[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Presents the company's unaudited interim financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for the period ended June 30, 2025, reflecting discontinued operations - AquaBounty Technologies, Inc is classified as a 'smaller reporting company' and a 'non-accelerated filer'[5](index=5&type=chunk) - As of August 4, 2025, the registrant had **3,877,695 shares** of common stock outstanding[6](index=6&type=chunk) - The unaudited interim condensed consolidated financial statements are prepared in conformity with GAAP and include all necessary recurring adjustments for fair presentation[25](index=25&type=chunk) - The Indiana Farm and Canadian Farms have been designated as **discontinued operations** retrospectively for all periods presented[26](index=26&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's assets, liabilities, and stockholders' equity as of June 30, 2025, compared to December 31, 2024 Condensed Consolidated Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $729,569 | $230,362 | | Prepaid expenses and other current assets | $3,115,868 | $292,018 | | Current assets held for sale | $100,000 | $10,819,909 | | Total current assets | $3,945,437 | $11,342,289 | | Total assets | $26,650,968 | $34,061,798 | | Accounts payable and accrued liabilities | $3,317,732 | $10,104,853 | | Current debt | $8,505,992 | $1,261,039 | | Current liabilities held for sale | $211,173 | $3,830,041 | | Total current liabilities | $13,029,222 | $16,201,548 | | Total liabilities | $13,037,043 | $18,221,088 | | Total stockholders' equity | $13,613,925 | $15,840,710 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Summarizes revenues, expenses, and resulting net loss for the three and six months ended June 30, 2025 Operating Results (Three Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $0 | $79,702 | -$79,702 | -100% | | Research and development | $0 | $76,766 | -$76,766 | -100% | | General and administrative | $1,768,596 | $3,138,502 | -$1,369,906 | -44% | | Asset impairment, net | $1,525,752 | $26,264,943 | -$24,739,191 | -94% | | Operating loss | $(3,294,348) | $(29,559,913) | +$26,265,565 | -89% | | Loss from continuing operations | $(3,387,912) | $(30,529,825) | +$27,141,913 | -89% | | Income (loss) from discontinued operations | $14,875 | $(19,984,416) | +$19,999,291 | -100% | | Net loss | $(3,373,037) | $(50,514,241) | +$47,141,204 | -93% | | Basic and diluted net loss per share | $(0.87) | $(13.08) | +$12.21 | -93% | Operating Results (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $6,613 | $143,335 | -$136,722 | -96% | | Research and development | $0 | $150,616 | -$150,616 | -100% | | General and administrative | $3,329,032 | $5,527,736 | -$2,198,704 | -40% | | Asset impairment, net | $1,218,866 | $26,264,943 | -$25,046,077 | -95% | | Operating loss | $(4,554,511) | $(32,086,630) | +$27,532,119 | -86% | | Other income (expense) | $1,776,363 | $(1,153,600) | +$2,929,963 | -254% | | Loss from continuing operations | $(2,778,148) | $(33,240,230) | +$30,462,082 | -92% | | Loss from discontinued operations | $(193,754) | $(28,432,259) | +$28,238,505 | -99% | | Net loss | $(2,971,902) | $(61,672,489) | +$58,700,587 | -95% | | Basic and diluted net loss per share | $(0.77) | $(16.00) | +$15.23 | -95% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines the changes in stockholders' equity for the six months ended June 30, 2025 - Total stockholders' equity decreased from **$15,840,710** at December 31, 2024, to **$13,613,925** at June 30, 2025[17](index=17&type=chunk) - The accumulated deficit increased from **$(369,772,538)** at December 31, 2024, to **$(372,744,440)** at June 30, 2025[17](index=17&type=chunk) - Net loss for the six months ended June 30, 2025, was **$(2,971,902)**[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details the sources and uses of cash from operating, investing, and financing activities for H1 2025 Cash Flow Summary (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(3,910,047) | $(8,741,616) | +$4,831,569 | -55% | | Net cash provided by (used in) investing activities | $4,632,679 | $(1,850,802) | +$6,483,481 | -350% | | Net cash (used in) provided by financing activities | $(232,194) | $2,121,825 | -$2,354,019 | -111% | | Net change in cash and cash equivalents | $499,207 | $(8,475,530) | +$8,974,737 | -106% | | Cash and cash equivalents at end of period | $729,569 | $728,339 | +$1,230 | +0.17% | - Net cash used in operating activities decreased by **55%** due to reductions in personnel, farm operating costs, depreciation charges, and share-based compensation[94](index=94&type=chunk) - Investing activities shifted from a net use of cash to a net provision of cash, primarily due to **proceeds from asset sales**[95](index=95&type=chunk) [Notes to the condensed consolidated financial statements](index=8&type=section&id=Notes%20to%20the%20condensed%20consolidated%20financial%20statements) Provides detailed explanations of the accounting policies and financial statement line items [Note 1. Nature of Business and Organization](index=8&type=section&id=1.%20Nature%20of%20Business%20and%20Organization) Details the company's strategic shift from farm construction to asset sales after pausing the Ohio Farm Project - The company paused construction of its 10,000 metric ton Ohio Farm Project in June 2023 due to substantial cost increases and impaired ability to pursue municipal bond financing[21](index=21&type=chunk) - Strategic asset sales include the Indiana Farm (July 2024), selected Ohio Equipment Assets (2024-H1 2025), and the Canadian subsidiary (March 2025), including broodstock farms and intellectual property[21](index=21&type=chunk) - The primary remaining asset is the investment in the Ohio Farm Project, consisting of remaining Ohio Equipment Assets and the Ohio Farm Site (land and construction in process)[21](index=21&type=chunk) [Note 2. Going Concern Uncertainty](index=8&type=section&id=2.%20Going%20Concern%20Uncertainty) Highlights substantial doubt about the company's ability to continue operations due to cumulative losses and low cash reserves - The company has incurred cumulative net losses of **$373 million** since inception and expects future net losses[22](index=22&type=chunk) - As of June 30, 2025, cash and cash equivalents totaled **$730 thousand**[22](index=22&type=chunk) - **Substantial doubt** exists about the company's ability to continue as a going concern within one year, dependent on raising additional capital or selling assets[23](index=23&type=chunk) [Note 3. Basis of Presentation](index=8&type=section&id=3.%20Basis%20of%20Presentation) Describes the preparation of the unaudited interim financial statements in conformity with GAAP and the reclassification of discontinued operations - The unaudited interim condensed consolidated financial statements are prepared in conformity with GAAP and reflect all normal recurring adjustments[25](index=25&type=chunk) - The Indiana Farm and Canadian Farms have been designated as **discontinued operations** retrospectively for all periods presented[26](index=26&type=chunk) - All potential dilutive securities (stock options, unvested stock awards) are considered **anti-dilutive** and excluded from the calculation of diluted net loss per share for all periods presented[27](index=27&type=chunk) [Note 4. Risks and Uncertainties](index=9&type=section&id=4.