UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) | February 3, 2020 |
AquaBounty Technologies, Inc. |
(Exact name of registrant as specified in its charter) |
Delaware | 001-36426 | 04-3156167 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2 Mill & Main Place, Suite 395, Maynard, Massachusetts | 01754 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | 978-648-6000 |
(Former name or former address, if changed since last report.) |
Title of each class | Trading Symbol(s) | Name of exchange on which registered |
Common Stock, par value $0.001 per share | AQB | The NASDAQ Stock Market LLC |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 7.01 Regulation FD Disclosure.
Starting February 3, 2020, AquaBounty Technologies, Inc. management will make presentations to prospective investors in connection with its recently announced proposed underwritten public offering of its common stock. A copy of the presentation is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information included in this Current Report on Form 8-K pursuant to Item 7.01, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AquaBounty Technologies, Inc. | ||
(Registrant) | ||
February 3, 2020 | /s/ David A. Frank | |
David A. Frank | ||
Chief Financial Officer | ||
INVESTOR PRESENTATION Sylvia Wulf, President and CEO David Frank, CFO and Treasurer AquaBounty Technologies, Inc. February 2020 AquaBounty.com 1
Forward-Looking Statements Safe Harbor Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this presentation are forward-looking statements, including, but not limited to, statements regarding the size and timing of the offering, the economic viability of land-based production facilities, the economic and operational benefits of AquAdvantage® salmon (“AAS”); and the potential for increases in EBITDA and the profitability of AquaBounty; the timing of future harvests; projected growth in seafood consumption and market size, expansion of the aquaculture industry, and increasing demand for salmon; continuing supply constraints and their impact on pricing; the impacts of future environmental conditions; market interest in land-based aquaculture; the anticipated benefits of AAS and land-based production to consumers and the environment; non-exposure to pathogens, parasites, or environmental contaminants; continued operational performance against targets; the potential for consumer acceptance of AAS; AquaBounty’s commercial strategy, including demonstration of commercial viability, successful positioning and messaging of AAS, the establishment and types of sales channels, agreements with distributors and industrial producers, and progress against commercial launch timelines; the potential for the development of additional products, product traits, operational efficiencies, nutritional enhancements, and production sites; and the completion of field trials, approval of AAS, and potential relationships with local partners in other markets. Although management believes that the plans, objectives, and expectations reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties, and actual future results may be materially different from the plans, objectives, and expectations expressed in this presentation. These risks and uncertainties include, but are not limited to: (i) our limited operating history and track record of operating losses; (ii) our cash position and ability to raise additional capital to finance our activities; (iii)the anticipated benefits and characteristics of AAS; (iv) the ability to secure any necessary regulatory approvals to commercialize any products; (v) our ability to adapt to changes in laws or regulations and policies; (vi) the uncertainty of achieving the business plan, future revenue, and operating results; (vii) developments concerning our research projects; (viii) our ability to successfully enter new markets or develop additional products; (ix) competition from existing technologies and products or new technologies and products that may emerge; (x) actual or anticipated variations in our operating results; (xi) market conditions in our industry; (xii) our ability to protect our intellectual property and other proprietary rights and technologies; (xiii) the rate and degree of market acceptance of any products developed through the application of bioengineering, including bioengineered fish; (xiv) our ability to retain and recruit key personnel; (xv) the success of any of our future acquisitions or investments; (xvi) international business risks and exchange rate fluctuations; (xvii) the possible