|
|
|
Delaware
|
04-3156167
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. employer
identification no.)
|
Title of each class
|
Name of exchange on which registered
|
Common Stock, par value $0.001 per share
|
The NASDAQ Stock Market LLC
|
|
ANNUAL REPORT ON FORM 10-K
|
||
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
|
||
Table of Contents
|
||
PART I
|
|
Page
|
PART II
|
|
|
PART III
|
|
|
PART IV
|
|
|
•
|
the anticipated benefits and characteristics of our AquAdvantage® Salmon product;
|
•
|
The implementation and likelihood of achieving the business plan, future revenue, and operating results;
|
•
|
developments concerning our research projects;
|
•
|
our expectations regarding our ability to successfully enter new markets or develop additional products;
|
•
|
our competitive position and developments and projections relating to our competitors and our industry;
|
•
|
expectations regarding anticipated operating results;
|
•
|
our cash position and ability to raise additional capital to finance our activities;
|
•
|
our ability to protect our intellectual property and other proprietary rights and technologies;
|
•
|
the impact of and our ability to adapt to changes in laws or regulations and policies;
|
•
|
the ability to secure any necessary regulatory approvals to commercialize any products;
|
•
|
the rate and degree of market acceptance of any products developed through the application of genetic engineering, including genetically modified fish;
|
•
|
our ability to retain and recruit key personnel;
|
•
|
the success of any of our future acquisitions or investments;
|
•
|
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act (the “JOBS Act”); and
|
•
|
our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing.
|
•
|
In August 2006, we submitted to the CVM the last correspondence for the review of the molecular characterization of the AquAdvantage construct. On October 6, 2006, we received a letter from the CVM stating “the data and information that you have submitted adequately supports the molecular characterization of the opAFP-GHc2 construct.”
|
•
|
In May 2007, we submitted to the CVM the last correspondence for the review of the molecular characterization of the AquAdvantage Salmon lineage. On July 2, 2008, we received a letter from the CVM stating “[w]e have reviewed the data and information you have submitted in support of the molecular characterization of the genetically engineered (GE) salmon referred to as ‘AquAdvantage Salmon’ and find that it is adequate support to conclude the molecular characterization of the inserted rDNA construct and GE animal lineage step of our review.”
|
•
|
In July 2009, we submitted to the CVM the last of the correspondence for the review of AquAdvantage Salmon claim validation. On March 12, 2010, we received a letter from the CVM stating “[w]e have reviewed the data and information that you have submitted in support of the Claim Validation of the genetically engineered (GE) salmon referred to as ‘AquAdvantage Salmon’, and consider this section complete.”
|
•
|
In December 2009, we submitted to the CVM the last of the correspondence for the review of the phenotypic characterization of AquAdvantage Salmon. On June 4, 2010, we received a letter from the CVM stating “[w]e have reviewed the data and information that you have submitted in support of the phenotypic characterization of the genetically engineered (GE) salmon referred to as ‘AquAdvantage Salmon’ and find that it is adequate support to conclude the phenotypic characterization step of our review.”
|
•
|
In March 2010, we submitted to the CVM the final correspondence for the review of data submitted in support of the safety of food from AquAdvantage Salmon. On August 27, 2010, we received a letter from the CVM stating “[w]e have reviewed the data and information that you have submitted in support of the food safety assessment of food from the genetically engineered (GE) salmon referred to as ‘AquAdvantage Salmon’ and find that it is adequate to conclude our evaluation of food safety.”
|
•
|
In April 2010, we submitted to the CVM the last of the correspondence for the review of the genotypic and phenotypic durability of AquAdvantage Salmon. On June 11, 2010, we received a letter from the CVM stating “[w]e have reviewed the data and information that you have submitted in support of the Genotypic and Phenotypic Durability of the genetically engineered (GE) salmon referred to as ‘AquAdvantage Salmon’ and find that you have adequately supported the Genotypic and Phenotypic Durability step of our review.”
|
•
|
a majority of our Board of Directors consist of independent directors;
|
•
|
compensation of officers be determined or recommended to our Board of Directors by a majority of its independent directors or by a compensation committee comprised solely of independent directors; and
|
•
|
director nominees be selected or recommended to our Board of Directors by a majority of its independent directors or by a nominating committee that is composed entirely of independent directors.
|
•
|
providing that the number of members of our board is limited to a range fixed by our bylaws;
|
•
|
establishing advance notice requirements for nominations of candidates for election to our Board of Directors or for proposing matters that can be acted on by shareholders at shareholder meetings; and
|
•
|
authorizing the issuance of “blank check” preferred stock, which could be issued by our Board of Directors to issue securities with voting rights and thwart a takeover attempt.