%20Risks%20and%20Uncertainties) Outlines key operational risks, including securing additional cash and realizing asset values, and credit risk mitigation strategies - Key risks include the timing of securing additional cash, the realization of asset values, and stockholder approval of management plans[31](index=31&type=chunk) - Credit risk from cash and cash equivalents is mitigated by maintaining balances with highly rated financial institutions and investing in cash equivalents with maturities of less than 90 days[32](index=32&type=chunk) [Note 5. Discontinued Operations and Assets Held for Sale](index=10&type=section&id=5.%20Discontinued%20Operations%20and%20Assets%20Held%20for%20Sale) Details the sale of the Indiana and Canadian farms and the valuation of remaining assets held for sale - The Indiana Farm was sold in July 2024 for **$9.5 million** (net of $305k transaction expenses)[33](index=33&type=chunk) - The Canadian Farms were sold in March 2025 for **$5.2 million**, including the assumption of $3.2 million in outstanding loans (net of $216k transaction expenses)[33](index=33&type=chunk) - During the six months ended June 30, 2025, the company sold Ohio Equipment Assets for gross proceeds of **$5.0 million** and recorded a non-cash impairment charge of **$1.2 million**, valuing remaining assets at $100 thousand[34](index=34&type=chunk) Income (Loss) from Discontinued Operations (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Revenue | $0 | $657,450 | | Operating income (loss) | $(176,486) | $(28,381,595) | | Income (loss) from discontinued operations | $(193,754) | $(28,432,259) | [Note 6. Prepaid and Other Current Assets](index=11&type=section&id=6.%20Prepaid%20and%20Other%20Current%20Assets) Shows a significant increase in prepaid and other current assets due to the recognition of new receivables Prepaid and Other Current Assets (June 30, 2025 vs. December 31, 2024) | Classification | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Receivables | $2,473,205 | $0 | | Prepaid insurance | $580,094 | $203,999 | | Prepaid other | $62,569 | $88,019 | | Total | $3,115,868 | $292,018 | [Note 7. Property, Plant and Equipment](index=11&type=section&id=7.%20Property,%20Plant%20and%20Equipment) Reports stable net property, plant, and equipment values, primarily consisting of the Ohio Farm Site land and construction - Depreciation expense was **$0** for the six months ended June 30, 2025, compared to **$715 thousand** for the same period in 2024[39](index=39&type=chunk) - The company recorded non-cash impairment charges of **$101.9 million** against continuing operations during 2024 related to Ohio Farm Project property, plant and equipment[40](index=40&type=chunk) Property, Plant and Equipment, Net (June 30, 2025 vs. December 31, 2024) | Classification | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land | $641,345 | $641,345 | | Construction in process | $22,026,655 | $22,026,655 | | Total property and equipment | $22,668,000 | $22,668,000 | | Less accumulated depreciation and amortization | $0 | $0 | | Property, plant and equipment, net | $22,668,000 | $22,668,000 | [Note 8. Debt](index=11&type=section&id=8.%20Debt) Details the increase in total debt due to the conversion of accounts payable into a secured Vendor Note - The Atlantic Canada Opportunities Agency (ACOA) terminated and forgave an outstanding loan of C$2.9 million (**$2.0 million**) in February 2025[42](index=42&type=chunk) - On June 11, 2025, the company converted **$7.4 million** of outstanding accounts payable into a secured Vendor Note with an 8% interest rate and a 12-month term (first six months interest-free)[45](index=45&type=chunk) - The Term Note was in default at June 30, 2025, but was subsequently amended on July 22, 2025, to alter the timing of remaining payments, bringing the company into compliance[43](index=43&type=chunk)[44](index=44&type=chunk)[65](index=65&type=chunk) Total Debt (June 30, 2025 vs. December 31, 2024) | Debt Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ACOA AIF Grant | $0 | $1,996,558 | | Term Note | $1,119,757 | $1,261,039 | | Vendor Note | $7,386,235 | $0 | | Total debt | $8,505,992 | $3,257,597 | [Note 9. Leases](index=12&type=section&id=9.%20Leases) Shows a decrease in operating lease assets and liabilities, with a weighted average remaining lease term of 1.3 years - Operating lease expense for the six months ended June 30, 2025, was **$15,740**, down from $23,876 for the same period in 2024[48](index=48&type=chunk) Operating Lease Liabilities (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets, net | $37,531 | $51,509 | | Total operating lease liabilities | $37,531 | $51,509 | | Weighted average remaining lease term | 1.3 years | 1.8 years | | Weighted average discount rate | 8% | 8% | [Note 10. Stockholders' Equity](index=12&type=section&id=10.%20Stockholders'%20Equity) Reports the status of stock awards and options, noting all unvested stock awards were vested or forfeited by June 30, 2025 - Unvested stock awards decreased from 12,567 shares at December 31, 2024, to **0 shares** at June 30, 2025, due to vesting and forfeiture[50](index=50&type=chunk) - Stock options outstanding decreased to **46,495** at June 30, 2025, from 64,905 at December 31, 2024, with a weighted average exercise price of $40.41[51](index=51&type=chunk) - Total share-based compensation expensed for the six months ended June 30, 2025, was **$57 thousand** ($33k for stock awards and $24k for stock options)[50](index=50&type=chunk)[52](index=52&type=chunk) [Note 11. Commitments and Contingencies](index=13&type=section&id=11.%20Commitments%20and%20Contingencies) States that management believes current legal proceedings will not materially and adversely affect the company's financial position - The company accrues contingent liabilities when it is probable that future expenditures will be made and can be reasonably estimated[53](index=53&type=chunk) - Management believes that the final disposition of existing legal matters will not have a material adverse effect on the company's financial position or results of operations[54](index=54&type=chunk) [Note 12. Segment Reporting](index=14&type=section&id=12.%20Segment%20Reporting) Confirms the company operates as a single segment and uses 'net cash expenditures' as its key non-GAAP performance measure - The company has a **single operating and reportable segment**[56](index=56&type=chunk) - Management uses **'net cash expenditures'** (a non-GAAP measure) as the key performance measure, focusing on overall cash expenditures and liquidity[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) Net Cash Expenditures (Six Months Ended June 30, 2025 vs. 2024) | Segment | June 30, 2025 ($ thousands) | June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | Corporate | $2,571 | $4,959 | | Indiana farm | $83 | $3,091 | | Ohio farm | $585 | $2,002 | | Canadian operations | $272 | $2,356 | | Net cash expenditures | $3,511 | $12,408 | [Note 13. Income Taxes](index=14&type=section&id=13.%20Income%20Taxes) Explains that no income taxes were recorded due to forecasted losses and a full valuation allowance on deferred tax assets - The company reported a net loss for the six months ended June 30, 2025, and forecasts losses for the remainder of the year, resulting in **no federal or state income taxes recorded**[61](index=61&type=chunk) - A **full valuation allowance** has been applied to deferred tax assets due to the company's history of losses and the uncertainty of generating sufficient future taxable income[62](index=62&type=chunk) [Note 14. Subsequent Events](index=14&type=section&id=14.