volatility of our stock price; and (xviii) our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing. We caution you that the foregoing list may not contain all of the risks to which the forward- looking statements made in this presentation are subject. For a discussion of other risks and uncertainties, and other important factors, any of which could cause our actual results to differ from those contained in the forward-looking statements, see AquaBounty’s public filings with the Securities and Exchange Commission (“SEC”), available on the “Investors” section of our website at www.aquabounty.com and on the SEC’s website at www.sec.gov. Forward-looking statements are not promises or guarantees of future performance, and we may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments that we may make. All information in this presentation is as of the date of its release, and AquaBounty undertakes no duty to update or revise this information unless required by law. AquaBounty.com 2
Legal Matters Legal Matters Statement We have filed a registration statement on Form S-1 (including a prospectus) with the SEC for the offering to which this communication relates. Such registration statement has not been declared effective by the SEC as of the date hereof. Before you invest, you should read the prospectus in that registration statement and other documents we have filed with the SEC for more complete information about us and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, the underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by contacting Lake Street Capital Markets, LLC, Attn: Syndicate Department, 920 Second Avenue South, Suite 700, Minneapolis, Minnesota 55402; by calling 612-326-1305; or by emailing syndicate@lakestreetcm.com. This presentation shall not constitute an offer to sell or a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale is not permitted. AquaBounty.com 3
Offering Summary Issuer: AquaBounty Technologies, Inc. Ticker Symbol: Nasdaq: AQB Offering: Publicly Marketed Equity Offering Size: Approximately $10 million plus 15% overallotment (100% primary) Securities: Shares of Common Stock (fully registered) Market Cap.:* $45.7 million Shares Out./Share Approximately 21.6 million of common stock outstanding; $2.11 price per Price:* share; excludes approximately 1.7 million warrants with avg. strike price of $3.25 per share and 0.4 million options with avg. strike price of $5.99 per share Avg. Daily Vol. (30 Day)*: Approximately 60k shares/day Use of Proceeds: Capital projects and working capital for Indiana and Rollo Bay farms, and other general corporate purposes Anticipated Pricing: Week of February 10, 2020 Sole Underwriter: Lake Street Capital Markets, LLC *As of January 29, 2020 AquaBounty.com 4
AquaBounty: Leaders in Aquaculture and Biotechnology Company Profile Key Milestones Headquarters: Maynard, MA Total Employees: 61 1989 – First AquAdvantage Salmon “AAS” line RAS Farms: Albany, Indiana and Prince created Edward Island, Canada 1995 – Regulatory approval process begins for AAS . Pioneers in aquaculture, using new technology in new ways to 2015 – U.S. Food and Drug Administration deliver game changing solutions to global problems. Committed (“FDA”) approves AAS for to feeding the world with land-based salmon farmed efficiently, consumption in the US sustainably and profitably. 2016 – Health Canada approves AAS for . Blazed the trail for genetically engineered animal protein; consumption in Canada overcoming political and perceptual hurdles. Significantly increasing profitability in land-based Recirculating Aquaculture 2017 – AquaBounty purchases Indiana Farm Systems (“RAS”). 2018 – Conventional salmon eggs enter . Leveraging 25 years of operational experience with RAS to Indiana Farm Hatchery produce efficiently and ensure success of new farming methods. 2019 –AAS eggs enter Indiana Farm Hatchery AquaBounty.com 5
