What changed in this filing

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Item 1. Business

2022-03-10 compared with 2021-03-09 · 102 added, 77 removed, 167 unchanged (52% of the section changed)

Feed a growing world by developing and deploying new aquaculture technologies.

AquaBounty is a leader in the field of land-based aquaculture and the use of technology for improving its productivity and sustainability.

At AquaBounty, we believe we are a leader in the field of land-based aquaculture and the use of technology for improving its productivity and sustainability.

Our objective is to ensure the availability of high-quality seafood to meet growing global consumer demand, while addressing critical production constraints in one of the most popular farmed species.

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According to the Food and Agriculture Organization of the United Nations (“FAO”), aquaculture was a $250 billion industry in 2018, and we are targeting the $17 billion salmon farming segment of that industry.

Our genetically engineered AquAdvantage salmon is based upon proprietary salmon genetics and grows to harvest size faster than conventional Atlantic salmon.

Our salmon was approved for production, sale, and consumption in the United States on November 19, 2015 by the Food and Drug Administration (“FDA”).

This was followed by an approval from Health Canada for the production, sale, and consumption of AquAdvantage salmon in Canada on May 19, 2016.

Consequently, we have received approvals for our product from what we believe are two of the most respected and rigorous regulatory agencies in the world.

We farm AquAdvantage salmon in land-based, recirculating aquaculture systems (“RAS”), which allow inland fish farms to be established close to major demand centers in a profitable and environmentally sustainable manner.

We believe that our 25 years of experience growing salmon in land-based farms, coupled with the unique genetics of our faster-growing AquAdvantage salmon, provides us with a competitive advantage and an opportunity to establish multiple salmon farms throughout North America and the world.

We currently have two salmon farms in production – a 1,200 metric ton facility in Indiana and a 250 metric ton demonstration facility on Prince Edward Island.

Our plans include the construction of a new 10,000 metric ton farm in the Midwest United States during the next eighteen months and an additional three to four new 10,000 metric ton farms in North America at sites close to consumer consumption over the next seven-to-ten years.

We are also pursuing regulatory approval for AquAdvantage salmon in Brazil, China, and Israel, with the goal of entering those markets with local partners in the form of joint ventures or licensing arrangements.

Our GE Atlantic salmon is based upon proprietary salmon genetics and grows to harvest size faster than conventional Atlantic salmon.

Our salmon was approved for production, sale, and consumption in the United States on November 19, 2015 by the U.S.

Food and Drug Administration (“FDA”).

This was followed by an approval from Health Canada for the production, sale, and consumption of our salmon in Canada on May 19, 2016 and an approval from the National Biosafety Technical Commission for the sale and consumption of our salmon in Brazil on May 12, 2021.

Consequently, we have received approvals for our product from what we believe are three of the most respected and rigorous regulatory agencies in the world.

We farm our GE Atlantic salmon in land-based, recirculating aquaculture systems (“RAS”), which allow inland fish farms to be established close to major demand centers in a profitable and environmentally sustainable manner.

We believe that our 25 years of experience growing salmon in land-based farms, coupled with the unique genetics of our faster-growing GE Atlantic salmon, provides us with a competitive advantage and an opportunity to establish multiple salmon farms throughout North America and the world.

We currently have two salmon farms in production – a 1,200 metric ton facility in Indiana and a 250 metric ton demonstration facility on Prince Edward Island, Canada.

Our plans include the construction of a new 10,000 metric ton farm in Pioneer, Ohio during the next twenty-four months and an additional three to four new 10,000 metric ton farms in North America at sites close to consumer consumption over the next seven-to-ten years.

We are also pursuing regulatory approval for our GE Atlantic salmon in Israel and China, with the goal of entering those markets with local partners in the form of joint ventures or licensing arrangements.

Additionally, we plan to utilize our expertise in biotechnology and RAS operations to enter complimentary areas of the aquaculture industry.