|
|
|
Price Per Share of Common
|
||||||||||||||
Quarterly Period
|
|
Low
|
|
High
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Quarter ended March 31, 2016
|
|
£
|
6.60
|
|
|
$
|
9.51
|
|
|
£
|
8.25
|
|
|
$
|
11.85
|
|
Quarter ended June 30, 2016
|
|
£
|
4.05
|
|
|
$
|
5.87
|
|
|
£
|
11.85
|
|
|
$
|
17.26
|
|
Quarter ended September 30, 2016
|
|
£
|
7.35
|
|
|
$
|
9.67
|
|
|
£
|
10.95
|
|
|
$
|
14.18
|
|
Quarter ended December 31, 2016
|
|
£
|
7.20
|
|
|
$
|
8.81
|
|
|
£
|
9.15
|
|
|
$
|
11.79
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Quarter ended March 31, 2017
|
|
£
|
4.28
|
|
|
$
|
5.20
|
|
|
£
|
21.79
|
|
|
$
|
26.49
|
|
Period to May 31, 2017
|
|
£
|
6.01
|
|
|
$
|
7.77
|
|
|
£
|
9.05
|
|
|
$
|
11.33
|
|
|
|
Price Per Share of Common
|
||||||
Quarterly Period
|
|
Low
|
|
High
|
||||
2017
|
|
|
|
|
||||
Quarter ended March 31, 2017
|
|
$
|
5.20
|
|
|
$
|
26.49
|
|
Quarter ended June 30, 2017
|
|
$
|
6.90
|
|
|
$
|
11.33
|
|
Quarter ended September 30, 2017
|
|
$
|
6.50
|
|
|
$
|
8.02
|
|
Quarter ended December 31, 2017
|
|
$
|
3.12
|
|
|
$
|
7.35
|
|
|
|
|
|
|
||||
2018
|
|
|
|
|
||||
Period to March 2, 2018
|
|
$
|
2.37
|
|
|
$
|
8.89
|
|
•
|
On December 16, 2016, we issued 1,212,908 shares of our common stock upon conversion of the Debt Facility.
|
•
|
On January 18, 2017, we issued 2,421,073 shares of our common stock to Intrexon at a per-share price of $10.326 for aggregate consideration of approximately $25 million. The net proceeds are to be used for general corporate purposes.
|
|
|
Fiscal Years Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands, except share data)
|
|
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Product revenues
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs and expenses:
|
|
|
|
|
|
|
||||||
Product Costs
|
|
51
|
|
|
—
|
|
|
—
|
|
|||
Sales and marketing
|
|
799
|
|
|
860
|
|
|
994
|
|
|||
Research and development
|
|
3,372
|
|
|
3,430
|
|
|
3,338
|
|
|||
General and administrative
|
|
5,063
|
|
|
3,775
|
|
|
2,697
|
|
|||
Total costs and expenses
|
|
9,285
|
|
|
8,065
|
|
|
7,029
|
|
|||
Operating loss
|
|
(9,232
|
)
|
|
(8,065)
|
|
|
(7,029)
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest and other income (expense), net
|
|
(27
|
)
|
|
(406)
|
|
|
(3)
|
|
|||
Total other income (expense)
|
|
(27
|
)
|
|
(406)
|
|
|
(3)
|
|
|||
Net loss
|
|
$
|
(9,259
|
)
|
|
$
|
(8,471
|
)
|
|
$
|
(7,032
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive income:
|
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
|
72
|
|
|
(60)
|
|
|
229
|
|
|||
Total other comprehensive income (loss)
|
|
72
|
|
|
(60)
|
|
|
229
|
|
|||
Comprehensive loss
|
|
$
|
(9,187
|
)
|
|
$
|
(8,531
|
)
|
|
$
|
(6,803
|
)
|
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share (1)
|
|
$
|
(1.06
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(1.40
|
)
|
Weighted average number of common shares—basic and diluted (1)
|
|
8,772,494
|
|
|
5,303,114
|
|
|
5,037,368
|
|
(1)
|
The basic and diluted net loss per share and weighted average number of common shares used in the net loss per share calculation have been adjusted to reflect the 1-for-30 reverse stock split effected January 2017.
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Balance Sheet Data:
|
|
|
|
||||
Cash and CD’s
|
$
|
506
|
|
|
$
|
3,335
|
|
Total assets
|
$
|
23,732
|
|
|
$
|
5,709
|
|
Debt
|
$
|
3,084
|
|
|
$
|
2,663
|
|
Stockholders’ equity
|
$
|
17,981
|
|
|
$
|
2,028
|
|
•
|
we received approval from the provincial regulatory authorities in Prince Edward Island for the construction of a broodstock facility to house our non-transgenic Atlantic salmon stock and a 250-metric-ton recirculating aquaculture system (“RAS”) facility to grow out our AquAdvantage Salmon;
|
•
|
we made our first sales of AquAdvantage Salmon from our farm site in Panama in June 2017;
|
•
|
we purchased certain assets of the aquaculture facility of Bell Fish Company LLC, which we intend to use to grow out our AquAdvantage Salmon for sale and consumption in the United States; and
|
•
|
we are also continuing an active search in both the United States and Canada for either an existing land-based RAS facility or a site on which to build a new facility for the commercial production of AquAdvantage Salmon.
