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 September 30, 2026, we have incurred cumulative net losses of approximately $393 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 September 30, 2026, we had $122 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 expansion of our strategic review to include power infrastructure and energy development opportunities may not result in any transaction, and any such transaction or business would expose us to significant execution, regulatory, and financing risks.

We have historically operated as an aquaculture company and have no operating history in the power generation, energy development, or digital infrastructure sectors. In July 2026, we expanded our strategic review of the Pioneer, Ohio property to evaluate opportunities that may include a sale, lease, joint development arrangement, or other transactions involving power infrastructure, energy development, or related uses. There can be no assurance that this process will result in any transaction, or that any transaction, if pursued, will be completed on favorable terms or at all. The process may require significant management attention and could divert resources from other efforts to preserve and maximize stockholder value.

Any redevelopment or repurposing of the Pioneer site would be subject to significant risks, including market conditions, financing availability, and the ability to obtain required governmental approvals, permits, interconnection rights, and other regulatory authorizations. We also currently lack the capital necessary to pursue large-scale infrastructure or energy projects and may be unable to raise additional funds on acceptable terms, if at all. If the strategic review does not result in a completed transaction, or if any transaction or new business initiative is delayed, more costly than expected, or fails to generate anticipated value, our business, financial condition, results of operations, prospects, and stock price could be materially adversely affected.

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.

Even though our common stock is traded on Nasdaq, we cannot assure you that we will be able to comply with standards necessary to maintain such listing, which may result in our common stock being delisted from Nasdaq. If our common stock were no longer listed on Nasdaq, investors would experience impaired liquidity for our common stock, not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage. For example, investors might only be able to trade on one of the over-the-counter markets. In addition, we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; a limited amount of news and analyst coverage for us; and a decreased ability to issue additional securities or obtain additional financing in the future.

Nasdaq has adopted Listing Rules 5450(a)(3) and 5550(a)(6), which would require issuers to maintain a minimum Market Value of Listed Securities ("MVLS") of at least $5 million (the "MVLS Requirement"). On July 22, 2026, the staff of the Securities and Exchange Commission's Division of Trading and Markets, acting pursuant to delegated authority, approved the Nasdaq rule change. Under the rule as approved, an issuer whose MVLS remains below $5 million for 30 consecutive business days would be subject to immediate suspension and delisting without a cure or compliance period, and a request for review by a Nasdaq Hearings Panel would not stay the suspension of trading.

However, on July 29, 2026, the Securities and Exchange Commission received notices of intention to petition for review of the delegated action and, pursuant to Rule 431(e) of the Commission's Rules of Practice, the July 22, 2026 approval order was automatically stayed pending review by the full Commission. As a result, the MVLS Requirement and the related immediate suspension and delisting provisions are not currently in effect and will remain stayed unless and until the Commission orders otherwise. The Commission may ultimately affirm, modify or set aside the delegated action, and there can be no assurance as to the outcome or timing of the Commission's review or whether the MVLS Requirement will take effect in its current form, a modified form or at all.

As of November 4, 2026, the market value of our listed securities was greater than $5 million. If the MVLS Requirement becomes effective and we are unable to maintain compliance with that requirement or other applicable Nasdaq continued listing standards, we could become subject to suspension of trading and delisting from Nasdaq.

We have also experienced periods of negative stockholders’ equity, as reflected in our financial statements included in this Quarterly Report on Form 10-Q. Nasdaq's continued listing standards for the Nasdaq Capital Market require, among other things, stockholders' equity of at least $2.5 million, unless an alternative market value or net income standard is met. As of September 30, 2026, our stockholders' equity was approximately $1.0 million, which is below this requirement. Continued net losses, any repayment of or liability recorded for the JobsOhio grant, or further impairment of the Ohio Farm Project could further reduce our stockholders' equity, and any failure to maintain positive stockholders’ equity could further increase the risk that our common stock fails to meet Nasdaq’s continued listing standards, which could result in our suspension and delisting from Nasdaq.

On January 15, 2025, we received a letter (the “2025 Notice”) from Nasdaq notifying us that, because the closing bid price for our common stock had been below $1.00 per share for the previous 30 consecutive business days, it no longer complied with the minimum bid price requirement for continued listing on Nasdaq. The 2025 Notice had no immediate effect on our listing or on the trading of our common stock. The 2025 Notice provided us with a compliance period of 180 calendar days, or until July 15, 2025, to regain compliance. We were subsequently granted an additional 180 calendar days, or until January 12, 2026, to regain compliance. On September 15, 2025 we received a notice from Nasdaq confirming that we had regained compliance with the minimum bid price requirement for continued listing on Nasdaq.

There can be no assurance that we will be able to maintain compliance with the Nasdaq minimum bid price requirement, the MVLS Requirement, or any other applicable Nasdaq continued listing standards. Any failure to comply with Nasdaq listing rules could lead to the delisting of our common stock from Nasdaq and our common stock trading, if at all, only on the over-the-counter markets, which would likely have less liquidity and more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of our common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock would likely be significantly adversely affected.

JobsOhio has demanded that we repay a $1.0 million economic development grant.

In August 2021, AquaBounty Farms Ohio LLC, a subsidiary of the Company, entered into a grant agreement with JobsOhio (the “Grant Agreement”) and received a $1,000,000 economic development grant in connection with the Ohio Farm Project. Under the Grant Agreement, we committed to create 112 jobs with associated payroll of approximately $5.4 million and to make approximately $222.1 million in fixed asset investments by December 31, 2026, and to maintain those commitments through December 31, 2028.

Construction of the Ohio Farm Project was paused in June 2023, we have been selling equipment assets and we have reduced our headcount to three employees. On September 21, 2026, JobsOhio notified us that our sale of equipment and consideration of acquisition offers for the Ohio Farm Project property constitute a breach of the Grant Agreement and demanded repayment of the full $1,000,000 of grant funds. We responded to JobsOhio on October 6, 2026 and provided additional information. On October 23, 2026, JobsOhio informed us that it had decided to uphold its demand for repayment of the full $1,000,000 and requested payment by November 22, 2026. JobsOhio indicated that, absent payment, it may refer the matter for collection and pursue the remedies available under the Grant Agreement.

We are evaluating our response, which may include discussing repayment options with JobsOhio, although there can be no assurance that JobsOhio will agree to any payment schedule or other accommodation. Repayment of the grant would reduce our available cash resources and could adversely affect our liquidity, financial condition and ability to fund our operations and pursue our strategic review of the Ohio Farm Project. In addition, any collection or legal action by JobsOhio could result in additional costs and management distraction.

Changes in the political and regulatory environment could adversely affect the potential development or value of the Ohio Farm Site.

As part of our expanded strategic review, we may seek to sell, lease, jointly develop or otherwise utilize the Ohio Farm Site in Pioneer, Ohio for data center or related power infrastructure development. Data center development has been subject to increasing federal, state and local scrutiny, including with respect to zoning and land use, permitting, access to electrical power, water use, infrastructure requirements and related costs, and government authorities have considered or implemented moratoria and other restrictions on new data center development. Changes in the composition or policy priorities of federal, state or local governments following the 2026 midterm elections could result in new or more restrictive laws, regulations or policies affecting data center development, which could delay, limit or prevent development of our property, increase development costs, reduce demand from potential purchasers, tenants or development partners, or otherwise adversely affect the value of our property and our ability to realize the anticipated benefits of any potential data center development.