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Total production from global capture fisheries has been relatively stable since the late-1980s, with catches generally fluctuating between 86 million metric tons and 93 million metric tons per year, reaching 96 million metric tons in 2018.

In contrast, aquaculture fish production has grown from 14 million metric tons to a level of 82 million metric tons in 2018 and now accounts for 46% of global fish production.

In contrast, over the same period, aquaculture fish production has grown from 14 million metric tons to a level of 82 million metric tons in 2018 and now accounts for 46% of global fish production.

Feeding the growing population and meeting the demand for fish protein will require aquaculture production to almost double by 2050.

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Our experience operating land-based RAS salmon farms enables us to protect both the fish and the environment.

AquAdvantage Salmon

Our AquAdvantage fish program began over 30 years ago and is based upon a single, specific molecular modification in our salmon that results in more rapid growth during early development.

Our GE Atlantic Salmon

Our GE Atlantic salmon program (“AquAdvantage”) began over 30 years ago and is based upon a single, specific molecular modification in our salmon that results in more rapid growth during early development.

The result is a genetically engineered Atlantic salmon that can grow to market size faster than a conventional farmed Atlantic salmon.

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The accelerated growth allows these fish to reach a marketable size sooner.

This can reduce farming time in a RAS facility from roughly 26 to 28 months for conventional Atlantic salmon to roughly 18 to 20 months for AquAdvantage salmon.

This can reduce farming time in a RAS facility from roughly 26 to 28 months for conventional Atlantic salmon to roughly 18 to 20 months for our salmon.

This accelerated growth has economic and environmental advantages.

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Although RAS farms require greater capital investment than the sea cage approach, we believe that the higher costs are offset by more efficient growth and a shorter transportation distance to market.

Compared to conventional salmon grown in a RAS farm with a similar capital investment, we can produce approximately 70% more AquAdvantage salmon each year.

Compared to conventional salmon grown in a RAS farm with a similar capital investment, we can produce approximately 70% more of our GE Atlantic salmon each year.

Our fish are also 25% more efficient at converting their feed to biomass, which represents a significant cost advantage as feed is the largest variable cost of growing salmon.

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Intellectual Property

The AquAdvantage fish program is based upon a single, specific molecular modification in fish that results in more rapid growth in early development.

The patent for the AquAdvantage technology, which had been issued in certain salmon producing countries, expired in August 2013 and we currently hold a global, perpetual, royalty-free, fully paid, sub-licensable, assignable, non-exclusive right to the technology covering genetically engineered salmonid fish that express endogenous growth hormone under the control of a protein gene promoter from an edible fish.

Our GE Atlantic salmon is based upon a single, specific molecular modification in the fish that results in more rapid growth in early development.

The patent for the underlying technology, which had been issued in certain salmon producing countries, expired in August 2013 and we currently hold a global, perpetual, royalty-free, fully paid, sub-licensable, assignable, non-exclusive right to the technology covering genetically engineered salmonid fish that express endogenous growth hormone under the control of a protein gene promoter from an edible fish.

Despite the expiration of the patent for the licensed technology, we believe that the degree of know-how in the molecular modification process and the regulatory timescales associated with approval of genetically engineered fish present significant barriers to entry and a competitive advantage.

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Subsequently, the maternal sterility patent has been issued in Australia, Brazil, Canada, Chile, Japan, and the Republic of Korea.

While the technology described in the sterility system patent is not currently used or required under any of our current regulatory approvals, the technology may be desirable in the future to obtain or maintain regulatory approvals.

While the technology described in the sterility system patent is not required under any of our current regulatory approvals, the technology may be desirable in the future to obtain or maintain regulatory approvals.

Regulatory Aspects of Genetically Engineered Fish

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At that time, there was no defined regulatory framework for the regulation of bioengineered animals.

There were, however, certain studies that were generally acknowledged to be necessary for an eventual approval process.

There were, however, certain studies that were generally

acknowledged to be necessary for an eventual approval process.