Investment Highlights Large Growing Global Salmon Market . Global Atlantic salmon market totals $16.7B¹ and the U.S. salmon market is the largest market . Fresh salmon demand outstrips current wild and farmed supply AquaBounty Technologies, Inc. . Global population growth expected to double protein demand by 2050² Nasdaq: AQB Expertise and Technology Share Price* $2.11 . Pioneering disruptive technologies in the protein space and leading advances in biotechnology . First genetically engineered animal protein approved for human consumption by FDA and Health Canada Market Cap.* $45.7m . Proven operational experience in land-based RAS operations for 25 years Sept YTD 2019 Revenue $140k . Introduced one Chinook gene into Atlantic Salmon 30 years ago creating AquAdvantage Salmon³ – 14 generations have been conventionally spawned and grown Shares Outstanding* 21.6m Attractive Business Model and Unit Economics Float* 10.5m . AAS grow 1.7X faster and use 25% less feed than conventional salmon⁴ Insiders and 10% Holders* 45% . Target EBITDA margins 2X higher than conventional salmon in land-based farms⁵ . Attractive ROI on commercialization Headquarters Maynard, MA Commercialization and First Harvest On Track for 2H 2020 . Initial conventional harvest expected in Q2 2020, AAS harvest expected in Q4 2020 *Data as of January 29, 2020 . Salmon continues to show growth rates at or ahead of target Strong Management Team . CEO brings strong foodservice, food supply, and food production experience . Team has significant operating experience in aquaculture and biotechnology Source 1: FAO Statistical Data Search (December 2019) Source 4: Effects of combined ‘all-fish’ growth hormone transgenics and Source 2: Westhoek et al., The Protein Puzzle (2011) – United Nations triploidy on growth and nutrient utilization of Atlantic salmon (Salmo salar L.) Source 3: U.S. FDA AquAdvantage Salmon Fact Sheet, https://www.fda.gov/animal- fed a practical grower diet of known composition – Elsevier, May 24, 2013 AquaBounty.com veterinary/animals-intentional-genomic-alterations/aquadvantage-salmon-fact-sheet Source 5: See Slide 26 6
Experienced Management Team Sylvia Wulf Alejandro Rojas Angela Olsen President and CEO Chief Operating Officer General Counsel Ms. Wulf has a reputation Dr. Rojas is a renowned Ms. Olsen is an as a proven leader and expert in salmon farming. experienced legal advisor accomplished executive His areas of expertise driving key business driving both growth and include technical and outcomes through her improved performance. economic analysis for M&A extensive US and global Her diverse career activities, new species expertise in commercial encompasses executive development and consulting law, complex legal level positions in General on fish production, aquatic regulatory matters and Management, Sales, health, environment and litigation relating to food, Marketing and M&A in a biosecurity programs. agriculture and variety of industries. biotechnology. . David Frank David Melbourne Mark Walton, Ph.D. CFO and Treasurer Chief Commercial Officer Chief Technology Officer Mr. Frank has extensive Mr. Melbourne is a 30-year Dr. Walton has expertise in experience working with early veteran of the CPG genetics and regulatory stage companies, both public industry, spending the last affairs. He is deeply and private and has 25 years with a focus on involved in the on-going completed financing seafood. He has expertise discussion between transactions for initial start-up, in Marketing, Strategy, industry and governments growth and M&A. He brings a Corporate on the regulation of strategic outlook to company Communications, Industry genetically engineered growth and a hands-on Relations and Government animal proteins. approach to cash Affairs. management. AquaBounty.com 7
Current Market Environment AquaBounty.com 8
Population Growing. Demand Increasing. . Global population projected at 9 billion people by 2050 - 28% growth in 30 years* . An increasing middle class in geographies with significant growth creates a demand for protein . Current seafood supply cannot keep up with increasing demand . New technologies will be imperative to address how to nutritionally feed the world Remarkable increases in global *World Populations Prospects 2019 – United Nations AquaBountypopulation.com require remarkable solutions 9
What worked before won’t work in the future! . 60% decline in the size of populations of mammals, birds, fish, reptiles, and amphibians in 40 years, according to World Wildlife Fund’s Living Planet Report 2018 . 90% of world's fisheries are fully fished or overfished, according to FAO’s The State of World Fisheries and Aquaculture 2016 . No further pressure can be placed on wild fisheries . Critical impacts on water and energy usage, and the need to reduce greenhouse gas emissions Source: Living Planet Report 2018 . Rising ocean temperatures . Viable sea cage farming has limitations o Sea lice o Algae bloom o Ocean contamination – micro plastics . We believe there is a better way! AquaBounty.com 10
