AquaBounty Technologies Announces Results for the Quarter and Year Ended December 31, 2020
Maynard, Mass. -- AquaBounty Technologies, Inc. (Nasdaq: AQB) (“AquaBounty” or the “Company”), a land-based aquaculture company utilizing technology to enhance productivity and sustainability, today announced the Company’s financial results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter 2020 and Subsequent Key Highlights
- Selected Innovasea, a global leader in advanced aquatic solutions for aquaculture, as the Recirculating Aquaculture Systems (“RAS”) technology solutions provider for its planned 10,000 metric ton farm (“Farm 3”).
- Fortified balance sheet with $192.3 million in gross proceeds from the closing of underwritten public offerings of common stock in December 2020 and February 2021, providing the financing to fund the expected cost of Farm 3.
- Appointed packaged food industry veteran Dr. Ricardo Alvarez to the Company’s Board of Directors, bringing with him 25 years of operational and board experience to advise on AquaBounty’s commercialization initiatives.
“The fourth quarter of 2020 was focused on operational execution, as we prepare for the harvest of our AquAdvantage salmon as market conditions permit. We also took steps to strengthen our balance sheet ahead of the construction of our planned 10,000 metric ton farm,” said Sylvia Wulf, Chief Executive Officer of AquaBounty. “Our recent public offerings provide the financing to fund the expected cost of Farm 3, which is critical to secure in advance of breaking ground on construction. We are continuing to evaluate debt financing options in support for Farm 3 as well, which could further extend our operational runway as we move forward with construction and commercialization.
“The impact of the COVID-19 pandemic on market demand required the Company to address the inventory levels of the conventional salmon at our Indiana farm, which began to exceed capacity in December. We needed to make room at the farm for our growing biomass of AquAdvantage salmon. As a result, we decided to harvest and begin donating our conventional salmon to local food charities. This provides us with both the chance to give back to our local community and the opportunity to refine our harvesting, processing and transportation processes on a continuous weekly cycle in preparation for the first commercial harvests of AquAdvantage salmon.
“Our 2021 outlook on the industry remains optimistic, as we expect to see increasing overall demand among consumers, and a resurgent food service industry as restaurants begin to reopen this year. We expect our 2021 sales of AquAdvantage salmon to begin modestly and grow stronger as we enter the second half of the year. In anticipation, we have already begun to send out initial AquAdvantage product samples for customer feedback. We will closely monitor the results of our survey on pricing, freshness, quality and sustainable, antibiotic-free domestic production as we ramp our short-term sales initiatives.
“During the fourth quarter, we were delighted to partner with Innovasea as our RAS technology provider for Farm 3. Innovasea is a U.S.-based company familiar with U.S. markets and regulations and they have been designing and building energy efficient, sustainable recirculating aquaculture systems for more than 25 years. We are rapidly moving forward with them on the development, design and engineering for our first 10,000 metric ton farm.
“We have also continued our rigorous site selection process for Farm 3 and expect to make a final decision in the coming weeks once we have concluded our due diligence. We then expect to move forward with the purchase of the property and the commencement of the permitting process.
“2020 was a decisive year for AquaBounty, and we believe we have positioned the Company for an even more pivotal 2021. With our fortified balance sheet, the impending first-ever commercial harvest of AquAdvantage salmon and the planned construction of our next farm, we look forward to sharing our upcoming milestone achievements with our valued shareholders,” concluded Wulf.
Fourth Quarter 2020 Financial Summary
- Revenue in the fourth quarter of 2020 was $50,197, as compared to $46,367 in revenue in the same year-ago quarter. Revenue was impacted by the continued effects of the COVID-19 pandemic on demand in the food service industry, which has prompted AquaBounty to temporarily place a hold on commercial harvests of AquAdvantage salmon until the expected conclusion of the conventional salmon donation program in April.
- Operating expenses in the fourth quarter of 2020 were $6.1 million, as compared to $3.5 million in the same year-ago quarter. The increase in operating expenses was primarily due to an increase in production costs as the biomass of fish in our farms grew from 161 metric tons to over 603 metric tons. In addition, the Company recorded an inventory reserve of $1.5 million related to the donation program for the conventional salmon.
- Net loss in the fourth quarter of 2020 was $6.1 million, as compared to $3.4 million in the same year-ago quarter.
- Cash, cash equivalents and restricted cash totaled $96.2 million as of December 31, 2020, compared with $2.8 million at December 31, 2019. In December, the Company fortified its balance sheet with $65.2 million in gross proceeds from a public offering of common stock.
AquaBounty Technologies, Inc. (NASDAQ: AQB) is a leader in the field of land-based aquaculture and the use of technology for improving its productivity and sustainability. The Company’s objective is to ensure the availability of high-quality seafood to meet global consumer demand, while addressing critical production constraints in the most popular farmed species.
The Company’s AquAdvantage fish program is based upon a single, specific molecular modification in fish that results in more rapid growth in early development. With aquaculture facilities located in Prince Edward Island, Canada, and Indiana, USA, AquaBounty is raising its disease-free, antibiotic-free salmon in land-based recirculating aquaculture systems, offering a reduced carbon footprint and no risk of pollution of marine ecosystems as compared to traditional sea-cage farming.