The company had planned to sell both conventional and AquAdvantage salmon in the last quarter of 2020 but delayed harvests because the market was so weak.
“The impact of the Cocid-19 pandemic on market demand required the Company to address the inventory levels of the conventional salmon at our Indiana farm, which began to exceed capacity in December,” said chief executive Sylvia Wulf in a statement accompanying AquaBounty’s results for the fourth quarter of 2020 and for the full year.
Local food charities
“We needed to make room at the farm for our growing biomass of AquAdvantage salmon. As a result, we decided to harvest and begin donating our conventional salmon to local food charities. This provides us with both the chance to give back to our local community and the opportunity to refine our harvesting, processing and transportation processes on a continuous weekly cycle in preparation for the first commercial harvests of AquAdvantage salmon.”
Operating expenses in Q4 were $6.1m (Q4, 2019: $3.5m). AquaBounty said the increase in operating expenses was primarily due to an increase in production costs as the biomass of fish in its farms in Indina and Prince Edward Island, Canada grew from 161 tonnes to over 603 tonnes. In addition, the company recorded an inventory reserve of $1.5m related to the donation programme for the conventional salmon.
AquaBounty ended 2020 with substantially increased cash and cash equivalents worth $96.2m (2019: $2.8m) despite making an increased operating loss of $16.25m ($13.2m).
The increased balance was the result of public offerings of the company’s common shares, including one in December. Another share offering in February raised a further $127m gross.
Debt financing options
Wulf said the income from the offerings provided the financing to fund the expected cost of a 10,000-tonne on-land salmon farm (Farm 3) in the US Midwest, which was critical to secure in advance of breaking ground on construction.
“We are continuing to evaluate debt financing options in support for Farm 3 as well, which could further extend our operational runway as we move forward with construction and commercialisation,” said the chief executive.
A decision on the site for the farm is expected soon, and AquAdvantage salmon are likely to go on sale in the US in April.