Overall Protein Demand and Consumption to Double by 2050 . Protein is at the heart of the global food Seafood is more efficient to grow than issue and despite supply constraints, other animal proteins due to a more protein consumption is predicted to favorable Feed Conversion Ratio (“FCR”) double by 2050, with marine-based proteins gaining a growing market share . Currently providing 70% of seafood supply, Aquaculture must double its output in 30 years to fill the seafood gap and meet consumer demand for consistent, affordable and nutritious protein solutions 1:1 2:1 3:1 6:1 Source: FCR Data - Mowi Handbook 2019 Note: FCR is important as it relates to Greenhouse Gas Emissions AquaBounty.com 11
Salmon is a Global and Compelling Market within Aquaculture . Salmon is a rich source of protein and provides essential amino acids and critical nutrients including Omega-3 EPA/DHA . Helps eliminate skin diseases . Strengthens the immune system . Provides long-term energy . Helps in the building/repairing of body tissues and protects the body from infections . Aids in the production of hemoglobin . 2-3 servings each week provide the nutrients pregnant mothers and baby need for a healthy pregnancy and for baby’s optimal development Salmon is Healthy, Nutritious and Supports Wellness Sources: Salmon Nutrition: Everything You Need To Know About Salmon – NFI, July 1, 2019. A Guide To Eating Seafood During Pregnancy – Dish On Fish, April 25, 2019 AquaBounty.com 12
Atlantic Salmon – Large Market With Inefficient Supply Chain Land Based RAS Farming Has Potential to Disrupt The Industry 3-6 Days . Inefficient supply chain – current NORWAY, FAROE IS. Kt sea-cage operations highly ICELAND Harvest 1,403 dependent on-air freight RUSSIA kt Market 54 NORTH AMERICA kt Harvest 34 . A domestic imperative to meet Harvest 190 Market 130 EU kt Market 595 increasing U.S. demand Harvest 240 ASIA kt Market 1,142 Harvest 30 . Supply is constrained in production Market 615 5-8 Days locations for environmental and regulatory issues related to the LATIN AMERICA kt current production methods Harvest 930 Market 160 Source: Kontali Salmon World 2019 OCEANIA kt Harvest 83 = High freight cost, large carbon footprint, reduced product shelf life Market 75 Global Atlantic Salmon Market = Source 1: Kontali Salmon World 2019 2.4 million metric tons¹ worth $16.7 billion² Source 2: FAO Statistical Data Search (December 2019) AquaBounty.com 13
Atlantic Salmon Competitive Landscape . Salmon farming competition is primarily in sea cages and land-based farming . Growing momentum in land-based salmon farming projects has the potential to disrupt the industry U.S. RAS Farms In Production International Sea-Cage Operations Indiana – 1,200 mt, First Harvest 2020 MOWI 417,000 mt ATLANTIC SAPPHIRE Florida – 10,000 mt, First Harvest 2020 CERMAQ 192,000 mt U.S. RAS Farms Announced – Plan and Development AGROSUPER 188,000 mt NORDIC AQUAFARMS Maine – 33,000 mt LEROY 180,000 mt California – 27,000 mt WHOLE OCEANS Maine – 25,000 mt SALMAR 158,000 mt AQUABANQ Maine – 10,000 mt Source: IntraFish Land-Based Salmon Farming Report 2019 Source: Company data and websites; Kontali Salmon World 2019 AquaBounty.com 14
The AquaBounty Solution AquaBounty.com 15
We embrace a three-step solution to addressing the Seafood Gap. Rapidly accelerate salmon production by growing salmon more efficiently, more quickly and more sustainably. Use genetically engineered Shift salmon production Use fresh-water tanks and salmon for faster growth to to land-based technology to nurture the fish harvest weight (> 4 kg) resulting aquaculture systems in a safe, sustainable way in 1.7X increase in harvest “Biotechnology is a fundamental necessity for the future of the global food system. Leading with a sense of urgency is critical and the time for action is now!” – Sylvia Wulf CEO, AquaBounty AquaBounty.com 16
Better for the Environment. Better for the Fish. Enhanced Benefits of Controlled Operations Compared To Sea-Cage Farming Improved Fish Survival Faster growth during most vulnerable stages of fish lifecycle Lower Carbon Footprint Less Feed Used Greater than 95% water recycled 25% improvement in Feed and reduced transportation to Conversion Rate (“FCR”)* consumption Aquaponics / Hydroponics Biosecurity Efficient use of resources and waste Designed to prevent escapement utilization as agriculture fertilizer and impacts on broader ecosystem *Effects of combined ‘all-fish’ growth hormone transgenics and triploidy on growth and nutrient utilization of Atlantic salmon (Salmo salar L.) fed a No Chemicals or Antibiotics practical grower diet of known composition – Elsevier, May 24, 2013 Reduced risk of infections commonly seen in sea-cage farming AquaBounty.com 17
