AQB 10-K & 10-Q changes, risk factors and insider trading

We require new financing to provide liquidity for working capital and to fund the completion of our Ohioevolving Farmstrategic Project.plan. To meet this need, we have engaged an investment bank to pursue a range of funding and strategic alternatives, including potential joint venture partnerships or other strategic transactions. There is no guarantee that additional funds will be available on a timely basis, on acceptable terms, or at all, or that such funds, if raised, would be sufficient to enable us to continue to implement our business strategy. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of holders of our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, or strategic alliances with third parties, we may have to relinquish valuable rights to our future revenue streams on terms that may not be favorable to us.

We require approvals and permits to construct and operatefor our Ohio Farm Project, and any delay or denial of those approvals or permits could potentially delayimpact orthe haltvalue certainof operationsthose assets and commerciallimit efforts.our strategic options.

We may not be able to obtain the approvals and permits that will be necessary in order to constructmaintain andthe operatevalue ourof the Ohio Farm Project as planned.Project. We will need to obtainmaintain a number of required permits in connection with the hydrology, construction and operation of our Ohio Farm Project, which is often a time-consuming process. Delays or conditions imposed in obtaining the required approvals and permits for our farms, have delayed and may further delay our expected construction completion, commercial stocking and first sale dates and/or lead to further cost increases. If we are unable to obtainmaintain the required approvals and permits for our Ohio Farm Project, we will not be ablelimited to construct the farm. In addition, federal, state and local governmental requirements could substantially increasein our costs,strategic whichoptions couldfor materiallythese harm our results of operations and financial condition.assets.

We may pursue strategic acquisitions, investmentsdispositions, mergers or mergersjoint ventures or other strategic transactions that could have an adverse impact on our business if they are unsuccessful.

On OctoberJanuary 31,15, 2022,2025, we received a letter (the “20222025 Notice”) from Nasdaq notifying us that, because the closing bid price for our common stock had been below $1.00 per share for the previous 30 consecutive business days, it no longer complied with the minimum bid price requirement for continued listing on Nasdaq. The 20222025 Notice had no immediate effect on our listing or on the trading of our common stock. The 20222025 Notice provided us with a compliance period of 180 calendar days, or until MayJuly 1,15, 2023,2025, to regain compliance. We were subsequently granted an additional 180 calendar days, or until OctoberJanuary 30,12, 2023,2026, to regain compliance. On September 15, 2025 we received a notice from Nasdaq confirming that we had regained compliance with the minimum $1.00 bid price per share requirement for continued listing on Nasdaq.

There can be no assurance that we will regainbe able to maintain compliance with the Nasdaq minimum bid price requirement duringor the 180-day compliance period, secure a second 180-day period to regain compliance, maintain compliance with theany other applicable Nasdaq continued listing requirements or be successful in appealing any delisting determination.standards. Any failure to comply with Nasdaq listing rules could lead to the delisting of our common stock from Nasdaq and our common stock trading, if at all, only on the over-the-counter markets, which would likely have less liquidity and more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of our common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock would likely be significantly adversely affected.

AquaBounty has historically pursued a growth strategy that included the construction of large-scale RAS farms for producing our GE Atlantic salmon. We had commenced construction of our 10,000 metric ton Ohio Farm Project, but paused the construction in June 2023, as the cost estimate to complete the farm continued to substantially increase due to inflation and other factors. Further, these cost increases impaired our ability to pursue municipal bond financing, which was a necessary component of our funding strategy. We subsequently engaged an investment bank to pursue a range of funding and strategic alternatives and to assist management in the prioritization of our core assets. These efforts resulted in the sale of our Indiana Farm in July 2024, recurring sales throughout the2024 yearand 2025 of selected Ohio Equipment Assets originally intended for the Ohio Farm Project, and the sale of our Canadian Farms, and our Corporate IP in March 2025. During 2024, we also focused on cost containment to preserve and extend our available cash. After completion of these transactions, our primary remaining asset is our investment in the Ohio Farm Project, consisting of the remaining Ohio Equipment Assets and the Ohio Farm Site. We continue to work with ouran investment bank to identify the optimal path forward for realizing the potential of this asset, eitherincluding throughits newpossible investment, partnership or other strategic options.sale.