|
•
|
salaries and related overhead expenses for personnel in research and development functions;
|
•
|
fees paid to contract research organizations, Intrexon, and consultants who perform research for us;
|
•
|
costs related to laboratory supplies used in our research and development efforts;
|
•
|
costs related to the operation of our field trials; and
|
•
|
costs related to the grow-out of fish at the Panama site that are not capitalized in inventory.
|
|
|
Year Ended
December 31, |
|
Dollar
Change |
|
%
Change |
|||||||||
|
|
2017
|
|
2016
|
|
||||||||||
Product revenue
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Product costs
|
|
51
|
|
|
—
|
|
|
51
|
|
|
0
|
%
|
|||
Sales and marketing
|
|
799
|
|
|
860
|
|
|
(61
|
)
|
|
(7
|
)%
|
|||
Research and development
|
|
3,372
|
|
|
3,430
|
|
|
(58
|
)
|
|
(2
|
)%
|
|||
General and administrative
|
|
5,063
|
|
|
3,775
|
|
|
1,288
|
|
|
34
|
%
|
|||
Operating loss
|
|
(9,232
|
)
|
|
(8,065
|
)
|
|
(1,167
|
)
|
|
14
|
%
|
|||
Total other (income) expense, net
|
|
(27
|
)
|
|
(406
|
)
|
|
379
|
|
|
(93
|
)%
|
|||
Net loss
|
|
$
|
(9,259
|
)
|
|
$
|
(8,471
|
)
|
|
$
|
(788
|
)
|
|
9
|
%
|
|
|
Years Ended
December 31, |
|
Dollar
Change |
|
%
Change |
|||||||||
|
|
2016
|
|
2015
|
|
||||||||||
|
|
|
|||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
|
$
|
860
|
|
|
$
|
994
|
|
|
$
|
(134
|
)
|
|
(13
|
)%
|
Research and development
|
|
3,430
|
|
|
3,338
|
|
|
92
|
|
|
3
|
%
|
|||
General and administrative
|
|
3,775
|
|
|
2,697
|
|
|
1,078
|
|
|
40
|
%
|
|||
Operating loss
|
|
(8,065
|
)
|
|
(7,029
|
)
|
|
(1,036
|
)
|
|
15
|
%
|
|||
Total other (income) expense, net
|
|
(406
|
)
|
|
(3
|
)
|
|
(403
|
)
|
|
13,433
|
%
|
|||
Net loss
|
|
$
|
(8,471
|
)
|
|
$
|
(7,032
|
)
|
|
$
|
(1,439
|
)
|
|
20
|
%
|
|
|
Years Ended
December 31, |
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
(9,101
|
)
|
|
$
|
(7,449
|
)
|
|
$
|
(6,748
|
)
|
Investing activities
|
|
(19,046
|
)
|
|
(1,074
|
)
|
|
(105
|
)
|
|||
Financing activities
|
|
25,238
|
|
|
10,541
|
|
|
3,044
|
|
|||
Effect of exchange rate changes on cash
|
|
77
|
|
|
(7
|
)
|
|
(41
|
)
|
|||
Net increase (decrease) in cash
|
|
$
|
(2,832
|
)
|
|
$
|
2,011
|
|
|
$
|
(3,850
|
)
|
•
|
the timing of additional regulatory approvals and permits for AquAdvantage Salmon, if any;
|
•
|
the cost to complete construction activities at our Rollo Bay site;
|
•
|
the cost to upgrade the equipment at our Indiana site; and
|
•
|
the timing of costs related to the FDA legal challenge.
|
|
|
Total
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
|
More than
5 years |
||||||||||
PEI Finance loan
|
|
$
|
545
|
|
|
$
|
20
|
|
|
$
|
42
|
|
|
$
|
483
|
|
|
$
|
—
|
|
ACOA Loan
|
|
251
|
|
|
30
|
|
|
60
|
|
|
60
|
|
|
101
|
|
|||||
AIF grant (1)
|
|
2,288
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,288
|
|
|||||
Maynard office lease
|
|
333
|
|
|
54
|
|
|
128
|
|
|
134
|
|
|
17
|
|
|||||
Panama site lease
|
|
60
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
3,477
|
|
|
$
|
164
|
|
|
$
|
230
|
|
|
$
|
677
|
|
|
$
|
2,406
|
|
•
|
In February 2013, we entered into the ECC with Intrexon, pursuant to which we are permitted to use Intrexon’s UltraVector and other technology platforms to develop and commercialize additional genetically modified traits in finfish for human consumption. We agreed under the ECC to pay Intrexon, on a quarterly basis, 16.66% of the gross profits calculated for each developed product. We also agreed to pay Intrexon 50% of the quarterly revenue obtained from a sublicensor in the event of a sublicensing arrangement. In addition, we agreed to reimburse Intrexon for the costs of certain services provided by Intrexon. Amounts required to be paid to Intrexon under the ECC are not included in the table above due to the uncertainty of the timing of payments.