Operational Expertise is a Competitive Strength and Differentiator Recirculating Aquaculture Systems (“RAS”) are more timely and relevant than ever before . Land-based RAS salmon farming confines the fish to indoor tanks inside a large building, eliminating interactions between the farmed fish and the external environment. . Land-based salmon farming eliminates many of the environmental problems associated with sea-cage farms. . System enables optimized conditions with total control of the water, moving in and out, while recycling greater than 95% of the water used. . Biosecurity protects against exposure to disease and parasites and the need for antibiotics, medications or chemicals used in sea-cages. Source: Water Solutions for the Aquaculture Industry – Veolia Water Technologies AquaBounty.com 18
Uniquely Positioned in Aquaculture . AquaBounty is a thought leader in aquaculture . At the center of our sustainable farming production are two breakthrough innovations: modern genetics and operational expertise in RAS production systems . A pioneer with 25 years of operational expertise . Revolutionized RAS utilization with operational expertise and genetic engineering . Championing efforts for a consistent domestic supply to lessen dependence on imports . Strategically placing production close to consumption with RAS AquaBounty.com 19
Biomass Growth KPI’s Exceeding Expectations . AquaBounty Conventional and Farm Fish Type Status Lbs Weight Biomass Harvest AquAdvantage Salmon show growth rates Indiana Conventional Growers 120,500 1,200 (g) 152 T Q3 2020 on or ahead of target Indiana AAS Salmon Fry 54,750 140 (g) 7.7 T Q4 2020 Eyed 101,000 0.42 (g) 0.04 Q2 2021 . Delivering promising results in a less than Eggs optimal farm design Rollo AAS Salmon Fry 19,000 69 (g) 1.3 T Q1 2021 Bay Results: December 2019 . Farm teams staffed with excellent, GROWTH PERFORMANCE experienced and committed talent AquAdvantage Salmon vs. Conventional Atlantic Salmon . Feed Conversion Rate results AquAdvantage outperforming goals at 0.77 (target set to Salmon be below 1.0) Conventional . No other salmon farming operation boasts Atlantic Salmon our experience and measured results Source: AquaBounty Technologies, Inc. Data AquaBounty.com 20
Pillars of Innovation Will Deliver Meaningful Solutions For Decades Salmon Genetics Additional RAS Technology Nutrition and Species Enhancements Disease Improving and delivering Land-based aquaculture Better feed formulations o Expand product offerings o o enhanced salmon traits: with new marine species o Maximize system o Sustainability of feed Selective breeding performance o o Improve RAS performance Gene editing Biofilter optimization o o o Enhanced performance o Accelerated trait delivery o Biomass optimization and resilience o Energy efficiency o Nutritional profile . Biotechnology leader providing molecular solutions that address problems and opportunities for the global aquaculture industry . World Class operator of land-based Recirculating Aquaculture Systems . Committed to the excellent husbandry and nutrition of fish AquaBounty.com 21
Anticipated Timeline and 2020 Commercial Launch Q1 2020 Q2 2020 Q3 2020 Q4 2020 2021+ . Complete equity . Continue conversations . Potential processors . First harvest of AAS in . Significantly scale financing with potential and customer Indiana expected Q4 operations . Communications and processors and announcements 2020 . Expansion of existing marketing agency customers . Official launch of . Additional potential production capacity finalizing brand . Finalize processors and marketing and customer/distribution . New large plant strategy, positioning, key customers communications plan agreements buildout in U.S, Canada. messaging & GTM plans . Host political and media . Extensive media . Continued marketing and internationally . Conversations with relations “open house” pitching and and communications utilizing project-based potential processors at Albany Farm stakeholder outreach initiatives finance and potential and customers . Digital marketing . Media and extended JV partners underway “teaser” messaging stakeholder . Activation of . First conventional engagement comprehensive salmon harvest in marketing and Indiana expected Q2 communications 2020 initiatives Capital raise is expected to fully fund us through initial commercialization and position us for larger scale production. AquaBounty.com 22
