By: Jacob Kessler
THE VILLAGE REPORTER
jacob@thevillagereporter.com
AquaBounty has released its financial report highlighting the final quarter of 2023 as well as its report for the entire year.
According to the report, the fourth quarter generated $553 thousand in product revenue, which is a year-over-year increase of 23%. This is compared to $451 thousand in 2022.
For the year as a whole, the company saw revenue totaling $2.47 million, a year-over-year decrease of 21% as compared to $3.14 million in 2022.
Net losses for the fourth quarter ended at $8.42 million for 2023 as compared to $6.07 million in the fourth quarter of 2022. The year as a whole didn’t fare much better with a net loss of $27.56 million as compared to the $22.16 million the year prior.
To recap, the AquaBounty project officially broke ground on April 20th, 2022, and has been the largest investment made in the county for some time.
The facility is expected to span 479,000 square feet and raise 10,000 metric tons of Atlantic Salmon. Recirculating Aquaculture System technology will be used to raise the salmon located in the freshwater tanks. Over 250 potential sites were surveyed with Pioneer winning out over the others.
The location was expected to create 400 temporary jobs during construction efforts, with 120-140 permanent jobs being available upon its completion.
When the project was first announced it was stated $750,000 to $1 million a year would be provided to the North Central School District every year.
Other benefits were also quoted such as income taxes, payroll taxes, real estate, and electric taxes. Upon completion, the project is expected to create payroll to the tune of $5,445,912, as previously stated by WEDCO’s Megan Hausch.
As previously reported by The Village Reporter, construction efforts for the new Pioneer farm site were suspended in June of 2023 due to a “significant increase in the expected construction cost.”
AquaBounty has stated that efforts are underway to obtain new sources of funding to cover the increase in cost.
Cash, cash equivalents, marketable securities, and restricted cash totaled $9.2 million at the end of 2023. In contrast, 2022 saw the company with $102.6 million at the end of the year.
Also included in the financial release was news previously given out in February of this year, regarding AquaBounty’s Indiana Farm.
The decision was made by the company to sell this farm in order to add to their liquidity. AquaBounty has also signed a memorandum of understanding (MOU) with Noble Salmon to develop a salmon farm in the country of Georgia back in November of 2023.
Additionally, AquaBounty has since obtained $10 million in funding through a short-term loan. This money will be used to raise cash for working capital and to buy up existing debt.
To obtain this money, AquaBounty has used its farm located in Indiana, and the unfinished farm located in Pioneer as collateral.
According to documents filed with the United States Securities and Exchange Commission, AquaBounty is borrowing the money at an interest rate of 15% from Los Angeles based JMB Capital Partners Lending, LLC.
The loan will be conducted in two tranches with the first totaling $5 million and the second being up to $5 million. The loan will mature on July 31st, 2024, or earlier. This will be dependent on the sale of collateral or in the event of a default.
Also included in the filing were details regarding the mortgage of the Pioneer Farm. The documents read: “As the owner of a farm in Pioneer, Ohio (the “Pioneer Farm”), ABFO shall grant an Open-Ended Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Ohio Mortgage”) in favor of the Lender in regard to the Pioneer Farm to secure the Borrowers’ obligations under the Loan Agreement.”
Continuing, “The Loan Agreement grants a first security interest in all present and after-acquired assets of the Borrowers, subject to certain exclusions set forth in the Loan Agreement, the Indiana Mortgage grants a first security interest in the buildings and land comprising of the Albany Farm, and the Ohio Mortgage grants a first security interest in the buildings and land comprising of the Pioneer Farm.”
The Village Reporter reached out to AquaBounty regarding the Pioneer farm. A message was received stating the company is not taking part in any interviews.
A statement was however included from Board Chair and CEO Sylvia Wulf stating, “As previously announced, AquaBounty has been exploring a wide range of financing alternatives to strengthen its balance sheet and increase its cash position.”
“The cash from the Loan agreement that was announced today, will be used to cover our immediate working capital requirements.”
“With this financing in place, work will continue with Berenson and Company on the sale of the Indiana farm, in addition to, securing the additional financing that will allow us to resume construction of the farm in Ohio and for our long-term needs to pursue our growth strategy.”
Additionally, CEO Sylvia Wulf released the following statement as part of the companies 2023 financial report. “Our financial results for 2023 are indicative of the financial and operational challenges that we encountered during the year.”
“We began the year with a limited ability to harvest at our Indiana farm, as needed repairs were performed on our processing building.”
“By the time the facility was fully back in operation in early May, the market price for Atlantic salmon had begun to fall.”
“This continued through the second and third quarters and only partially recovered during the holiday season in the fourth quarter. The result was a decline in year-over-year revenue, even though our total production output increased by 14 percent.”
“Our net loss for 2023 increased over the prior year, primarily due to sharp increases in spending for state excise taxes, legal fees, and outside consulting, the latter two driven by our fundraising efforts.”
“We also were impacted by another significant increase in the cost estimate for our Ohio farm, which forced us to pause both our construction activities and our municipal bond financing transaction in June.”
“Faced with these challenges, we began exploring a range of financing alternatives to strengthen our balance sheet and increase our cash runway.”
“We announced in February 2024 that we had made the decision to sell our Indiana farm operation in order to increase our cash position and to decrease our ongoing cash burn.”
“Additionally, we engaged Berenson & Company as our investment bank to advise on debt financing secured by our unencumbered assets and on additional funding alternatives that are necessary to resume and complete construction of our Ohio farm and pursue our longer-term growth strategy.
“Operations at our PEI farm continue to expand with the installation of additional egg incubation capacity, which will allow us to increase the availability of non-transgenic Atlantic salmon eggs and fry for sale to salmon farmers.”
“Furthermore, our R&D team continues to make advances in genetics, breeding, fish health and nutrition.’
“We have a fully engaged and committed management team that is focused on dealing with our challenges and taking the necessary steps to support our future growth. I look forward to providing my fellow stockholders with an update in the near future.”
No timeline has been given as to when construction efforts may once again begin at the Pioneer location.