AquaBounty said getting the green light for such an increase now would provide a sufficient reserve of authorised but unissued shares to support growth and to provide flexibility for future corporate needs.
“The additional authorised shares would enable us to issue shares in the future in a timely manner and under circumstances we consider favourable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance,” said AquaBounty in a US Securities and Exchange Commission statement.
Dilution of ownership
The company said the authorisation would not alter the number of common shares presently issued, but added that issuance of any additional shares may dilute the proportionate ownership and voting power of existing stockholders, and that their issuance, of possibility of such, may depress the company’s share price.
Shareholders are being asked to vote on the proposal either online or by post ahead of a special meeting on November 19.
AquaBounty shares have proved attractive to investors, despite years of losses in a long run-up to commercialisation of its AquAdvantage salmon, which grow more quickly than conventional Atlantic salmon.
In August this year the Massachusetts-based company raised $31.625 million, less discounts and commissions, from the sale of 11 million shares in a public offering and a further 1.65 million shares to the underwriters of the offer. Prior to that, it raised $15.5m gross by selling 10 million shares in February.
In March 2019 it raised $7.5m in a share sale following the US Food and Drug Administration’s decision to allow the company to grow and sell its salmon in the United States, and followed that in April 2019 with a second offer which raised another $5.75m.
AquaBounty has on-land farms near Albany, Indiana and on Prince Edward Island, Atlantic Canada, where it is growing its AquAdantage GM salmon, and is finalising the potential site and design for a planned 10,000 tonne farm in the US.
The first AquAdvantage salmon from the Indiana farm are due to be harvested in this quarter, with the first from PIE early in 2021.