AquaBounty Technologies(AQB) - 2024 Q3 - Quarterly Report

Financial Performance - Product revenue for the three months ended September 30, 2024, was $48,000, a decrease of 93$733,000 in the same period in 2023[87]. - The company recorded a net loss of $3.4 million for the three months ended September 30, 2024, a 45$6.1 million in the same period in 2023[87]. - Total product revenue for the nine months ended September 30, 2024, was $705,000, a decrease of 63$1.9 million in the same period in 2023[94]. - The company reported a net loss of $65.1 million for the nine months ended September 30, 2024, which was partially offset by non-cash charges and working capital sources[101]. Asset Management - Long-lived asset impairment charges totaled$48.7 million for the nine months ended September 30, 2024, primarily related to the Indiana farm and certain equipment assets of the Ohio farm[98]. - Cash flows from investing activities included $2.7 million for property, plant, and equipment purchases and$9.5 million received from the sale of the Indiana farm[103]. - The company plans to sell its Rollo Bay farm and additional equipment assets to increase cash liquidity and fund ongoing operations[108]. Operating Expenses - Research and development expenses for the three months ended September 30, 2024, were $52,000, down 72$184,000 in the same period in 2023[87]. - General and administrative expenses for the three months ended September 30, 2024, were $1.9 million, a decrease of 19$2.3 million in the same period in 2023[87]. Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2024, was $12.7 million, compared to$18.5 million for the same period in 2023, reflecting a 31% decrease[100]. - As of September 30, 2024, the company had $500 thousand in cash and cash equivalents, raising concerns about its ability to continue as a going concern[105]. - The company may finance its cash needs through sales of non-core assets, equity offerings, and debt financings, which could dilute existing shareholders' interests[109]. Financing Activities - Financing activities resulted in$6.8 million from new debt and $9.5 million in term debt repayments during the nine months ended September 30, 2024[104]. - Interest-bearing debt decreased from$4.6 million as of December 31, 2023, to $1.8 million as of September 30, 2024, with all debt at fixed rates[117]. Strategic Initiatives - The company is seeking new financing options to provide liquidity for working capital and to fund the completion of its farm in Pioneer, Ohio[76]. - The company has engaged an investment bank to explore a range of funding and strategic alternatives, including the sale of non-core assets[76]. Market Position - The company is classified as a "smaller reporting company," with a market value of stock held by non-affiliates below$700 million and annual revenue under $100 million[113]. Operational Challenges - Inflation has led to increased costs for farming supplies and direct operating expenses, which are expected to negatively impact results in the near term[77]. - The company has incurred cumulative net losses and negative cash flows from operating activities since inception, which are expected to continue for the foreseeable future[105].