%20Subsequent%20Events) Discloses a post-period amendment to a secured Term Note that brought the company back into compliance after a default - On July 22, 2025, the company executed an amendment to its secured Term Note, establishing a new payment schedule and bringing the company into compliance after a prior default[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial results, liquidity, and capital resources, focusing on the strategic shift to asset sales and cost reduction - The company has shifted its growth strategy from large-scale recirculating aquaculture system (RAS) farms to prioritizing core assets and pursuing funding and strategic alternatives[67](index=67&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$373 million** and **$730 thousand** in cash and cash equivalents[69](index=69&type=chunk) - The company's ability to continue as a going concern is dependent on raising additional capital, which creates **substantial doubt** about its future operations[69](index=69&type=chunk)[97](index=97&type=chunk) [Overview](index=16&type=section&id=Overview) - Construction of the Ohio Farm Project was paused in June 2023 due to increasing costs and inability to secure municipal bond financing[67](index=67&type=chunk) - The company sold its Indiana Farm (July 2024), Canadian subsidiary (March 2025), and selected Ohio Equipment Assets (2024-H1 2025)[67](index=67&type=chunk) - The Ohio Farm Project (remaining Ohio Equipment Assets, land, and construction in process) is the primary remaining asset, with strategic options being explored[67](index=67&type=chunk) [Discontinued Operations](index=16&type=section&id=Discontinued%20Operations) - The Indiana Farm (sold July 2024) and Canadian Farms (sold March 2025) have been designated as discontinued operations[68](index=68&type=chunk) [Financial Overview](index=16&type=section&id=Financial%20Overview) - The company has significantly reduced headcount and ongoing operating costs following the winding down of fish rearing operations[69](index=69&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$373 million** and **$730 thousand** in cash and cash equivalents[69](index=69&type=chunk) - New funding is required for working capital, and the ability to continue as a going concern is dependent on raising additional capital[69](index=69&type=chunk) [Sales and Marketing Expenses](index=16&type=section&id=Sales%20and%20Marketing%20Expenses) - Sales and marketing expenses were **$0** for the three months ended June 30, 2025, due to the sale of the Indiana Farm and Canadian Farms[70](index=70&type=chunk)[78](index=78&type=chunk) - Sales and marketing expenses for the six months ended June 30, 2025, decreased by **96%** compared to the prior year, due to reductions in personnel costs and program spending[85](index=85&type=chunk) [Research and Development Expenses](index=16&type=section&id=Research%20and%20Development%20Expenses) - There were **no research and development expenses** for the three or six months ended June 30, 2025, following the sale of the Canadian Farms[71](index=71&type=chunk)[79](index=79&type=chunk)[86](index=86&type=chunk) [General and Administrative Expenses](index=16&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative expenses decreased by **44%** for the three months ended June 30, 2025, and by **40%** for the six months ended June 30, 2025, compared to the prior year[77](index=77&type=chunk)[84](index=84&type=chunk) - The decrease is attributed to reductions in personnel costs, legal fees, share-based compensation, professional fees, audit fees, and travel[80](index=80&type=chunk)[87](index=87&type=chunk) - The company expects further decreases in general and administrative expenses due to reduced operations[72](index=72&type=chunk) [Asset Impairment, Net](index=16&type=section&id=Asset%20Impairment,%20Net) - A non-cash impairment charge of **$1.2 million** was recorded during the three and six months ended June 30, 2025, related to the remaining Ohio Equipment Assets[81](index=81&type=chunk)[88](index=88&type=chunk) - Ohio Equipment Assets were sold for net proceeds of **$2.4 million** during Q2 2025 and **$4.7 million** during H1 2025[81](index=81&type=chunk)[88](index=88&type=chunk) - The value of the remaining Ohio Equipment Assets was concluded to be **$100 thousand** as of June 30, 2025[81](index=81&type=chunk)[88](index=88&type=chunk) [Other Income (Expense), Net](index=16&type=section&id=Other%20Income%20(Expense),%20Net) - Other income for the six months ended June 30, 2025, was **$1.78 million**, primarily due to the forgiveness of an outstanding loan ($2.0 million) and interest income[16](index=16&type=chunk)[75](index=75&type=chunk)[89](index=89&type=chunk) - Other expense for the three months ended June 30, 2025, was **$(94) thousand**, a 90% decrease from $(970) thousand in the prior year[77](index=77&type=chunk) [Loss from Discontinued Operations](index=17&type=section&id=Loss%20from%20Discontinued%20Operations) - Income from discontinued operations for the three months ended June 30, 2025, was a small gain of **$15 thousand**, related to the Indiana Farm[83](index=83&type=chunk) - Loss from discontinued operations for the three months ended June 30, 2024, was **$(19.98) million**, encompassing all operating costs of the Indiana and Canadian Farms[83](index=83&type=chunk) - Loss from discontinued operations for the six months ended June 30, 2025, was **$(194) thousand**, a 99% reduction from $(28.43) million in the prior year[84](index=84&type=chunk)[90](index=90&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) - Net loss for the three months ended June 30, 2025, was **$(3.37) million**, a 93% reduction from $(50.51) million in the prior year[77](index=77&type=chunk) - Net loss for the six months ended June 30, 2025, was **$(2.97) million**, a 95% reduction from $(61.67) million in the prior year[84](index=84&type=chunk) - Operating loss for Q2 2025 decreased by **89%** YoY, and for H1 2025 decreased by **86%** YoY, primarily due to reduced asset impairment charges and operating expenses[77](index=77&type=chunk)[84](index=84&type=chunk) [Comparison of the three months ended June 30, 2025, to the three months ended June 30, 2024](index=17&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202025,%20to%20the%20three%20months%20ended%20June%2030,%202024) Operating Results (Three Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Dollar Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $0 | $80 | $(80) | (100)% | | Research and development | $0 | $77 | $(77) | (100)% | | General and administrative | $1,768 | $3,138 | $(1,370) | (44)% | | Asset impairment, net | $1,526 | $26,265 | $(24,739) | (94)% | | Operating loss | $(3,294) | $(29,560) | $26,266 | (89)% | | Other expense | $(94) | $(970) | $876 | (90)% | | Loss from continuing operations | $(3,388) | $(30,530) | $27,142 | (89)% | | Income (loss) from discontinued operations | $15 | $(19,984) | $19,999 | (100)% | | Net loss | $(3,373) | $(50,514) | $47,141 | (93)% | [Comparison of the six months ended June 30, 2025, to the six months ended June 30, 2024](index=18&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202025,%20to%20the%20six%20months%20ended%20June%2030,%202024) Operating Results (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Dollar Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $6 | $143 | $(137) | (96)% | | Research and development | $0 | $151 | $(151) | (100)% | | General and administrative | $3,329 | $5,528 | $(2,199) | (40)% | | Asset impairment, net | $1,219 | $26,265 | $(25,046) | (95)% | | Operating loss | $(4,554) | $(32,087) | $27,533 | (86)% | | Other income (expense) | $1,776 | $(1,153) | $2,929 | (254)% | | Loss from continuing operations | $(2,778) | $(33,240) | $30,462 | (92)% | | Loss from discontinued operations | $(194) | $(28,432) | $28,238 | (99)% | | Net loss | $(2,972) | $(61,672) | $58,700 | (95)% | [Cash