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles;
|
•
|
provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
|
(i)
|
(ii)
|
(iii)
|
(iv)
|
(v)
|
(vi)
|
Exhibit Number
|
|
Exhibit Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Exhibit Number
|
|
Exhibit Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
AQUABOUNTY TECHNOLOGIES, INC.
|
|
By:
|
/s/ Ronald L. Stotish
|
|
Ronald L. Stotish
|
|
Chief Executive Officer, President, and Director
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Ronald L. Stotish
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 8, 2018
|
Ronald L. Stotish
|
|
|
|
|
|
|
|
|
|
/s/ David A. Frank
|
|
Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 8, 2018
|
David A. Frank
|
|
|
|
|
|
|
|
|
|
/s/ Richard J. Clothier
|
|
Chairman of the Board, Director
|
|
March 8, 2018
|
Richard J. Clothier
|
|
|
|
|
|
|
|
|
|
/s/ Jack A. Bobo
|
|
Director
|
|
March 8, 2018
|
Jack A. Bobo
|
|
|
|
|
|
|
|
|
|
/s/ Richard L. Huber
|
|
Director
|
|
March 8, 2018
|
Richard L. Huber
|
|
|
|
|
|
|
|
|
|
/s/ Christine St.Clare
|
|
Director
|
|
March 8, 2018
|
Christine St.Clare
|
|
|
|
|
|
|
|
|
|
/s/ Rick Sterling
|
|
Director
|
|
March 8, 2018
|
Rick Sterling
|
|
|
|
|
|
|
|
|
|
/s/ James C. Turk
|
|
Director
|
|
March 8, 2018
|
James C. Turk
|
|
|
|
|
|
|
As of
|
||||||
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
492,861
|
|
|
$
|
3,324,609
|
|
Certificate of deposit
|
|
13,422
|
|
|
10,666
|
|
||
Other receivables
|
|
183,926
|
|
|
164,743
|
|
||
Inventory
|
|
172,363
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
527,322
|
|
|
72,983
|
|
||
Total current assets
|
|
1,389,894
|
|
|
3,573,001
|
|
||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
21,802,976
|
|
|
1,723,707
|
|
||
Definite-lived intangible assets, net
|
|
184,995
|
|
|
198,698
|
|
||
Indefinite-lived intangible assets
|
|
191,800
|
|
|
191,800
|
|
||
Other assets
|
|
162,093
|
|
|
21,628
|
|
||
Total assets
|
|
$
|
23,731,758
|
|
|
$
|
5,708,834
|
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
|
$
|
2,666,855
|
|
|
$
|
1,017,851
|
|
Current debt
|
|
49,794
|
|
|
17,913
|
|
||
Total current liabilities
|
|
2,716,649
|
|
|
1,035,764
|
|
||
|
|
|
|
|
||||
Long-term debt
|
|
3,034,420
|
|
|
2,645,015
|
|
||
Total liabilities
|
|
5,751,069
|
|
|
3,680,779
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $0.001 par value, 200,000,000 shares authorized;
|
|
|
|
|
||||
8,895,094 (2016: 6,463,936) shares outstanding
|
|
8,895
|
|
|
6,464
|
|
||
Additional paid-in capital
|
|
126,718,186
|
|
|
101,581,724
|
|
||
Accumulated other comprehensive loss
|
|
(213,884
|
)
|
|
(286,272
|
)
|
||
Accumulated deficit
|
|
(108,532,508
|
)
|
|
(99,273,861
|
)
|
||
Total stockholders’ equity
|
|
17,980,689
|
|
|
2,028,055
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
23,731,758
|
|
|
$
|
5,708,834
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Product Revenues
|
|
$
|
53,278
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
|
||||||
Product Costs
|
|
50,777
|
|
|
—
|
|
|
—
|
|
|||
Sales and marketing
|
|
799,009
|
|
|
860,365
|
|
|
993,706
|
|
|||
Research and development
|
|
3,371,767
|
|
|
3,429,400
|
|
|
3,338,411
|
|
|||
General and administrative
|
|
5,063,824
|
|
|
3,775,289
|
|
|
2,696,369
|
|
|||
Total costs and expenses
|
|
9,285,377
|
|
|
8,065,054
|
|
|
7,028,486
|
|
|||
|
|
|
|
|
|
|
||||||
Operating loss
|
|
(9,232,099
|
)
|
|
(8,065,054
|
)
|
|
(7,028,486
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other income (expense)
