By: Jacob Kessler
THE VILLAGE REPORTER
jacob@thevillagereporter.com
AquaBounty Technologies, listed as AQB on the NASDAQ, announced the company’s financial results for the third quarter and nine months, which ended on September 30th, 2023. These results were released on November 7th and also included updates for projects around the world.
Items listed as “highlights” include a net loss in the third quarter of 2023 in the amount of $6.1 million, compared to $5.4 million in the third quarter of 2022. $733,000 in product revenue was generated in the third quarter, which resulted in a year-over-year increase of 12% as compared to $653,000 in the third quarter of 2022.
Cash and cash equivalents and restricted cash totaled $17.8 million as of September 30th, 2023, compared to $102.6 million as of December 31st, 2022.
“Our third quarter results were impacted by a decline in market prices for Atlantic salmon that began during the second quarter, even though our Indiana farm exceeded its planned output,” said Sylvia Wulf, Board Chair and Chief Executive Officer of AquaBounty. “However, we continue to be encouraged by the demand for our fish.”
AquaBounty also announced a Memorandum of Understanding with Noble Salmon to develop a salmon farm in the Republic of Georgia. This is the first example of AquaBounty entering additional salmon markets through local partnerships.
Noble Salmon was formed by the Benish Group, a company founded in 1981 that operates in fourteen countries including Switzerland, the Netherlands, Israel, Azerbaijan, Ukraine, Malta, Georgia, Kazakhstan, Moldova, Brazil, Argentina, and Uruguay.
The company’s CEO, Meni Benish, is also the co-founder of Archi, a real estate development firm in Georgia, and is the chair of the Israel-Georgia Chamber of Commerce.
AquaBounty CEO Sylvia Wulf included remarks regarding the partnership in the company’s Quarter Three 2023 results. “The combination of capabilities of the two companies benefits the construction and operation of a planned state-of-the-art RAS farm focused on producing Atlantic salmon for sale in nearby markets.”
“This project will be the first instance of AquaBounty executing its strategy to enter additional salmon markets through local partnerships in a capital-lite structure. As always, I look forward to providing my fellow shareholders with an update in the near future,” concluded Wulf.
AquaBounty had planned to enter a market outside the U.S. for years, telling Seafood Source in 2019 that it was pursuing opportunities in China before ultimately pulling back on those plans earlier this year.
AquaBounty also included an update regarding the farm construction in Pioneer. “We announced in August that the Company was evaluating both the cost estimate and our options for moving forward with the completion of construction of our Ohio farm.”
“We selected Gilbane Building Company (“Gilbane”) as our new construction firm for the project and they have been working for the past several months with the subcontractors on the project to estimate the remaining cost to finish construction of the facility. “
“That work has been completed and the new estimate for the total project cost is now in the range of $485 – $495 million, of which approximately $140 million has been spent to date.”
“We recognize this is substantially higher than previous ranges, but the updated estimates incorporate the highly inflationary environment for labor and materials, particularly concrete and piping, that have impacted construction projects over the last three years. Consistent with our commitment to environmental stewardship, the estimate includes a water/wastewater treatment facility to return water used in the farm to the local environment in an “as clean” condition as when it was withdrawn, and in a manner that meets or exceeds applicable local and federal EPA standards, before it returns to the river.”
“We are negotiating elements of the estimated costs with Gilbane, and once complete, will finalize the Guaranteed Maximum Price that would provide a contractual cap on the total expenditure to complete the farm.”
“We are continuing our collaboration with Wells Fargo Corporate and Investment Banking on our plans to place a mix of taxable and tax-exempt bonds through the Toledo-Lucas County Port Authority in an amount up to $425 million, and we are exploring a wide range of alternatives with Oppenheimer & Co. to complete the additional capital requirements to allow construction to resume on the Ohio farm.”
“Though there are significant steps and risks remaining to complete this process, we are excited to be working with our team of collaborators,” said Sylvia Wulf, Board Chair and Chief Executive Officer of AquaBounty.
In its third quarter 2023 results, AquaBounty stated it had generated $733,133 in revenue, up from $653,432 in 2022. This is however down from quarter two at around $788,000. The Nine Months Ending Period for revenue, that ended on September 30th is listed at $1,919,409 for 2023 and $2,686,019 for the same period of 2022.
Net losses in quarter three of 2023 were listed as $6.1 million, with quarter three of 2022 being set at $5.4 million. Quarter three of 2023 was however a slight improvement over quarter two, which saw a net loss of $6.5 million. The Nine Months Ended Net Loss Amounts for 2023 are listed as $19,132,927 with 2022 numbers for the same time period showing a net loss of $16,087,895.
These numbers have been released following a reverse stock split AquaBounty executed in order to meet the NASDAQ Capital Markets requirement that states a stock price needs to be above $1.00 to remain listed.
The reverse stock split consolidated the number of shares the company has with a 1-for-20 split. This converted 20 previous shares into one new share of the stock. This brought the total number of shares from around 71.36 million to around 3.57 million.
While all of this is taking place, a court case continues on schedule for Village of Pioneer vs. Williams County Board of Commissioners and AquaBounty Farms Ohio LLC vs. Williams County Board of Commissioners, with both cases being consolidated.
The reason for the case stems from AquaBounty’s desire to build two utility lines, with one being for raw water and the other for treated water. The location where these lines would be built resides on County Right-Of-Way land in Pioneer.
Commissioners have denied AquaBounty’s request to use the land under Right-Of-Way three times now, with their reasoning being that outside counsel believes the lines do not constitute a public utility.
As previously reported by The Village Reporter, statements made during a Special Administrative Meeting for the county commissioners show that the only perceived benefit would be a few fire hydrants, and the capability to offer other corporations the same opportunity to purchase water from private landowners along County Road S that are on the water field.
The Village of Pioneer fought back against the statements made regarding the lines not being a public utility, stating the village passed Ordinance 06-2023 establishing the waterline as a public utility. These items and more will be discussed during the case that follows, with oral arguments being scheduled for Thursday, January 11th, 2024.