As noted above, we sold our Indiana Farm in July 2024 and2024, our Canadian Farms in March 2025.2025, These farmsand have been selling Ohio Equipment Assets to generate liquidity. In conjunction with the work that our investment bank has done to help us realize the value of our Ohio Farm Project, we received a non-binding Letter of Interest to purchase our Ohio subsidiary. Though this offer is currently being considered by the Company, we determined the actions in 2025 that contributed to receiving the non-binding Letter of Interest to be a triggering event for revaluing these assets and we designated the Ohio Farm Project as a discontinued operationsoperation, along with the Indiana Farm and the Canadian Farms in our consolidated financial statements for the years ended December 31, 20242025 and 20232024 in this Form 10-K (see Note 4 to our consolidated financial statements for additional information).

Impairment Charges on Discontinued Operations

We continued to sell Ohio Equipment Assets during the remainder of the year,2024, and based on these additional transactions, we conducted an impairment analysis at year-end on the remaining Ohio Equipment Assets that were held for sale, along with the Ohio Farm Site. As a result of this analysis, we recorded impairment charges of $18.2 million and $57.3 million against the Ohio Equipment Assets and the Ohio Farm Site, respectively.

In December of 2024, we entered into a Letter of Intent with a buyer to purchase the Canadian Farms. The transaction closed in March 2025 and includedwe allrecorded an impairment charge of our$5.4 Corporatemillion IP. Basedbased on the net sale price, we recorded impairment charges of $5.4 million and $0.2 million against the Canadian Farms and Corporate IP, respectively. The table below depicts the impairments charges recorded during 2024 by asset group totaling $129.8 million.price.

With the windingexit down offrom our fish rearing operations, we have significantly reduced our headcount and on-going operating costs. We maintain a small core group of corporate individuals to oversee our strategic options, our asset sale transactions and our books and records. As of December 31, 2024,2025, we had an accumulated deficit of $370$388 million and $230$501 thousand in cash and cash equivalents on our consolidated balance sheet. With the sale of our Canadian Farms and additional sales of our Ohio Equipment Assets, we have $557 thousand in cash as of March 24, 2025. We require new funding to provide liquidity for working capital and to fund the completion of our Ohioevolving Farmstrategic Project.plan. Consequently, our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on acceptable terms, or at all.

General and administrative expenses consist primarily of salaries and related costs for employees in executive, corporate, and finance functions. Other significant general and administrative expenses include corporate governance and public company costs, regulatory affairs, rent and utilities, insurance, and legal services. We had fivethree and 15five employees in our general and administrative group at December 31, 20242025 and 2023,2024, respectively. We expect our general and administrative expenses to decreaseremain substantiallystable asuntil a resultnew strategic direction of the windingCompany downis of our fish rearing activities and the sales of our Indiana Farm and Canadian Farms.selected.

Long-lived Asset Impairment

Interest expense includes the interest on our loans and accounts payable for our continuing operations. Loan forgiveness relates to the termination of an outstanding loan. Other income (expense) includes bank charges, fees, and interest income, and miscellaneous gains or losses on asset disposalsincome from our continuing operations.

Loss from Discontinued Operations includes all operating costs for our Ohio Farm Project, our Indiana FarmsFarm and our Canadian Farms, including fish and egg production costs, sales and marketing, research and development, general and administrative expenses, $27.9 million of non-cash long-lived asset impairment charges recorded in conjunction with the sales of the Indiana Farm and the Canadian Farms,charges, a $1.0 million net realizable value adjustment of inventory for the Indiana Farm,inventory, interest expense,expense and banking fees and other charges.fees.

During the yearyears ended December 31, 2025 and 2024, we recorded $101.9$14.4 million and $129.8 million, respectively of impairment charges from continuing operations to write down the carrying value of long-lived assets. See additional discussion regarding this impairment in "NotesNote 4 – Discontinued Operations and Assets Held for Sale” of the notes to the Consolidatedconsolidated Financialfinancial Statementsstatements -contained Notes 4 and 6 appearing elsewhere inwithin this Annual Report on Form 10-K.

Sales and marketing expenses for the year ended December 31, 20242025 decreased $459by $185 thousand or 71% from the year ended December 31, 2023, primarily2024 due to decreases in personnel costs, marketing programs,costs and share-basedprogram compensation costsspending related to the sale of our production grow-out Indiana Farm.Farm and Canadian Farms. We are no longer incurring sales and marketing expenses.

General and administrative expenses for the year ended December 31, 20242025 decreased $3.4$5.0 million or 27% from the year ended December 31, 2023,2024, primarily due to decreasesreductions in personnel costs, professional servicelegal fees, legal costs, state excise tax liabilities, share-based compensation costs, professional fees, audit fees, and travel, relatedpartly tooffset theby salelegal ofsettlement our production grow-out farm in Indiana, and our efforts to reduce operating spend.expenses.