|
|
|
|
|
|
|
||||||
Gain on disposal of equipment
|
|
941
|
|
|
2,861
|
|
|
1,912
|
|
|||
Interest expense
|
|
(21,537
|
)
|
|
(402,554
|
)
|
|
(10
|
)
|
|||
Other income (expense), net
|
|
(5,952
|
)
|
|
(5,914
|
)
|
|
(4,928
|
)
|
|||
Total other income (expense)
|
|
(26,548
|
)
|
|
(405,607
|
)
|
|
(3,026
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(9,258,647
|
)
|
|
$
|
(8,470,661
|
)
|
|
$
|
(7,031,512
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
|
72,388
|
|
|
(59,840
|
)
|
|
228,740
|
|
|||
Total other comprehensive income (loss)
|
|
72,388
|
|
|
(59,840
|
)
|
|
228,740
|
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive loss
|
|
$
|
(9,186,259
|
)
|
|
$
|
(8,530,501
|
)
|
|
$
|
(6,802,772
|
)
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
|
$
|
(1.06
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(1.40
|
)
|
Weighted average number of common shares -basic and diluted
|
|
8,772,494
|
|
|
5,303,114
|
|
|
5,037,368
|
|
|
|
Common stock issued and outstanding
|
|
Par value
|
|
Additional paid-in capital
|
|
Accumulated other comprehensive loss
|
|
Accumulated deficit
|
|
Total
|
|||||||||||
Balance at December 31, 2014
|
|
4,818,002
|
|
|
$
|
4,818
|
|
|
$
|
87,731,421
|
|
|
$
|
(455,172
|
)
|
|
$
|
(83,771,688
|
)
|
|
$
|
3,509,379
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
(7,031,512
|
)
|
|
(7,031,512
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
228,740
|
|
|
|
|
228,740
|
|
|||||||||
Issuance of common stock, net of expenses
|
|
424,269
|
|
|
425
|
|
|
2,999,575
|
|
|
|
|
|
|
3,000,000
|
|
|||||||
Share based compensation
|
|
5,334
|
|
|
5
|
|
|
237,817
|
|
|
|
|
|
|
237,822
|
|
|||||||
Balance at December 31, 2015
|
|
5,247,605
|
|
|
$
|
5,248
|
|
|
$
|
90,968,813
|
|
|
$
|
(226,432
|
)
|
|
$
|
(90,803,200
|
)
|
|
$
|
(55,571
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
(8,470,661
|
)
|
|
(8,470,661
|
)
|
|||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(59,840
|
)
|
|
|
|
(59,840)
|
|
|||||||||
Conversion of debt and accrued interest to common stock
|
|
1,212,908
|
|
|
1,213
|
|
|
10,394,620
|
|
|
|
|
|
|
10,395,833
|
|
|||||||
Cashless exercise of options for common stock
|
|
524
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||
Share based compensation
|
|
2,899
|
|
|
3
|
|
|
218,291
|
|
|
|
|
|
|
218,294
|
|
|||||||
Balance at December 31, 2016
|
|
6,463,936
|
|
|
$
|
6,464
|
|
|
$
|
101,581,724
|
|
|
$
|
(286,272
|
)
|
|
$
|
(99,273,861
|
)
|
|
$
|
2,028,055
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
(9,258,647
|
)
|
|
(9,258,647
|
)
|
|||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
72,388
|
|
|
|
|
72,388
|
|
|||||||||
Issuance of common stock, net of expenses
|
|
2,421,073
|
|
|
2,421
|
|
|
24,986,836
|
|
|
|
|
|
|
24,989,257
|
|
|||||||
Exercise of options for common stock
|
|
8,334
|
|
|
8
|
|
|
27,494
|
|
|
|
|
|
|
27,502
|
|
|||||||
Share based compensation
|
|
1,751
|
|
|
2
|
|
|
122,132
|
|
|
|
|
|
|
122,134
|
|
|||||||
Balance at December 31, 2017
|
|
8,895,094
|
|
|
$
|
8,895
|
|
|
$
|
126,718,186
|
|
|
$
|
(213,884
|
)
|
|
$
|
(108,532,508
|
)
|
|
$
|
17,980,689
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(9,258,647
|
)
|
|
$
|
(8,470,661
|
)
|
|
$
|
(7,031,512
|
)
|
Adjustment to reconcile net loss to net cash used in
|
|
|
|
|
|
|
||||||
operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
184,946
|
|
|
153,996
|
|
|
105,952
|
|
|||
Share-based compensation
|
|
122,134
|
|
|
218,294
|
|
|