Flows](index=19&type=section&id=Cash%20Flows) - Net cash used in operating activities decreased by **55%** due to reductions in personnel, farm operating costs, depreciation charges, and share-based compensation[94](index=94&type=chunk) - Net cash provided by investing activities significantly increased to **$4.6 million** for H1 2025, primarily from asset sales, compared to a net use of $1.85 million in H1 2024[95](index=95&type=chunk) Cash Flow Summary (Six Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Dollar Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net cash (used in) provided by: Operating activities | $(3,910) | $(8,742) | $4,832 | (55)% | | Investing activities | $4,632 | $(1,851) | $6,483 | (350)% | | Financing activities | $(232) | $2,122 | $(2,354) | (111)% | | Effect of exchange rate changes on cash | $9 | $(5) | $14 | (280)% | | Net change in cash | $499 | $(8,476) | $8,975 | (106)% | [Cash Flows from Operating Activities](index=19&type=section&id=Cash%20Flows%20from%20Operating%20Activities) - Net cash used in operating activities for H1 2025 was **$(3.91) million**, primarily from a $3.0 million net loss and $206 thousand in working capital uses, partially offset by non-cash items[93](index=93&type=chunk) - Net cash used in operating activities for H1 2024 was **$(8.74) million**, primarily from a $61.7 million net loss, partially offset by non-cash charges and working capital sources[93](index=93&type=chunk) [Cash Flows from Investing Activities](index=19&type=section&id=Cash%20Flows%20from%20Investing%20Activities) - The company received **$4.6 million** from asset sales during the six months ended June 30, 2025[95](index=95&type=chunk) - In the prior year, the company spent **$2.0 million** on construction and equipment purchases and received $149 thousand from asset sales[95](index=95&type=chunk) [Cash Flows from Financing Activities](index=19&type=section&id=Cash%20Flows%20from%20Financing%20Activities) - The company made **$232 thousand** in debt repayments during the six months ended June 30, 2025[96](index=96&type=chunk) - In the prior year, the company received **$5.1 million** from new debt and made $3.0 million in debt repayments[96](index=96&type=chunk) [Future Capital Requirements](index=19&type=section&id=Future%20Capital%20Requirements) - The company has incurred cumulative net losses and negative cash flows from operating activities since inception and expects this to continue[97](index=97&type=chunk) - As of June 30, 2025, the company had **$730 thousand** in cash and cash equivalents, raising substantial doubt about its ability to continue as a going concern[97](index=97&type=chunk) - The company plans to continue selling available Ohio Equipment Assets to increase cash liquidity[99](index=99&type=chunk) - Future financing may involve sales of non-core assets, equity offerings, debt financings, or strategic alliances, which could lead to dilution or restrictive covenants[100](index=100&type=chunk) [Critical Accounting Policies and Estimates](index=20&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the company's critical accounting policies and estimates during the six months ended June 30, 2025[103](index=103&type=chunk) [Smaller Reporting Company Status](index=20&type=section&id=Smaller%20Reporting%20Company%20Status) - The company qualifies as a 'smaller reporting company' with a market value of non-affiliate stock less than **$700 million** and annual revenue less than **$100 million**[104](index=104&type=chunk) - As a smaller reporting company, it can rely on exemptions from certain disclosure requirements, such as presenting two most recent fiscal years of audited financial statements and reduced executive compensation disclosures[105](index=105&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is interest rate risk from its fixed-rate debt, while foreign currency risk is now minimal - The company's primary exposure to market risk is **interest rate risk** associated with its fixed-rate debt financing[107](index=107&type=chunk) - Interest-bearing debt for continuing operations was **$7.4 million** at June 30, 2025, compared to $1.3 million at December 31, 2024[107](index=107&type=chunk) - The company does not expect to incur foreign translation gains or losses in the future due to the sale of its Canadian subsidiary[108](index=108&type=chunk) [Interest Rate Risk](index=20&type=section&id=Interest%20Rate%20Risk) - All of the company's interest-bearing debt is at fixed rates[107](index=107&type=chunk) [Foreign Currency Exchange Risk](index=21&type=section&id=Foreign%20Currency%20Exchange%20Risk) - The company's functional currency is the U.S. Dollar[108](index=108&type=chunk) - Foreign currency translation gains or losses are no longer expected after the sale of the Canadian subsidiary[108](index=108&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - As of June 30, 2025, the company's disclosure controls and procedures were evaluated and deemed **effective** at the reasonable assurance level[109](index=109&type=chunk) - There have been **no material changes** in internal control over financial reporting for the three months ended June 30, 2025[110](index=110&type=chunk) [Disclosure Controls and Procedures](index=21&type=section&id=Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures are designed to ensure timely recording, processing, summarizing, and reporting of information required by SEC rules[109](index=109&type=chunk) [Changes in Internal Control Over Financial Reporting](index=21&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[110](index=110&type=chunk) [PART II. OTHER INFORMATION](index=19&type=section&id=PART%20II%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, and other required corporate disclosures [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) Discloses two legal proceedings in Ohio related to unpaid construction services and equipment orders for the Ohio Farm Project - Gilbane Building Company filed a complaint in February 2025 seeking **$1.5 million** for unpaid construction services at the Ohio Farm Project, and this liability has been recorded[111](index=111&type=chunk) - Buckeye Power Sales Co Inc filed a complaint in June 2025 seeking **$930 thousand** plus interest for an ordered switch gear; this liability has not been recorded as the items were not shipped[112](index=112&type=chunk) - Management believes other legal proceedings will not have a material adverse effect on the company's future business, consolidated results of operations, cash flows, or financial position[113](index=113&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) Highlights key risks including a history of net losses, going concern uncertainty, and potential delisting from Nasdaq - The company has a history of cumulative net losses (**$373 million**) and expects to incur additional losses, raising substantial doubt about its ability to continue as a going concern[117](index=117&type=chunk)[118](index=118&type=chunk) - Delays and defects may prevent the commencement of Ohio Farm Project operations, potentially increasing costs or making it unprofitable[119](index=119&type=chunk) - The company faces a risk of **delisting from Nasdaq** due to its common stock trading below $1.00 per share, though it has been granted an extension until January 12, 2026, to regain compliance[120](index=120&type=chunk) - Delisting from Nasdaq could impair liquidity, reduce market quotations, limit news coverage, and decrease the ability to issue additional securities or obtain financing[120](index=120&type=chunk)[121](index=121&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[122](index=122&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - No defaults upon senior securities occurred during the period[123](index=123&type=chunk) [Item 4. Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[124](index=124&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[125](index=125&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and XBRL-related documents - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[128](index=128&type=chunk) - XBRL instance, taxonomy extension schema, calculation linkbase, label linkbase, presentation linkbase, and definition linkbase documents are included[128](index=128&type=chunk) [Signatures](index=25&type=section&id=Signatures) Provides the official sign-off on the report by the company's authorized officer - The report was signed on August 5, 2025, by David A Frank, Interim Chief Executive Officer, Chief Financial Officer, and Treasurer[132](index=132&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) AquaBounty Technologies reported a significant reduction in Q2 2025 net loss, driven by asset sales and lower impairment charges, enhancing liquidity for Ohio Farm Project strategic alternatives [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) AquaBounty Technologies reported a significant reduction in Q2 2025 net loss, primarily due to asset sales and reduced impairment charges, enhancing liquidity for Ohio Farm Project strategic alternatives Key Financial Highlights (Q2 2025 vs. Q2 2024 / Dec 31, 2024) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change | As of June 30, 2025 ($) | As of Dec 31, 2024 ($) | Change | | :-------------------------------- | :------ | :------ | :----- | :------------------ | :----------------- | :----- | | Net Loss | $(3.4) million | $(50.5) million | Reduced | N/A | N/A | N/A | | Net Proceeds from Asset Sales | $2.4 million | N/A | N/A | N/A | N/A | N/A | | Cash and Cash Equivalents | N/A | N/A | N/A | $730 thousand | $230 thousand | Increased | - Net loss for Q2 2025 was **$3.4 million**, a significant reduction from **$50.5 million** in Q2 2024, including a **$1.2 million** non-cash asset impairment charge[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted the strategy of selling Ohio Equipment Assets to generate cash and liquidity, funding strategic alternatives for the Ohio Farm Project - The company generated **$2.4 million** in net proceeds from selling Ohio Equipment Assets on June 11, 2025[3](index=3&type=chunk) - Proceeds from asset sales provided liquidity to pursue strategic alternatives for the Ohio Farm Project with an investment banker[3](index=3&type=chunk) [About AquaBounty Technologies, Inc.](index=1&type=section&id=About%20AquaBounty) AquaBounty Technologies pioneers land-based aquaculture using recirculating aquaculture system (RAS) farms, prioritizing disease prevention and fish containment near markets [Company Overview](index=1&type=section&id=Company%20Overview) AquaBounty Technologies pioneers land-based aquaculture using recirculating aquaculture system (RAS) farms, prioritizing disease prevention and fish containment near markets - AquaBounty Technologies is a pioneer in land-based aquaculture, operating recirculating aquaculture system (RAS) farms[4](index=4&type=chunk) - Farms are designed for disease prevention and multiple levels of fish containment to protect wild populations, located near consumption markets[4](index=4&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer for forward-looking statements, outlining significant risks and uncertainties that could materially affect actual results [Disclaimer and Risk Factors](index=1&type=section&id=Disclaimer%20and%20Risk%20Factors) This disclaimer highlights significant risks and uncertainties for forward-looking statements, including net losses, going concern ability, fundraising, operational delays, and Ohio Farm Project financing - Forward-looking statements are subject to significant risks and uncertainties, including those related to winding down farming operations and asset sales[5](index=5&type=chunk) - Key factors causing actual results to differ include a history of net losses, going concern ability, fundraising challenges, and Ohio Farm Project risks[5](index=5&type=chunk) - AquaBounty has no obligation to update or revise forward-looking statements, except as legally required[7](index=7&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents AquaBounty's unaudited consolidated balance sheets, statements of operations and comprehensive loss, and statements of cash flows for the reported periods [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets and liabilities decreased, primarily due to a reduction in current assets held for sale, leading to a decrease in total stockholders' equity Consolidated Balance Sheets (Unaudited) | | As of June 30, 2025 ($) | As of December 31, 2024 ($) | | :------------------------------------ | :-------------------- | :---------------------- | | **Assets** | | | | Cash and cash equivalents | $729,569 | $230,362 | | Prepaid expenses and other current assets | $3,115,868 | $292,018 | | Current assets held for sale | $100,000 | $10,819,909 | | Total current assets | $3,945,437 | $11,342,289 | | Property, plant and equipment, net | $22,668,000 | $22,668,000 | | Right of use assets, net | $37,531 | $51,509 | | **Total assets** | **$26,650,968** | **$34,061,798** | | **Liabilities and stockholders' equity** | | | | Accounts payable and accrued liabilities | $3,317,732 | $10,104,853 | | Accrued employee compensation | $964,615 | $977,088 | | Current debt | $8,505,992 | $1,261,039 | | Other current liabilities | $29,710 | $28,527 | | Current liabilities held for sale | $211,173 | $3,830,041 | | Total current liabilities | $13,029,222 | $16,201,548 | | Long-term lease obligations | $7,821 | $22,982 | | Long-term debt, net | — | $1,996,558 | | **Total liabilities** | **$13,037,043** | **$18,221,088** | | **Stockholders' equity** | | | | Common stock | $3,878 | $3,866 | | Additional paid-in capital | $386,354,487 | $386,297,611 | | Accumulated other comprehensive loss | — | $(688,229) | | Accumulated deficit | $(372,744,440) | $(369,772,538) | | **Total stockholders' equity** | **$13,613,925** | **$15,840,710** | | **Total liabilities and stockholders' equity** | **$26,650,968** | **$34,061,798** | - Total assets decreased by approximately **$7.4 million**, primarily due to a **$10.7 million** decrease in current assets held for sale, partially offset by increased cash and prepaid expenses[10](index=10&type=chunk) - Total liabilities decreased by approximately **$5.18 million**, mainly from reduced accounts payable, accrued liabilities, and current liabilities held for sale, despite increased current debt[10](index=10&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2025, AquaBounty reported a substantially improved net loss, primarily due to significantly lower asset impairment charges and reduced general and administrative expenses Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Costs and expenses** | | | | | | Sales and marketing | $0 | $79,702 | $6,613 | $143,335 | | Research and development | $0 | $76,766 | $0 | $150,616 | | General and administrative | $1,768,596 | $3,138,502 | $3,329,032 | $5,527,736 | | Asset impairment, net | $1,525,752 | $26,264,943 | $1,218,866 | $26,264,943 | | **Total costs and expenses** | **$3,294,348** | **$29,559,913** | **$4,554,511** | **$32,086,630** | | Operating loss | $(3,294,348) | $(29,559,913) | $(4,554,511) | $(32,086,630) | | **Other income (expense)** | | | | | | Interest expense | $(90,585) | $(963,036) | $(224,235) | $(1,144,277) | | Loan forgiveness | $0 | $0 | $2,008,046 | $0 | | Other