Long-lived Asset Impairment

Other Income (Expense)

Other expense for 20242025 and 20232024 is comprised of interest income, interest on debt, and bank charges,charges. andOther miscellaneousincome gainsfor and2025 losses on the disposal of assets. The increase in other expense of $2.1 million in the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to interest expenseis related to the costforgiveness of ouran bridgeoutstanding loan.

The loss from discontinued operations for the year ended December 31, 20242025 was significantly higherlower than for the year ended December 31, 20232024, as a result of $27.9 million in non-cash asset impairment charges recorded in conjunction with the sales of the Indiana Farm and the Canadian Farms were sold in July 2024 and March 2025, respectively. The loss in 2025 is primarily due to a $1.0non-cash asset impairment charge of $14.4 million netrecorded realizable value adjustment of inventory foragainst the Indiana Farm. The 2024 loss was partly offset by lower IndianaOhio Farm losses, as we owned the farm for only seven monthsProject in 2024,conjunction aswith comparedits topotential twelve months in 2023.sale.

We have incurred losses from operations since our inception in 1991, and, as of December 31, 2024,2025, we had an accumulated deficit of $370$388 million. We expect to continue to experience significant losses for the foreseeable future, and we will require additional cash to provide liquidity for working capital and to fund the completion of our Ohioevolving Farmstrategic Project.plan. Liquidity has primarily come from equity financings, supplemented by debt transactions and asset sales.

During 20242025 and 2023,2024, we received $6.9$3.3 million and $418$6.9 thousand,million, respectively, in debt proceeds. During 2025 and 2024, we sold $7.1 million and $10.5 millionmillion, respectively of assets. In the future, we expect to use a combination of asset sales and debt and equity issuances to fund our remainingcontinuing operations.

Our principal contractual commitments include capital expenditure obligations, repayments of debt and related interest,interest and payments under operating leases. Refer to the notes in our consolidated financial statements for further information about our capital expenditure commitments (Note 6), debt (Note 7), and lease payment obligations (Note 10).

Net cash used in operating activities during the year ended December 31, 2024,2025, was primarily due to our $149.2$18.5 million net loss, partially offset by non-cash depreciation and share-based compensation charges of $1.2$71 million,thousand and long-lived asset impairment charges of $129.8$14.4 million, and increased by loan forgiveness and other non-cash gains of $2.4 million and working capital sourcesuses of $4.3$2.4 million. Spending on both continuing and discontinued operations decreased in the current year, before the recording of non-cash asset impairment charges, due to the salesales of the Indiana Farm,Farm and the Canadian Farms, and the associated reductions in personnel, marketing programs, outside research projects, professional services, and share-based compensation. The increasedecrease in cash providedrelated byto working capital sourcesuses was primarily due to reductions in inventory and other current assets, along with increases in accounts payable and accrued liabilities.liabilities and increases in prepaid and other assets.

Net cash used in operating activities during the year ended December 31, 2023,2024, was primarily due to our $27.6$149.2 million net loss, partially offset by non-cash depreciation and share-based compensation charges of $2.7$1.2 millionmillion, long-lived asset impairment charges of $129.8 million, and working capital sources of $604$4.3 thousand.million. Spending on both continuing and discontinued operations increaseddecreased in 20232024 as compared to 20222023, before the recording of non-cash impairment charges, due to increasesthe sale of the Indiana Farm, and reductions in productionpersonnel, activitiesmarketing atprograms, ouroutside Rolloresearch Bayprojects, professional services, and Indianashare-based farmcompensation. sites,The increases in headcount and increases in costs for excise taxes, legal fees and professional fees. Increaseincrease in cash provided by working capital sources was primarily due to a decreasereductions in inventory and prepaidother expenses,current partiallyassets, offsetalong bywith an increaseincreases in accounts payable and accrued expenses.

Net cash provided by investing activities was $7.1 million during the year ended December 31, 2025, compared to $7.6 million during the year ended December 31, 2024,2024. comparedDuring to2025, netwe cashreceived used$7.1 inmillion investingfrom activitiesthe sale of $68.9our millionCanadian duringFarms theand yearcertain endedOhio DecemberEquipment 31, 2023.Assets. During 2024, we used $2.9 million for the purchase of property, plant and equipment at our farm sites, and we received $10.5 million from the sale of our Indiana Farm and certain Ohio Equipment Assets. During 2023, we used $65.1 million for construction charges and equipment deposits for our Ohio Farm Project, and $2.2 million and $1.6 million for equipment purchases and deposits for our Indiana Farm and Canadian Farms, respectively.