237,822
|
|
|||
Gain on disposal of equipment
|
|
(941
|
)
|
|
(2,861
|
)
|
|
(1,912
|
)
|
|||
Non-cash interest expense
|
|
—
|
|
|
395,833
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Other receivables
|
|
(11,440
|
)
|
|
(121,640
|
)
|
|
(21,195
|
)
|
|||
Inventory
|
|
(169,991
|
)
|
|
—
|
|
|
—
|
|
|||
Prepaid expenses and other assets
|
|
(592,602
|
)
|
|
38,054
|
|
|
(12,421
|
)
|
|||
Accounts payable and accrued liabilities
|
|
625,763
|
|
|
340,092
|
|
|
(25,032
|
)
|
|||
Net cash used in operating activities
|
|
(9,100,778
|
)
|
|
(7,448,893
|
)
|
|
(6,748,298
|
)
|
|||
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
|
||||||
Purchase of property, plant and equipment
|
|
(18,893,264
|
)
|
|
(934,495
|
)
|
|
(74,113
|
)
|
|||
Deposits on equipment purchases
|
|
(153,663
|
)
|
|
(156,982
|
)
|
|
—
|
|
|||
Proceeds from sale of equipment
|
|
941
|
|
|
23,844
|
|
|
—
|
|
|||
Payment of patent costs
|
|
—
|
|
|
(5,664
|
)
|
|
(30,372
|
)
|
|||
Net cash used in investing activities
|
|
(19,045,986
|
)
|
|
(1,073,297
|
)
|
|
(104,485
|
)
|
|||
|
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
|
||||||
Proceeds from issuance of debt
|
|
256,807
|
|
|
547,142
|
|
|
44,004
|
|
|||
Repayment of term debt
|
|
(35,812
|
)
|
|
(6,268
|
)
|
|
—
|
|
|||
Proceeds from the issuance of convertible debt
|
|
—
|
|
|
10,000,000
|
|
|
—
|
|
|||
Proceeds from the issuance of common stock, net
|
|
24,989,257
|
|
|
—
|
|
|
3,000,000
|
|
|||
Proceeds from exercise of stock options
|
|
27,502
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
|
25,237,754
|
|
|
10,540,874
|
|
|
3,044,004
|
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
77,262
|
|
|
(7,496
|
)
|
|
(41,062
|
)
|
|||
Net change in cash and cash equivalents
|
|
(2,831,748
|
)
|
|
2,011,188
|
|
|
(3,849,841
|
)
|
|||
Cash and cash equivalents at beginning of period
|
|
3,324,609
|
|
|
1,313,421
|
|
|
5,163,262
|
|
|||
Cash and cash equivalents at the end of period
|
|
$
|
492,861
|
|
|
$
|
3,324,609
|
|
|
$
|
1,313,421
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information and non-cash transactions:
|
|
|
|
|
|
|
||||||
Interest paid in cash
|
|
$
|
21,537
|
|
|
$
|
6,721
|
|
|
$
|
10
|
|
Conversion of convertible debt and accrued interest to common stock
|
|
$
|
—
|
|
|
$
|
10,395,833
|
|
|
$
|
—
|
|
Property and equipment included in accounts payable and accrued liabilities
|
|
$
|
1,036,240
|
|
|
$
|
50,132
|
|
|
$
|
—
|
|
Building
|
25 years
|
Equipment
|
7 - 10 years
|
Office furniture and equipment
|
3 years
|
Leasehold improvements
|
shorter of asset life or lease term
|
Vehicles
|
3 years
|
|
|
2017
|
|
2016
|
||||
Feed
|
|
$
|
60,161
|
|
|
—
|
|
|
Eggs
|
|
73,967
|
|
|
—
|
|
||
Fish in process
|
|
38,235
|
|
|
—
|
|
||
Total inventory
|
|
$
|
172,363
|
|
|
$
|
—
|
|
|
|
2017
|
|
2016
|
||||
Land
|
|
$
|
676,083
|
|
|
$
|
157,107
|
|
Building and improvements
|
|
9,187,160
|
|
|
1,436,814
|
|
||
Construction in process
|
|
5,119,961
|
|
|
277,352
|
|
||
Equipment
|
|
8,211,510
|
|
|
1,037,549
|
|
||
Office furniture and equipment
|
|
136,091
|
|
|
78,780
|
|
||
Vehicles
|
|
29,135
|
|
|
27,201
|
|
||
Total property and equipment
|
|
$
|
23,359,940
|
|
|
$
|
3,014,803
|
|
Less accumulated depreciation and amortization
|
|
(1,556,964
|
)
|
|
(1,291,096
|
)
|
||
Property, plant and equipment, net
|
|
$
|
21,802,976
|
|
|
$
|
1,723,707
|
|
|
|
2017
|
|
2016
|
||||
Prepaid insurance
|
|
$
|
84,801
|
|
|
$
|
35,544
|
|
Prepaid supplies
|
|
33,132
|
|
|
17,066
|
|