expense, net | $(2,979) | $(6,876) | $(7,448) | $(9,323) | | **Total other income (expense)** | **$(93,564)** | **$(969,912)** | **$1,776,363** | **$(1,153,600)** | | Loss from continuing operations | $(3,387,912) | $(30,529,825) | $(2,778,148) | $(33,240,230) | | Income (loss) from discontinued operations | $14,875 | $(19,984,416) | $(193,754) | $(28,432,259) | | **Net loss** | **$(3,373,037)** | **$(50,514,241)** | **$(2,971,902)** | **$(61,672,489)** | | Foreign currency translation gain (loss) | $0 | $(57,335) | $688,229 | $(173,642) | | **Comprehensive loss** | **$(3,373,037)** | **$(50,571,576)** | **$(2,283,673)** | **$(61,846,131)** | | Basic and diluted net loss per share | $(0.87) | $(13.08) | $(0.77) | $(16.00) | | Weighted average number of common shares | 3,872,587 | 3,860,487 | 3,869,708 | 3,854,958 | - Net loss significantly decreased from **$(50.5) million** in Q2 2024 to **$(3.4) million** in Q2 2025, primarily due to asset impairment charges reducing from **$26.3 million** to **$1.5 million**[11](index=11&type=chunk) - Basic and diluted net loss per share improved from **$(13.08)** in Q2 2024 to **$(0.87)** in Q2 2025[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, AquaBounty reported improved net cash outflow from operating activities and significant cash generation from investing activities, primarily asset sales, leading to an increase in cash and cash equivalents Consolidated Statements of Cash Flows (Unaudited) | | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | | **Operating activities** | | | | Net loss | $(2,971,902) | $(61,672,489) | | Long-lived asset impairment | $1,218,866 | $48,733,222 | | Loan forgiveness | $(2,008,046) | $0 | | Net cash used in operating activities | $(3,910,047) | $(8,741,616) | | **Investing activities** | | | | Purchases of and deposits on property, plant and equipment | $0 | $(2,000,084) | | Proceeds from asset sales | $4,632,679 | $149,282 | | **Net cash provided by (used in) investing activities** | **$4,632,679** | **$(1,850,802)** | | **Financing activities** | | | | Proceeds from issuance of debt | $0 | $5,117,292 | | Repayment of term debt | $(232,194) | $(2,995,467) | | **Net cash (used in) provided by financing activities** | **$(232,194)** | **$2,121,825** | | Effect of exchange rate changes on cash and cash equivalents | $8,769 | $(4,937) | | **Net change in cash and cash equivalents** | **$499,207** | **$(8,475,530)** | | Cash and cash equivalents at beginning of period | $230,362 | $9,203,869 | | **Cash and cash equivalents at end of period** | **$729,569** | **$728,339** | - Net cash used in operating activities decreased to **$(3.91) million** for the six months ended June 30, 2025, from **$(8.74) million** in the prior year, largely due to reduced net loss and asset impairment[13](index=13&type=chunk) - Net cash provided by investing activities was **$4.63 million**, a significant improvement from **$(1.85) million** used in the prior year, driven by **$4.63 million** in proceeds from asset sales[13](index=13&type=chunk) - Cash and cash equivalents at period end increased to **$729,569** from **$230,362** at the beginning of the period[13](index=13&type=chunk)

Core Insights - AquaBounty Technologies, Inc. reported a net loss of $3.4 million for Q2 2025, a significant reduction from a net loss of $50.5 million in Q2 2024, indicating improved financial performance [6] - The company generated $2.4 million in net proceeds from the sale of certain Ohio Equipment Assets, which is part of its strategy to enhance liquidity and explore strategic alternatives for its Ohio Farm Project [3][6] - As of June 30, 2025, AquaBounty's cash and cash equivalents increased to $730 thousand from $230 thousand at the end of 2024, reflecting improved cash management [6][8] Financial Performance - Total costs and expenses for Q2 2025 were $3.29 million, down from $29.56 million in Q2 2024, showcasing a substantial decrease in operational costs [10] - The company reported an operating loss of $3.29 million for Q2 2025 compared to an operating loss of $29.56 million for the same period in the previous year [10] - The basic and diluted net loss per share for Q2 2025 was $0.87, a decrease from $13.08 in Q2 2024, indicating a reduction in losses on a per-share basis [10] Balance Sheet Overview - Total assets decreased to $26.65 million as of June 30, 2025, down from $34.06 million at the end of 2024, primarily due to the sale of assets and ongoing operational challenges [8] - Current liabilities were reported at $13.03 million, a decrease from $16.20 million at the end of 2024, reflecting improved management of short-term obligations [8] - Stockholders' equity decreased to $13.61 million from $15.84 million, indicating a decline in the company's net worth [8] Cash Flow Analysis - Net cash used in operating activities for the first half of 2025 was $3.91 million, a reduction from $8.74 million in the same period of 2024, suggesting improved cash flow management [11] - The company generated $4.63 million from investing activities, primarily from asset sales, contrasting with a net cash outflow of $1.85 million in the previous year [11] - Cash and cash equivalents at the end of the reporting period were $729.57 thousand, showing a slight increase from $728.34 thousand at the end of the previous year [11]

[First Quarter 2025 Financial Results Overview](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results%20Overview) [First Quarter 2025 Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) AquaBounty Technologies reported a significant financial turnaround in Q1 2025, moving from a net loss to net income, primarily driven by a non-cash gain from loan forgiveness and proceeds from strategic asset sales, which also boosted the company's cash position | Metric | Q1 2025 | Q1 2024 | | :------------------------------------ | :-------------- | :-------------- | | Net Income (Loss) | $401 thousand | $(11.16) million | | Non-cash gain on loan forgiveness | $2.0 million | N/A | | Net gain on Ohio Equipment Assets sale | $307 thousand | N/A | - On February 11, 2025, the Company completed the sale of certain Ohio Equipment Assets for net proceeds of **$2.3 million**[3](index=3&type=chunk)[6](index=6&type=chunk) - On March 3, 2025, the Company completed the sale of its Canadian Farms and Corporate IP for net proceeds of **$1.9 million**[3](index=3&type=chunk)[6](index=6&type=chunk) | Metric | As of March 31, 2025 | As of Dec 31, 2024 | Change | | :------------------------------------ | :------------------- | :----------------- | :------------------- | | Cash, cash equivalents and restricted cash | $1.4 million | $230 thousand | +$1.17 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) David Frank, CFO and Interim CEO, highlighted the company's ongoing efforts to assess strategic alternatives for the Ohio Farm Project and to sell assets to generate cash. Recent sales of Ohio Equipment Assets and Canadian Farms have provided crucial liquidity for these strategic pursuits - AquaBounty plans to continue assessing strategic alternatives for its partially constructed farm in Pioneer, Ohio ("Ohio Farm Project") and to market and sell available Ohio Equipment Assets to generate cash[3](index=3&type=chunk) - The sale of certain Ohio Equipment Assets, purchased for the Ohio Farm Project, generated net proceeds of **$2.3 million**[3](index=3&type=chunk) - The sale of Canadian Farms, including the Company's Corporate IP, generated net proceeds of **$1.9 million**, after deducting commissions, fees, and the assumption of **$3.2 million** in outstanding loans. These transactions provided liquidity to continue