AquaBounty Technologies Inc. (AQB) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. AquaBounty Technologies, Inc. is a smaller reporting company that has significantly restructured its operations. Following the sale of its Indiana Farm (July 2024) and Canadian Farms (March 2025), the Company has ceased active fish rearing operations. Its primary remaining asset is the Ohio Farm Project, which is currently classified as discontinued operations and held for sale. The Company is in a strategic wind-down phase, focusing on asset realization and exploring strategic alternatives.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(1,200,070) | $401,135 (Income) |
| Operating Loss (Continuing) | $(621,566) | $(1,165,680) |
| Loss from Discontinued Ops | $(275,269) | $(436,797) |
| Cash and Equivalents | $440,678 | $1,366,328 |
| Total Assets | $10,248,847 | $10,343,593 |
| Total Liabilities | $12,375,278 | $12,234,518 |
| Stockholders' Deficit | $(2,126,431) | $(1,890,925) |
| Long-Term Debt (Net) | $3,786,126 | $3,486,141 |
| Net Cash Used in Operating Activities | $(1,020,167) | $(2,361,726) |
Material Changes vs. Prior Period
- Profitability Shift: The Company reported a net loss of $1.2 million in Q1 2026, compared to a net income of $401k in Q1 2025. The prior year income was driven by a $2.0 million non-cash loan forgiveness gain, which did not recur.
- Expense Reduction: General and administrative expenses decreased by 46% to $622k, reflecting reduced headcount and operational costs following the exit from fish rearing. Sales and marketing expenses dropped to zero.
- Debt Structure: Interest expense of $300k was recognized in Q1 2026 related to Senior Notes issued in October 2025. No interest expense was recorded in Q1 2025.
- Capital Raising: In February 2026, the Company raised approximately $960k in net proceeds from the issuance of common stock and warrants.
- Cash Position: Cash balances declined by approximately $61k during the quarter, leaving the Company with $441k as of March 31, 2026.
Outlook, Risks, and Contingencies
- Going Concern Uncertainty: Management has raised substantial doubt about the Company's ability to continue as a going concern within one year. The Company has an accumulated deficit of $389 million and relies on raising additional capital or selling assets to fund operations.
- Subsequent Event (Debt-for-Equity Swap): On April 7, 2026, the Company exchanged $4.0 million of Senior Notes principal and $316k of accrued interest for Series A Convertible Preferred Stock. This transaction also included a new $500k cash investment for additional Preferred Stock.
- Asset Sales: The Company is actively working with an investment bank to sell the Ohio Farm Project. A non-binding Letter of Interest was received, triggering the reclassification of these assets to discontinued operations.
- Risk Factors: Key risks include the inability to secure additional funding, potential dilution from the new Preferred Stock (which has senior liquidation preferences and cumulative dividends), and the possibility of exhausting resources before a strategic transaction is completed.
Investor Verification Checklist
- Liquidity Runway: Verify if the $441k cash balance is sufficient to cover operating costs until the next capital raise or asset sale.
- Preferred Stock Terms: Review the specific terms of the Series A Convertible Preferred Stock issued in April 2026, particularly regarding dividend accrual rates, conversion ratios, and liquidation preferences.
- Ohio Farm Valuation: Assess the likelihood and timeline of selling the Ohio Farm Project, which represents the majority of the Company's remaining assets ($9.6M held for sale).
- Debt Covenants: Confirm compliance with covenants on the remaining Senior Notes and the impact of the debt-for-equity swap on future financing flexibility.
- Share Count: Monitor the impact of the February 2026 equity issuance and the April 2026 preferred stock conversion on common share dilution.