||
Prepaid professional services
|
|
16,059
|
|
|
17,533
|
|
||
Prepaid rent and lease deposits
|
|
5,852
|
|
|
2,840
|
|
||
Deferred costs of public offering
|
|
387,478
|
|
|
—
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
527,322
|
|
|
$
|
72,983
|
|
|
|
2017
|
|
2016
|
||||
Accounts payable
|
|
$
|
1,089,919
|
|
|
$
|
161,768
|
|
Accrued payroll including vacation
|
|
364,368
|
|
|
242,436
|
|
||
Accrued professional fees
|
|
438,378
|
|
|
500,430
|
|
||
Accrued research and development costs
|
|
4,800
|
|
|
87,751
|
|
||
Accrued franchise and excise taxes
|
|
240,880
|
|
|
22,994
|
|
||
Accrued construction costs
|
|
509,950
|
|
|
—
|
|
||
Accrued other
|
|
18,560
|
|
|
2,472
|
|
||
Accounts payable and accrued liabilities
|
|
$
|
2,666,855
|
|
|
$
|
1,017,851
|
|
|
|
Interest
rate |
|
Monthly
repayment |
|
Maturity
date |
|
2017
|
|
2016
|
||||
ACOA AIF grant (C$2,871,919)
|
|
0%
|
|
Royalties
|
|
-
|
|
$
|
2,287,771
|
|
|
$
|
2,135,846
|
|
ACOA term loan (C$337,000)
|
|
0%
|
|
C$3,120
|
|
June 2026
|
|
251,056
|
|
|
—
|
|
||
PEI Finance term loan (C$717,093)
|
|
4%
|
|
C$4,333
|
|
July 2021
|
|
545,387
|
|
|
527,082
|
|
||
Total debt
|
|
|
|
|
|
|
|
$
|
3,084,214
|
|
|
$
|
2,662,928
|
|
less: current portion
|
|
|
|
|
|
|
|
(49,794
|
)
|
|
(17,913
|
)
|
||
Long-term debt
|
|
|
|
|
|
|
|
$
|
3,034,420
|
|
|
$
|
2,645,015
|
|
Year
|
|
AIF
|
|
ACOA
|
|
FPEI
|
|
Total
|
|
||||||||
2018
|
|
$
|
—
|
|
|
$
|
29,825
|
|
|
$
|
19,969
|
|
|
$
|
49,794
|
|
|
2019
|
|
—
|
|
|
29,825
|
|
|
20,783
|
|
|
50,608
|
|
|
||||
2020
|
|
—
|
|
|
29,825
|
|
|
21,628
|
|
|
51,453
|
|
|
||||
2021
|
|
—
|
|
|
29,825
|
|
|
483,007
|
|
|
512,832
|
|
|
||||
2022
|
|
—
|
|
|
29,825
|
|
|
—
|
|
|
29,825
|
|
|
||||
Thereafter
|
|
2,287,771
|
|
|
101,931
|
|
|
—
|
|
|
2,389,702
|
|
|
||||
Total
|
|
$
|
2,287,771
|
|
|
$
|
251,056
|
|
|
$
|
545,387
|
|
|
$
|
3,084,214
|
|
|
|
|
Shares
|
|
Weighted
average grant
date fair value
|
|||
Unvested at December 31, 2016
|
|
4,169
|
|
|
$
|
7.72
|
|
Granted
|
|
1,751
|
|
|
14.20
|
|
|
Vested
|
|
(3,223
|
)
|
|
8.19
|
|
|
Unvested at December 31, 2017
|
|
2,697
|
|
|
$
|
11.37
|
|
|
|
Number of
options
|
|
Weighted
average
exercise price
|
|||
Outstanding at December 31, 2016
|
|
185,591
|
|
|
$
|
7.89
|
|
Issued
|
|
52,500
|
|
|
14.20
|
|
|
Exercised
|
|
(8,334
|
)
|
|
3.30
|
|
|
Expired
|
|
(2,554
|
)
|
|
19.50
|
|
|
Outstanding at December 31, 2017
|
|
227,203
|
|
|
$
|
9.39
|
|
Exercisable at December 31, 2017
|
|
192,748
|
|
|
$
|
8.55
|
|
Weighted
average exercise
price of outstanding
options
|
|
Number of
options
outstanding
|
|
Weighted
average remaining
estimated life
(in years)
|
|
Number of
options
exercisable
|
|
Weighted average
price of outstanding
and exercisable
options
|
||
$3.30 - $5.70
|
|
90,473
|
|
|
2.2
|
|
90,395
|
|
|
|
$6.90 - $9.60
|
|
53,175
|
|
|
4.7
|
|
52,713
|
|
|
|
$9.90 - $10.80
|
|
4,800
|
|
|
5.2
|
|
4,800
|
|
|
|
$14.20 - $23.40
|
|
78,755
|
|
|
8.2
|
|
44,840
|
|
|
|
|
|
227,203
|
|
|
|
|
192,748
|
|
|
$8.55
|
|
|
2017
|
|
2016
|
|
2015
|
Expected volatility
|
|
78%
|
|
53%
|
|
88%
|
Risk free interest rate
|
|
1.80%
|
|
1.31%
|
|
1.54%
|
Expected dividend yield
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
Expected life (in years)
|
|
5
|
|
5
|
|
5
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Research and development
|
|
$
|
3,168
|
|
|
$
|
2,115
|
|
|
$
|
6,699
|
|
Sales and marketing
|
|
9,315
|
|
|
65,517
|
|
|
75,843
|
|
|||
General and administrative
|
|
109,651
|
|
|