pursuing strategic alternatives for the Ohio Farm Project[3](index=3&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) [About AquaBounty](index=1&type=section&id=About%20AquaBounty) AquaBounty Technologies is a pioneer in land-based aquaculture, utilizing recirculating aquaculture system (RAS) farms strategically located near consumption markets. Their farm design prioritizes disease prevention and multiple levels of fish containment to protect wild fish populations - AquaBounty Technologies, Inc. is a pioneer in land-based aquaculture[4](index=4&type=chunk) - The company's land-based recirculating aquaculture system (RAS) farms are located close to key consumption markets[4](index=4&type=chunk) - Farm designs are engineered to prevent disease and include multiple levels of fish containment to protect wild fish populations[4](index=4&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of March 31, 2025, shows a strengthened liquidity position with a significant increase in cash and cash equivalents, a reduction in assets and liabilities held for sale, and the elimination of long-term debt, leading to an overall decrease in total liabilities and an increase in stockholders' equity compared to December 31, 2024 | Metric | March 31, 2025 | December 31, 2024 | Change | | :------------------------------------ | :------------- | :---------------- | :---------------- | | Cash and cash equivalents | $1,366,328 | $230,362 | +$1,135,966 | | Current assets held for sale | $4,148,500 | $10,819,909 | -$6,671,409 | | Total assets | $29,434,440 | $34,061,798 | -$4,627,358 | | Current liabilities held for sale | $287,290 | $3,830,041 | -$3,542,751 | | Long-term debt, net | $0 | $1,996,558 | -$1,996,558 | | Total liabilities | $12,464,205 | $18,221,088 | -$5,756,883 | | Total stockholders' equity | $16,970,235 | $15,840,710 | +$1,129,525 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, AquaBounty significantly improved its financial performance, reporting net income compared to a substantial net loss in the prior year. This turnaround was primarily driven by reduced operating expenses, a gain on asset sales, and a significant non-cash gain from loan forgiveness, despite ongoing losses from discontinued operations | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sales and marketing | $6,613 | $63,633 | -$57,020 | | Research and development | $0 | $73,850 | -$73,850 | | General and administrative | $1,560,436 | $2,389,234 | -$828,798 | | Gain on asset sales, net | $(306,886) | $0 | N/A | | Operating loss | $(1,260,163) | $(2,526,717) | -$1,266,554 (reduction) | | Loan forgiveness | $2,008,046 | $0 | N/A | | Net income (loss) | $401,135 | $(11,158,248) | From loss to income | | Basic and diluted net income (loss) per share | $0.10 | $(2.90) | From loss to income | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows for Q1 2025 reflect a positive net change in cash, primarily due to significant cash provided by investing activities from asset sales, which offset cash used in operating activities. This marks a substantial improvement compared to the prior year's period, which saw a net negative change in cash | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(2,361,726) | $(4,415,926) | -$2,054,200 (reduction in cash used) | | Net cash provided by (used in) investing activities | $3,721,116 | $(1,125,954) | From cash used to cash provided | | Proceeds from asset sales | $3,721,116 | $0 | N/A | | Net cash used in financing activities | $(232,194) | $(66,727) | -$165,467 (increase in cash used) | | Net change in cash, cash equivalents and restricted cash | $1,135,966 | $(5,611,402) | From negative to positive change | | Cash, cash equivalents and restricted cash at end of period | $1,366,328 | $3,592,467 | -$2,226,139 | [Legal & Contact Information](index=1&type=section&id=Legal%20%26%20Contact%20Information) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) This section serves as a standard disclaimer, indicating that the press release contains forward-looking statements that are subject to significant risks and uncertainties. It advises investors not to place undue reliance on these statements, as actual results could differ materially due to various factors, including financial performance, operational challenges, and market conditions - The press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, which are neither promises nor guarantees[5](index=5&type=chunk) - These statements involve significant risks and uncertainties, including a history of net losses, ability to continue as a going concern, ability to raise additional funds, and risks related to operations, financing, and market volatility[5](index=5&type=chunk)[7](index=7&type=chunk) - AquaBounty undertakes no obligation to update or revise these forward-looking statements, and investors are directed to SEC filings for more information on risks[7](index=7&type=chunk) [Company & Investor Contacts](index=2&type=section&id=Company%20%26%20Investor%20Contacts) This section provides contact details for investor relations and media inquiries, facilitating communication with stakeholders - For investor inquiries, contact AquaBounty Technologies at investors@aquabounty.com[8](index=8&type=chunk) - For media inquiries, contact Vince McMorrow of Fahlgren Mortine at (614) 906-1671 or vince.mcmorrow@Fahlgren.com[8](index=8&type=chunk)

Core Insights - AquaBounty Technologies, Inc. reported a net income of $401 thousand for Q1 2025, a significant improvement compared to a net loss of $11.3 million in Q1 2024, largely due to a non-cash gain of $2 million from loan forgiveness [6][9] - The company has been actively selling assets to improve liquidity, including the sale of Ohio Equipment Assets for $2.3 million and Canadian Farms for $1.9 million, which has provided necessary cash flow to explore strategic alternatives for its Ohio Farm Project [3][6] - As of March 31, 2025, AquaBounty's cash and cash equivalents increased to $1.4 million from $230 thousand at the end of 2024, indicating improved liquidity [6][10] Financial Performance - Total revenues for Q1 2025 were not explicitly stated, but total costs and expenses were reported at $1.26 million, down from $2.53 million in Q1 2024, reflecting cost-cutting measures [9] - The operating loss for Q1 2025 was $1.26 million, a reduction from the previous year's loss of $2.53 million, indicating improved operational efficiency [9] - The company reported a comprehensive income of $1.09 million for Q1 2025, compared to a comprehensive loss of $11.27 million in Q1 2024, showcasing a turnaround in financial health [9] Asset Management - Current assets decreased to $6.72 million as of March 31, 2025, from $11.34 million at the end of 2024, primarily due to the sale of assets [8] - Total liabilities decreased significantly to $12.46 million from $18.22 million, reflecting the impact of asset sales and improved cash management [8] - Stockholders' equity increased to $16.97 million from $15.84 million, indicating a strengthening balance sheet [8] Strategic Initiatives - The company is exploring strategic alternatives for its Ohio Farm Project, which is currently partially constructed, and is working with investment bankers to assess options [3] - AquaBounty aims to keep stakeholders informed about its progress in asset sales and strategic initiatives, emphasizing transparency in its operations [3]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ Form 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________ to _____________________ Commission File Number: 001-36426 ____________ AquaBounty Technologies, Inc. (Exact name of registrant as spe ...

