AQB — Q2 2026 Financial Report Analysis

A salmon company with no salmon, and about five months of cash

AquaBounty no longer farms fish. It sold its Indiana farm in July 2024 and its Canadian farms, along with the intellectual property behind its genetically engineered salmon, in March 2025. What is left is a half-built 10,000-metric-ton farm site in Pioneer, Ohio, where construction stopped in June 2023. The company reported no revenue in the second quarter of 2026. Its net loss fell to $1.63 million from $3.37 million a year earlier, but most of that improvement came from a $1.53 million write-down in last year's quarter that did not repeat. It ended June with $1.9 million in cash and still discloses "substantial doubt" about its ability to continue as a going concern, meaning management cannot show it has enough money to keep operating for the next 12 months.

At a glance

• $0 revenue. AquaBounty is now a holding company for one asset, the Ohio farm site. Its accounting carries that site at $9.52 million, and all of the company's spending goes to keeping the company running while it tries to sell or redevelop the site.
• $2.35 million of cash used by operations in the first half against $1.89 million of cash at June 30. At the first-half pace (about $390,000 a month), that is roughly five months of runway, which runs out around late November 2026 unless more money comes in.
• Up to 7.46 million new common shares could be created if the convertible preferred stock issued this quarter is converted. The company has 5.15 million common shares today, so conversion would hand roughly 59% of the enlarged share count to the preferred holders.

Results

"Discontinued operations" means businesses the company has sold or plans to sell. Accounting rules report their results on a separate line. For AquaBounty that line covers the Indiana farm, the Canadian farms and, since the last annual report, the Ohio farm project itself. Management made that change after receiving a non-binding letter of interest from a party that wants to buy the Ohio subsidiary.

What moved, and why

Overhead fell by a third. General and administrative expenses dropped to $799,000 from $1.20 million. The 10-Q attributes the decline to "reductions in personnel costs, legal fees, insurance fees, professional fees, state excise tax liabilities, share-based compensation costs, and Board compensation fees." Those are the costs of a company that now has a handful of corporate staff. Compared with the previous quarter, though, the trend went the other way: first-quarter G&A was about $622,000, so Q2 spending was roughly 29% higher. Management says it expects G&A "to remain stable until a new strategic direction of the Company is selected."

Interest expense replaced the overhead savings. Continuing operations recorded $529,000 of interest expense in Q2, compared with none a year earlier. It came from $4.0 million of senior notes (unsecured loans) issued in October 2025 at 18% annual interest. On April 7 the noteholders swapped the $4.0 million of principal and $316,000 of unpaid interest for Series A convertible preferred stock. The cash flow statement shows $514,000 of "non-cash loan amortization costs" over the first half. These are fees paid when the loan was taken out and spread over its life, and the remaining balance was charged off once the notes were retired. So a large share of the first half's $829,000 interest charge was not cash leaving the company. Because of that charge, the loss from continuing operations widened 11% even as overhead fell.

The big swing came from a charge that did not repeat. The loss from discontinued operations shrank to $299,000 from $2.17 million. Q2 2025 included a $1.53 million "long-lived impairment," a write-down of the Ohio equipment's book value. Without that charge, the year-ago net loss would have been about $1.85 million. On that basis the real improvement in Q2 2026 is roughly $0.2 million, not $1.7 million.

What the headline numbers hide

• The 52% narrower loss is mostly a comparison effect. As shown above, the year-ago write-down accounts for most of the change. Underlying spending is lower than a year ago but higher than in Q1.
• The loss per share leaves out the preferred dividends. The new preferred shares accrue dividends at 18% a year on their $7.07 million liquidation value. In Q2 that came to $205,000, which was charged against equity, not the income statement. The reported $0.32 loss per share divides only the $1.63 million net loss by 5.15 million shares. Counting the dividends as a cost to common shareholders gives about $0.36. Those dividends are payable in cash only when the Board declares them, and they can accumulate unpaid. At the current liquidation value they accrue at about $1.27 million a year, more than the company's quarterly G&A run-rate. The Board can also elect to pay accrued dividends in common shares.
• Most of the "$7.7 million raised" was not new cash. MD&A says the company "received $7.7 million in proceeds" and made "$4.0 million in debt repayment." The cash flow statement shows that $4.3 million of that was a non-cash swap of notes and interest into preferred stock. Actual new cash from financing in the first half was $3.73 million net: $0.96 million from a February common stock sale and $2.77 million from preferred stock sold for cash ($0.5 million of Series A in April and $2.25 million of Series B in June, both before fees).
• Positive equity came from the debt swap, not from earnings. Stockholders' equity, meaning assets minus liabilities, went from -$1.89 million at December 31 to +$2.81 million at June 30. That happened because a $4.3 million liability became equity and new shares were sold. Losses kept reducing it.
• Debt is still attached to the Ohio asset. Liabilities held for sale include $7.39 million of debt ($1.24 million current, $6.15 million non-current) tied to the discontinued operations. The Ohio property, plant and equipment is carried at $9.52 million. The difference of about $2 million, before transaction costs, is roughly what a sale at book value would leave for the company. Any sale price below book value would cut into it quickly.
• Cash burn and the reported loss roughly line up. First-half operating cash outflow was $2.35 million against a $2.83 million net loss. The gap is mostly the non-cash loan-cost write-off. The cash figure also includes $293,000 of interest paid on the debt tied to the discontinued operations.

The plan: sell or repurpose the Ohio site

Management says talks with aquaculture buyers "remain ongoing." In July 2026 it widened the search to "developers, utilities, independent power producers, infrastructure investors" for a possible sale, lease or joint development of the Pioneer site. The pitch is the site's existing infrastructure for power generation and data-center ("digital infrastructure") uses. The new risk factor states plainly that AquaBounty "has no operating history in the power generation, energy development, or digital infrastructure sectors" and "currently lack[s] the capital necessary to pursue large-scale infrastructure or energy projects." The company also discloses a non-binding letter of interest to buy the Ohio subsidiary, but gives no price or timeline.

Listing risk is close. As of August 4, 2026, the market value of AquaBounty's listed shares was below $5 million. That is the threshold in a new Nasdaq rule that would delist a company immediately, with no cure period, after 30 business days below it. The SEC approved the rule on July 22, but it was automatically stayed on July 29 after petitions for review. If it takes effect in its current form, AquaBounty would likely fail it.

Takeaway: AquaBounty is no longer an operating business to be judged on its income statement. The investment case rests on whether the Ohio site sells for well above its $7.4 million of attached debt before the $1.9 million cash balance runs out. Any value left after that sale also sits behind $7.07 million of 18%-dividend preferred stock, which ranks ahead of common shareholders and can convert into more shares than exist today.

Outlook

Management gives no financial guidance beyond expecting stable G&A and planning "to continue to sell assets, or to issue equity or debt securities." On the first half's numbers, the June 30 cash lasts until roughly late November 2026. That makes another raise or a completed Ohio transaction the realistic near-term event. A raise would likely dilute common holders further, given the preferred conversion prices of $0.91 and $1.03 per share. A sale near book value would leave a modest cushion after the asset-level debt, but most of that cushion would go to the preferred stock's liquidation preference before common holders see any of it. Points to watch in the Q3 10-Q, due around mid-November: whether the letter of interest turns into a signed agreement, the September 30 cash balance, whether the Board declares or accumulates the preferred dividends, and the outcome of the SEC's review of the Nasdaq $5 million rule.