Maynard, Massachusetts, U.S.A.-based AquaBounty's stock faces potential removal from the Nasdaq Capital Market if it does not raise its share price above USD 1.00 (EUR 1.00).
The letter, sent on 31 October, informed the company that it has 180 calendar days, or until 1 May, 2023, to bring the closing bid of its share price back above USD 1.00. The letter does not have an immediate effect on the stock, and the company will continue to trade under the symbol AQB.
In response, AquaBounty – which is constructing a land-based recirculating aquaculture system (RAS) salmon facility in Pioneer, Ohio, U.S.A. – issued a statement saying it plans to “take any reasonable measure” to maintain its Nasdaq listing. So long as the closing bid price of the common stock is at least USD 1.00 for a period of 10 consecutive business days within the time limit, “Nasdaq will provide AquaBounty with written conformation of compliance and the matter will be closed,” the company said.
The letter comes as AquaBounty continues to lose money in its bid to establish its land-based RAS. The company recorded a higher year-on-year net loss in Q2 2022, losing USD 5.5 million (EUR 5.4 million at the time) versus USD 5.2 million (EUR 5.1 million at the time) in the same period in 2021. However, the gap between its sales and losses narrowed during the quarter as it has begun to market products for the first time. Prior to 2021, the company was a research and development company for two decades and only recently began selling its genetically engineered AquAdvantage salmon.
Despite the losses, the company said during an October 2022 presentation it has aggressive expansion plans, which include building a new farm every two years. That strategy is predicated on the successful completion of a planned RAS salmon facility in Ohio. The company said in September that it is still working on its bond financing for the project with Wells Fargo, which according to AquaBounty should be completed by mid-November.
The Nasdaq notice comes in the midst of a tumultuous financial environment for the development of land-based salmon RAS farms. One of the largest players in the space, Atlantic Sapphire, which operates a salmon RAs in Miami, Florida, U.S.A., had its share price plummet after it issued a revised revenue expectations following a mortality event. The company’s share price dropped from NOK 10.95 (then USD 1.04, EUR 1.50) to a low of NOK 6.80 (then USD 0.64, EUR 0.65) in just under three hours on 17 October. As of market close on 7 November, that price was NOK 6.65 (USD 0.65, EUR 0.64).
That same day – 17 October – Oslo, Norway-based aquaculture firm AquaCon withdrew its proposal for an RAS salmon farm in Federalsburg, Maryland, U.S.A. The company had estimated the cost of the project would be USD 300 million (EUR 299 million). As a result of the AquaCon’s withdrawal, Norway-based aquaculture services and equipment provider AKVA Group also reported losses of NOK 28 million (USD 2.7 million, EUR 2.7 million) due to writing down a loan it made to AquaCon.
The Kingfish Company, too, saw its share price drop in September 2022 – on 1 September its closing price was NOK 19.00 (USD 1.85, EUR 1.85), but on 29 September, its share price dropped to a low of NOK 10.90 (USD 1.06, EUR 1.06), despite higher revenue and production numbers in Q2 2022.
Not all companies have suffered from share price drops, however. Salmon Evolution has seen a steady increase in share price over the past month, despite the resignation of its CEO, Håkon André Berg. At the start of October, shares in the company were trading at NOK 8.45 (USD 0.82, EUR 0.82), but, on 7 November, the price had risen to NOK 9.51 (USD 0.93, EUR 0.92). The company has performed well enough that it gained elevation to the main board of the Oslo Stock Exchange in July 2021.
Photo courtesy of AquaBounty