Financial Performance - The company recorded impairment charges totaling $129.8 million in 2024, including $22.5 million for the Indiana Farm and $57.3 million for the Ohio Farm Site[25][26][27]. - Cumulative net losses from incorporation to December 31, 2024, amount to approximately $370 million, with expectations of incurring additional losses in future periods[56]. - The company recorded a net loss of $149.2 million for the year ended December 31, 2024, an increase of 441% compared to the previous year[131]. - The company incurred a net loss of $149.2 million for the year ended December 31, 2024, compared to a net loss of $27.6 million in 2023, reflecting a significant increase in losses[142][143]. - Total costs and expenses for 2024 were $111.44 million, a substantial rise from $13.67 million in 2023, primarily due to a long-lived asset impairment charge of $101.91 million[202]. - The company’s accumulated deficit increased to $369.77 million as of December 31, 2024, compared to $220.58 million in 2023, highlighting ongoing financial challenges[200]. - The basic and diluted net loss per share from continuing operations was $(29.47) in 2024, compared to $(3.60) in 2023, reflecting worsening financial performance[202]. Cash and Liquidity - As of December 31, 2024, the company had only $230 thousand in cash and cash equivalents, raising substantial doubt about its ability to continue as a going concern[56]. - As of March 24, 2025, AquaBounty had an accumulated deficit of $370 million and $557 thousand in cash[118]. - Cash and cash equivalents decreased to $230,362 as of December 31, 2024, down from $9.20 million at the end of 2023[200]. - The company had an accumulated deficit of $370 million as of December 31, 2024, and expects to continue experiencing significant losses in the foreseeable future[138]. - The company currently has all cash and cash equivalents deposited in Citizens Bank, N.A., posing a risk of loss if the financial institution fails[78]. Project Developments - AquaBounty paused construction of the Ohio Farm Project in June 2023 due to rising costs, with total estimated completion costs now between $485 million and $495 million[47][48]. - Construction of the Ohio Farm Project was paused in July 2023 due to rising project costs, and there is uncertainty regarding vendor availability for resuming construction[59]. - The company is seeking additional capital to fund the Ohio Farm Project and has engaged an investment bank to explore funding and strategic alternatives[58]. - The company may face delays in obtaining necessary approvals and permits for the Ohio Farm Project, which could further delay construction and commercialization efforts[61]. - The company sold its Indiana Farm in July 2024 and Canadian Farms in March 2025, designating these as discontinued operations[24]. Strategic Management - AquaBounty engaged an investment bank to explore funding and strategic alternatives for the Ohio Farm Project, requiring approximately $400 million to complete construction[50]. - The company has sold its intellectual property for GE Atlantic salmon as part of its strategic asset management[31]. - The company is exploring strategic alternatives to raise funds, including equity or debt financing, mergers, and asset sales[215]. - The Company is focusing on cost containment to preserve cash and extend its available liquidity[212]. - The Company continues to work with an investment bank to identify optimal paths for realizing the potential of its remaining assets[212]. Regulatory and Compliance - The company received a Nasdaq notice on October 31, 2022, due to its common stock closing bid price being below $1.00 for 30 consecutive business days, with a compliance period until May 1, 2023[82]. - A reverse stock split of 1-for-20 was approved by stockholders on October 12, 2023, and implemented on October 16, 2023, allowing the company to regain compliance with Nasdaq's minimum bid price requirement[83]. - The company has a public float of less than $250 million and annual revenue below $100 million, qualifying it as a "smaller reporting company" under SEC rules[88]. - The company is subject to the regulations of the Public Company Accounting Oversight Board (PCAOB) and must maintain independence in its financial reporting[190]. Cybersecurity - The company has developed a cybersecurity risk management program based on the NIST Cybersecurity Framework to protect its critical systems and information[96]. - The Board of Directors oversees the cybersecurity risk management program and receives periodic updates on cybersecurity risks and incidents[98]. - The company has not identified any material cybersecurity breaches during 2024, indicating effective risk management[97]. Operational Challenges - The company lacks extensive experience in managing large commercial-scale facilities, which may lead to operational challenges and increased costs[69]. - The company is vulnerable to disease outbreaks in salmon farming, which can significantly impact production costs and harvest yields[68]. - Investor concerns regarding the financial services industry could lead to less favorable financing terms, impacting the company's ability to secure necessary funding[77]. Asset Management - The company completed the sale of its Indiana Farm and certain Ohio Equipment Assets for net proceeds of $9.2 million in 2024, and the sale of Canadian operations for $1.9 million in March 2025[148]. - The company plans to continue selling non-core assets and equipment to fund working capital and the construction of its Ohio Farm Project[148][149]. - The company has raised substantial doubt about its ability to continue as a going concern within one year after the issuance of its consolidated financial statements[146][150].

Financial Performance - For the year ended December 31, 2024, product revenue totaled $789 thousand, a year-over-year decrease of 68% compared to $2.5 million in 2023[7] - Net loss for the year ended December 31, 2024 increased to $149.2 million compared to $27.6 million in 2023, including asset impairment charges of $129.8 million[7] - The company reported a comprehensive loss of $149.5 million for the year ended December 31, 2024, compared to $27.4 million in 2023[12] Cash and Assets - Cash, cash equivalents, and restricted cash totaled $230 thousand as of December 31, 2024, down from $9.2 million as of December 31, 2023[7] - Total current assets decreased to $11.3 million in 2024 from $31.0 million in 2023[11] - Total liabilities decreased to $18.2 million in 2024 from $22.5 million in 2023[11] Asset Sales and Proceeds - The company completed the auction of certain Ohio Equipment Assets for net proceeds of $2.2 million on February 11, 2025[4] - The sale of Canadian Farms and Corporate IP generated net proceeds of $1.9 million on March 3, 2025[4] Project Status and Future Plans - Construction activities for the Ohio Farm Site remained on pause throughout 2024, pending new sources of financing[7] - The company plans to continue assessing strategic alternatives for the Ohio Farm Project and marketing available assets to generate cash[4]

Core Insights - AquaBounty Technologies, Inc. reported significant financial challenges for the year ended December 31, 2024, including a substantial net loss and a drastic decrease in product revenue compared to the previous year [3][8]. Financial Performance - Product revenue for 2024 was $789 thousand, a decrease of 68% from $2.5 million in 2023 [8]. - The net loss for 2024 increased to $149.2 million, compared to $27.6 million in 2023, with asset impairment charges of $129.8 million included in this loss [8][12]. - Cash, cash equivalents, and restricted cash totaled $230 thousand as of December 31, 2024, down from $9.2 million at the end of 2023 [8][13]. Operational Developments - The company attempted to raise funds to resume construction at its Ohio Farm Site but was unsuccessful, leading to the sale of non-core assets for liquidity [3][4]. - The Indiana Farm was sold in July 2024, and the Canadian Farms operations were closed in December 2024 [3][8]. - An auction of certain Ohio Equipment Assets yielded net proceeds of $2.2 million in February 2025, and the sale of Canadian Farms and Corporate IP generated $1.9 million in March 2025 [4][8]. Asset and Liability Overview - Total assets decreased from $187.6 million in 2023 to $34.1 million in 2024, reflecting significant asset impairment and the sale of operations [10][11]. - Total liabilities were reported at $18.2 million as of December 31, 2024, compared to $22.5 million in 2023 [11]. Future Outlook - The company plans to continue exploring strategic alternatives for the Ohio Farm Project and will keep stakeholders informed of progress [4][5].

Core Points - AquaBounty Technologies, Inc. has announced the wind down of its hatchery operations in Bay Fortune, which includes workforce reductions and the exit of several senior management members [1][2] - The company has cited insufficient liquidity as the primary reason for the closure, despite efforts to raise capital through the sale of farms and equipment [2] - Key management changes include the resignation of CEO Dave Melbourne and the departure of COO Alejandro Rojas and CPO Melissa Daley due to the elimination of their positions [3] Company Operations - The Bay Fortune facility was AquaBounty's only remaining operating farm, and the wind down will involve culling all remaining fish and significantly reducing personnel over the coming weeks [2] - The company plans to continue working with its investment banker to explore alternatives for its Ohio farm project and will market available assets to generate cash [4] Company Background - AquaBounty Technologies positions itself as a leader in land-based aquaculture, focusing on innovative solutions to address food insecurity and climate change [5]