Net cash provided by financing activities was $1.9 million during the year ended December 31, 2025, compared to net cash used in financing activities wasof $2.7 million during the year ended December 31, 2024,2024. comparedDuring to2025, $309we thousandreceived during$3.3 themillion yearin endedproceeds Decemberfrom 31,new 2023.debt, and we repaid $1.4 million of outstanding debt. During 2024, we received $6.9 million in proceeds from new debt, and we repaid $9.6 million of outstanding debt. During 2023, we received $418 thousand in proceeds from new debt, and we repaid $726 thousand of outstanding debt.

Since inception, we have incurred cumulative net losses and negative cash flows from operating activities, and we expect this to continue for the foreseeable future. As of December 31, 2024,2025, we had $230 thousand of cash and cash equivalents. With the sale of our Canadian Farms and additional sales of our Ohio Equipment Assets, we have $557$501 thousand in cash as of March 24, 2025.balances. Our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on terms acceptable to us, or at all. This raises substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.

During 2024, we completed the sale of our Indiana Farm, along with certain Ohio Equipment Assets for net proceeds of $9.2 million. In MarchDuring 2025, we completed multiple sales of certain Ohio Equipment Assets for cumulative gross proceeds of $5.0 million and we completed the sale of our Canadian operationsFarms for gross proceeds of $2.1 million. In October 2025, we completed an issuance of senior notes for net proceeds of $1.9$3.3 million. We plan to continue to sell availableassets, Ohioor Equipmentto Assetsissue equity or debt securities to increase our cash liquidity and fund our workingevolving capitalstrategic and the construction of our Ohio Farm Project.plan.

In the period from incorporation to MarchJune 31,30, 2026, we have incurred cumulative net losses of approximately $389$391 million, and we expect to incur additional net losses in future periods. These losses were related to our personnel, research and development, production and marketing costs. As of MarchJune 31,30, 2026, we had $441$1.9 thousandmillion in cash and cash equivalents.

The issuance of Seriesconvertible Apreferred Convertible Preferred Stockstock may adversely affect our liquidity, governance, and the rights of holders of our common stock.

On April 7, 2026, we issued shares of Series A Convertible Preferred Stock in a private placement, including in exchange for outstanding indebtedness. TheOn June 25, 2026, we issued shares of Series AB Convertible Preferred Stock hasin a private placement. Both series of preferred stock have rights senior to our Common Stock, including cumulative dividends, a senior liquidation preference, redemption rights in certain circumstances, and conversion rights into Common Stock. Dividends accrue cumulatively at a high rate and are payable only if declared by our Board of Directors out of legally available funds, and unpaid dividends continue to accrue, increasing our obligations and potentially exacerbating our liquidity constraints.

The conversion of the Series A Convertible Preferred Stock or Series B Preferred Stock could result in significant dilution to holders of our Common Stock and may adversely affect the trading price of shares of our Common Stock. In addition, theboth Seriesseries Aof Convertiblepreferred Preferredstock Stock includesinclude protective provisions requiring preferred stockholder approval for certain corporate actions, which may limit our operational and financing flexibility. In a liquidation, insolvency, or change of control, holders of shares of Common Stock may receive little or no value after satisfaction of creditor claims and the Seriespreferred A Convertible Preferred Stockstock liquidation preference.

AquaBounty has historically pursued a growth strategy that included the construction of large-scale RAS farms for producing our GE Atlantic salmon. We had commenced construction of our 10,000 metric ton Ohio Farm Project, but paused the construction in June 2023, as the cost estimate to complete the farm continued to substantially increase due to inflation and other factors. Further, these cost increases impaired our ability to pursue municipal bond financing, which was a necessary component of our funding strategy. We subsequently engaged an investment bank to pursue a range of funding and strategic alternatives and to assist management in the prioritization of our core assets. These efforts resulted in the sale of our Indiana Farm in July 2024, recurring sales throughout 2024 and 2025 of selected Ohio Equipment Assets originally intended for the Ohio Farm Project, and the sale of our Canadian Farms, and our Corporate IP in March 2025. After completion of these transactions, our primary remaining asset is our investment in the Ohio Farm Project, consisting of the remaining Ohio Equipment Assets and the Ohio Farm Site. We continue to work with an investment bank to identify the optimal path forward for realizing the potential of this asset, including its possible sale.

