended June 30, 2025 was comprised of a long-lived asset impairment, general and administrative expenses and interest expense and banking fees related to the Ohio Farm.

Previous wording

Other expense for the three months ended March 31, 2026 is comprised of interest expense and bank charges. 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.

Current wording

Other expense for the six months ended June 30, 2026, is comprised of interest expense and bank charges. Other income for the six months ended June 30, 2025 is comprised of the forgiveness of an outstanding loan and interest income, less interest expense and bank charges.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2026, was primarily comprised of our $1.2 million net loss, which included $300 thousand in non-cash interest and amortized loan costs, non-cash share-based compensation charges of $5 thousand and working capital uses of $125 thousand. 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.

Current wording

Net cash used in operating activities during the six months ended June 30, 2026, was primarily comprised of our $2.8 million net loss, which included $514 thousand in non-cash loan amortization costs, non-cash share-based compensation charges of $5 thousand and working capital uses of $33 thousand. Net cash used in operating activities during the six months ended June 30, 2025, was primarily comprised of our $3.0 million net loss, which included a $2.0 million non-cash gain on the forgiveness of an outstanding loan, non-cash share-based compensation charges of $57 thousand and an asset impairment charge of $1.2 million, and working capital uses of $206 thousand.

Previous wording

Spending decreased in the current period due to reductions in personnel and other general administrative costs, such as, audit fees, legal fees, insurance fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees. Uses of cash from changes in working capital were due to decreases in accounts payable and accrued expenses, partly offset by a decrease in prepaid expenses and other assets.

Current wording

Spending decreased in the current period due to reductions in personnel and other general administrative costs, such as, audit fees, legal fees, insurance fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees. Uses of cash from changes in working capital were due to decreases in accounts payable and accrued expenses and an increase in prepaid expenses and other assets.

Previous wording

During the three months ended March 31, 2026, there were no investing activities, and during the three months ended March 31, 2025, we received $3.7 million from the sale of certain Ohio Equipment Assets.

Current wording

During the six months ended June 30, 2026, there were no investing activities, and during the six months ended June 30, 2025, we received $4.6 million from the sale of assets.

Previous wording

During the three months ended March 31, 2026, we received $960 thousand in proceeds from the issuance of common stock and warrants. During the three months ended March 31, 2025, we made $232 thousand in debt repayments.

Current wording

During the six months ended June 30, 2026, we received $7.7 million in proceeds from the issuance of preferred stock, common stock and warrants and we made $4.0 million in debt repayment. During the six months ended June 30, 2025, we made $232 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 March 31, 2026, we had $441 thousand in cash balances. 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 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 June 30, 2026, we had $1.9 million in cash balances. 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 consolidated financial statements are issued.

Previous wording

On February 11, 2026, we completed an equity transaction with certain investors, pursuant to which we sold an aggregate of 1,269,509 shares of our Common Stock and pre-funded warrants to purchase an aggregate of 67,706 shares of Common Stock for gross proceeds of $1.15 million. We plan to continue to sell assets, or to issue equity or debt securities to increase our cash liquidity and fund our evolving strategic plan.

Current wording

On February 11, 2026, we completed an equity transaction with certain investors, pursuant to which we sold an aggregate of 1,269,509 shares of our Common Stock and pre-funded warrants to purchase an aggregate of 67,706 shares of Common Stock for gross proceeds of $1.15 million.

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 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.

Previous wording

There have been no material changes to these estimates, or the policies related to them, during the three months ended March 31, 2026. 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 2025 Annual Report on Form 10-K.

Current wording

There have been no material changes to these estimates, or the policies related to them, during the six months ended June 30, 2026. 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 2025 Annual Report on Form 10-K.