Exploring North American Farm Expansion to Scale Operations Ontario Canada New Farm Selection Criteria . Availability of adequate, clean water supply . Low electricity rates . Location close to consumption/major population centers . Access to available and quality labor pools . Supportive political environment Site Selection Process Targeting: Arkansas, Indiana, Iowa, Nebraska, North Carolina, Ontario, South Dakota, Texas, Utah, Virginia AquaBounty.com 23
Negotiations Underway With Global Expansion Partners Israel • Conversations continue Strong interest from Israel with expansion partners in South America, Asia and the Middle East • Targeting high volume/strategic Net Import markets to include: China o China: 198,000 mt Approved for field trials in 2018 o Brazil: 110,000 mt o Israel: 40,000 mt o Argentina: 11,000 mt • Brazil trials completed in January 2020 Brazil & Argentina Approved for field trials in Brazil (2016) and Argentina (2015) AquaBounty.com 24
Key Financial Metrics AquaBounty.com 25
AquAdvantage Salmon Economics vs. Conventional Salmon Throughput increase leverages site infrastructure Improved feed conversion by ~25% reduces feed costs Faster growth to harvest weight (> 4kg) results in 1.7X increase in harvest Feed is the biggest AquAdvantage production cost EBITDA 18-20 mo’s vs 28-36 mo’s Conventional 2X Farm EBITDA $¹ 70% Production Advantage Conventional salmon in AquAdvantage Salmon in land-based RAS EBITDA Same sized facility land-based RAS EBITDA Faster growth to harvest accelerates returns on investment in farm operations Source 1: Management estimates based on current assumptions. EBITDA is defined as farm operation net income (loss), plus depreciation expense, other income/expense, including interest expense and interest income, and the provision for income taxes. AquaBounty.com 26
Profitable at Scale with both Conventional and AquAdvantage Salmon Conventional AquAdvantage Conventional and AquAdvantage Both Profitable . Precision farming in conjunction with our technical points of Annual output 5,000 mt 8,550 mt difference ensure consistency in supply and cost Annual $34m - $37m $59m - $64m . Biosecurity – protects from exposure to disease and parasites revenue* . 100% grown, harvested and processed close to consumption Contribution 27% - 31% 37% - 40% margin % . A fresher product to market with significant reduction in transportation costs and carbon emissions EBITDA $12m - $15m $25m - $30m Payback Period 8-10 Years 4-5 Years AquAdvantage Accelerates ROI . AAS delivers EBITDA at 2X vs. conventional RAS salmon Source: AquaBounty Technologies, Inc. Data . GE benefits vs. conventional salmon reflect key advantages: The data illustrates the financial impact of building a facility for Conventional salmon production but producing AAS salmon instead. o Reduced time to harvest, from 28 months to 18 months for *Revenue assumes commodity pricing, 60% biomass yield at full production AAS, results in 70% more farm-gate weight at harvest per year o Improved feed conversion reduces feed costs by ~25%... the largest single component of RAS production expenses o Increased production levels result in operating leverage for farm labor and oxygen expenses Both our conventional and AAS salmon will be offered at commodity pricing AquaBounty.com 27
Recent Capitalization Data Balance Sheet Data ($ 000's) 9/30/2019 Cash & Equivalents $6,426 Total Assets $32,959 Debt $4,547 Stockholders’ Equity $26,880 Market Cap $54,013 Enterprise Value $52,134 Cash & equivalents at December 31, 2019 = $2.8m Shares outstanding at January 29, 2020 = 21.6m Share price as of January 29, 2020 = $2.11 Source: AquaBounty Technologies, Inc. Data AquaBounty.com 28
Current and Long-Term Growth Targets . Production output growth Production Output (mt) target = 50,000 mt . Assumes 4 to 5 new farms 51 44 . Cost per farm estimated at $75 - $100 million each 34 for construction . Contribution margin % per 24 farm of 37% - 40% 14 . Payback period per farm of 4–5 years 1 1 1 4 2020 2021 2022 2023 2024 2025 2026 2027 2028 Source: AquaBounty Technologies, Inc. Data AquaBounty.com 29
Summary Large Growing Global Salmon Market Expertise and Technology Attractive Business Model and Unit Economics Commercialization and First Harvests on Track for 2H 2020 Strong Management Team AquaBounty.com 30
Let’s Have a Conversation AquaBounty uses next-generation land-based aquaculture technology that supports ocean conservation and provides consumers with regional access to nutritious, fresh and affordable salmon with no added antibiotics. Sole Underwriter AquaBounty Lake Street Capital Markets, LLC David A. Frank 920 2nd Ave S Chief Financial Officer Ste 700 +1-978-648-6000 Minneapolis, MN 55402 dfrank@aquabounty.com AquaBounty.com 31