With the exit from our fish rearing operations, we have significantly reduced our headcount and on-going operating costs. We maintain a small core group of corporate individuals to oversee our strategic options, our asset sale transactions and our books and records. As of MarchJune 31,30, 2026, we had an accumulated deficit of $389$391 million and $441$1.9 thousandmillion in cash on our condensed consolidated balance sheet. We require new funding to provide liquidity for working capital and to fund our evolving strategic plan. Consequently, our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on acceptable terms, or at all.

Comparison of the three months ended MarchJune 31,30, 2026, to the three months ended MarchJune 31,30, 2025

The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025, together with the changes in those items in dollars and as a percentage (all dollar amounts in thousands):

There were no sales and marketing expenses for the three months ended MarchJune 31,30, 2026,2026 or 2025, due to the sale of our Indiana Farm and Canadian Farms.

General and administrative expenses for the three months ended MarchJune 31,30, 20262026, were down from the corresponding period in 2025, primarily due to reductions in personnel costs, audit fees, legal fees, insurance fees, professional fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees.

Other expense for the three months ended MarchJune 31,30, 20262026, is comprised of interest expense and bank charges. Other income for the three months ended MarchJune 31,30, 2025 is comprised of the forgiveness of an outstanding loan and interest income, less interest expense and bank charges.

The loss from discontinued operations for the three months ended MarchJune 31,30, 20262026, was comprised of general administrative expenses and interest expense. The loss from discontinued operations for the three months ended MarchJune 31,30, 2025 was comprised of alla remaininglong-lived operatingasset costs for our Indiana Farm and our Canadian Farms, primarily fish and egg husbandry costs,impairment, general and administrative expenses and interest expense and banking fees.fees related to the Ohio Farm.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026, was primarily comprised of our $1.2$2.8 million net loss, which included $300$514 thousand in non-cash interestloan and amortized loanamortization costs, non-cash share-based compensation charges of $5 thousand and working capital uses of $125$33 thousand. Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025, was primarily comprised of our $401$3.0 thousandmillion net income,loss, which included a $2.0 million non-cash gain on the forgiveness of an outstanding loan, non-cash share-based compensation charges of $40$57 thousand,thousand and an asset impairment charge of $1.2 million, and working capital uses of $795$206 thousand.

Spending decreased in the current period due to reductions in personnel and other general administrative costs, such as, audit fees, legal fees, insurance fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees. Uses of cash from changes in working capital were due to decreases in accounts payable and accrued expenses,expenses partlyand offsetan by a decreaseincrease in prepaid expenses and other assets.

During the threesix months ended MarchJune 31,30, 2026, there were no investing activities, and during the threesix months ended MarchJune 31,30, 2025, we received $3.7$4.6 million from the sale of certain Ohio Equipment Assets.assets.

During the threesix months ended MarchJune 31,30, 2026, we received $960$7.7 thousandmillion in proceeds from the issuance of preferred stock, common stock and warrants.warrants and we made $4.0 million in debt repayment. During the threesix months ended MarchJune 31,30, 2025, we made $232 thousand in debt repayments.

Since inception, we have incurred cumulative net losses and negative cash flows from operating activities, and we expect this to continue for the foreseeable future. As of MarchJune 31,30, 2026, we had $441$1.9 thousandmillion in cash balances. Our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, on terms acceptable to us, or at all. This raises substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.

On February 11, 2026, we completed an equity transaction with certain investors, pursuant to which we sold an aggregate of 1,269,509 shares of our Common Stock and pre-funded warrants to purchase an aggregate of 67,706 shares of Common Stock for gross proceeds of $1.15 million. We plan to continue to sell assets, or to issue equity or debt securities to increase our cash liquidity and fund our evolving strategic plan.

Until such time, if ever, as we can generate positive cash flows from operating activities, we may finance our cash needs through a combination of sales of non-core assets, equity offerings, debt financings, government or other third-party funding, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of holders of our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements, or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or to grant licenses on terms that may not be favorable to us.

There have been no material changes to these estimates, or the policies related to them, during the threesix months ended MarchJune 31,30, 2026. For a full discussion of these estimates and policies, see “Critical Accounting Policies and Estimates” within “Management’s Discussion and Analysis of Financial Results of Operations” in our 2025 Annual Report on Form 10-K.