150,662
|
|
|
155,280
|
|
|||
Total share-based compensation
|
|
$
|
122,134
|
|
|
$
|
218,294
|
|
|
$
|
237,822
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
|
$
|
(6,526,706
|
)
|
|
$
|
(5,950,862
|
)
|
|
$
|
(4,780,607
|
)
|
Foreign
|
|
(2,731,941
|
)
|
|
(2,519,799
|
)
|
|
(2,250,905
|
)
|
|||
Loss before income taxes
|
|
$
|
(9,258,647
|
)
|
|
$
|
(8,470,661
|
)
|
|
$
|
(7,031,512
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax benefit
|
|
$
|
(3,147,940
|
)
|
|
$
|
(2,880,025
|
)
|
|
$
|
(2,390,714
|
)
|
State and provincial income tax, net of federal benefit
|
|
(678,438
|
)
|
|
(604,354
|
)
|
|
(47,976
|
)
|
|||
Permanent differences
|
|
(2,923
|
)
|
|
234,247
|
|
|
158,207
|
|
|||
US-Foreign rate differential
|
|
371,551
|
|
|
359,729
|
|
|
(165,029
|
)
|
|||
Other, net
|
|
(98,947
|
)
|
|
73,220
|
|
|
(11,125
|
)
|
|||
Effect of tax reform
|
|
3,687,844
|
|
|
—
|
|
|
—
|
|
|||
|
|
131,147
|
|
|
(2,817,183
|
)
|
|
(2,456,637
|
)
|
|||
Change in valuation allowance
|
|
(131,147
|
)
|
|
2,817,183
|
|
|
2,456,637
|
|
|||
Total income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
12,411,425
|
|
|
$
|
12,844,999
|
|
Foreign research and development tax credit carryforwards
|
|
2,832,340
|
|
|
2,428,094
|
|
||
Property and equipment
|
|
482,161
|
|
|
412,283
|
|
||
Accounts receivable and other
|
|
270
|
|
|
400
|
|
||
Stock options
|
|
40,071
|
|
|
50,580
|
|
||
Accrued vacation
|
|
26,054
|
|
|
34,107
|
|
||
Accrued compensation
|
|
58,131
|
|
|
—
|
|
||
Intangible assets
|
|
(110,899
|
)
|
|
(162,057
|
)
|
||
Total deferred tax assets
|
|
$
|
15,739,553
|
|
|
$
|
15,608,406
|
|
Valuation allowance
|
|
$
|
(15,739,553
|
)
|
|
$
|
(15,608,406
|
)
|
Net deferred tax assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Total
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
|
More than
5 years |
||||||||||
Maynard office lease
|
|
333
|
|
|
54
|
|
|
128
|
|
|
134
|
|
|
17
|
|
|||||
Panama site lease
|
|
60
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
393
|
|
|
$
|
114
|
|
|
$
|
128
|
|
|
$
|
134
|
|
|
$
|
17
|
|
|
|
Three Months Ended 2017
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
53,278
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating loss
|
|
(2,049,098
|
)
|
|
(2,087,074
|
)
|
|
(2,439,230
|
)
|
|
(2,655,756
|
)
|
||||
Net loss
|
|
(2,055,743
|
)
|
|
(2,093,436
|
)
|
|
(2,446,219
|
)
|
|
(2,663,249
|
)
|
||||
Basic and diluted net loss per share
|
|
$
|
(0.24
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.30
|
)
|
|
|
Three Months Ended 2016
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating loss
|
|
(1,796,159
|
)
|
|
(1,979,021
|
)
|
|
(2,008,917
|
)
|
|
(2,280,957
|
)
|
||||
Net loss
|
|
(1,818,977
|
)
|
|
(2,063,836
|
)
|
|
(2,141,826
|
)
|
|
(2,446,022
|
)
|
||||
Basic and diluted net loss per share
|
|
$
|
(0.35
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.41
|
)
|
|
$
|
(0.45
|
)
|
Name
|
|
Jurisdiction of Organization
|
AquaBounty Brasil Participações Ltda.
|
|
Brazil
|
AQUA Bounty Canada Inc.
|
|
Canada
|
Aqua Bounty Farms Chile Limitada
|
|
Chile
|
AquaBounty Farms, Inc.
|
|
Delaware
|
AquaBounty Farms Indiana LLC
|
|
Delaware
|
AquaBounty Panama, S. de R.L.
|
|
Panama
|
Date:
|
March 8, 2018
|
/s/ Ronald L. Stotish
|
|
|
Chief Executive Officer
|
Date:
|
March 8, 2018
|
/s/ David A. Frank
|
|
|
Chief Financial Officer
|
/s/ Ronald L. Stotish
|
|
/s/ David A. Frank
|
Ronald L. Stotish
Chief Executive Officer
|
|
David A. Frank
Chief Financial Officer
|