We commenced work on those studies and began a phased submission of studies to the FDA that ultimately was responsive to each technical section of the New Animal Drug Application (“NADA”).

technical sections require submission of studies relating to molecular characterization of the construct;

These technical sections require submission of studies relating to molecular characterization of the construct;

molecular characterization of AquAdvantage salmon lineage;

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The NGOs, including the Center for Food Safety and Friends of the Earth, claimed that the FDA had no statutory authority to regulate genetically engineered animals, and, if it did, that the agency failed to adequately analyze and implement measures to mitigate ecological, environmental, and socioeconomic risks that could impact wild salmon and the environment, including the risk that AquAdvantage salmon could escape and threaten endangered wild salmon stocks.

In December 2019 the court found that the FDA did have authority/jurisdiction over genetically engineered animals under the FFDCA, and in November 2020, the court remanded the EA to the FDA for further work on its NEPA and Endangered Species Act assessments.

In December 2020, the plaintiffs filed a motion to alter or amend the judgment.

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The court’s decisions do not have a current business impact on AquaBounty’s egg production on Prince Edward Island, Canada or AquaBounty’s salmon production in Albany, Indiana.

AquaBounty is working with the FDA on the NEPA and ESA regulatory matters.

On-going Regulatory Requirements

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In addition, every production site for AquAdvantage salmon in the United States requires approval by the FDA of both a Supplemental NADA and satisfaction of corresponding obligations under NEPA, as well as compliance with local permitting requirements for construction of grow-out facilities.

We expect that we may incur significant costs to comply with these environmental and regulatory requirements, which could take several years to complete for each production site.

We expect that we may incur significant costs to comply with these environmental and regulatory requirements, which could be a multi-year process to complete for each production site, though conducted in parallel with our construction timelines.

Labeling and Disclosure Standard

There have been surveys cited by various NGOs that indicate that consumers are reluctant to purchase genetically engineered food and that they would like to see labeling in order to avoid it.

Many states reacted to this by enacting genetically engineered food labeling laws.

Consequently, in response to the potential for state-by-state labeling laws, Congress passed the National Bioengineered Food Disclosure Law (“Disclosure Standard”) in 2016, which directed USDA to establish a national mandatory standard for disclosing foods that are or may be bioengineered.

The Disclosure Standard requires food manufacturers, importers, and certain retailers to ensure bioengineered foods are appropriately disclosed.

The Disclosure Standard came into effect on January 1, 2022, but we began complying in 2021 on a voluntary basis when our salmon began to be harvested and sold.

In conjunction with the bioengineered disclosure, we also have begun to educate consumers on the benefits of our GE Atlantic salmon versus conventional Atlantic salmon, including its 25% improved feed conversion (meaning less feed is needed to produce the same harvest), a lower carbon footprint due to local production, reduced impact on the environment, reduced exposure of the fish to environmental toxins due to use of land-based aquaculture systems, and reduced reliance on vaccines or antibiotics due to improved biosecurity.

In December 2019, the 2020 Appropriations Act was signed into law, which was reintroduced and passed in 2021, which contained an amendment that requires that any genetically engineered animal approved by FDA prior to the effective date of the Disclosure Standard shall include the words ‘‘genetically engineered’’ prior to the existing acceptable market name.

While we believe that this labeling requirement is unnecessary and redundant to the requirement of the Disclosure Standard, we have and will continue to comply with all applicable laws.

Our compliance with these laws and regulations may be onerous and could increase our cost of doing business, impact our competitive position relative to our peers or otherwise have an adverse impact on our business, reputation, financial condition and operating results.

For more information about government regulations applicable to our business, refer to “ Risk Factors ” in Item 1A.

According to the U.S.

Department of Commerce (“DOC”), in 2019 the United States imported a record 886 million pounds (402 thousand metric tons) of Atlantic salmon with an aggregate market value of approximately $4.0 billion, or $4.49 per pound.

The DOC also reported that over 89% of the total quantity of Atlantic salmon imports into the United States in 2018 originated from Chile, Canada, and Norway.

The vast majority of the imported Atlantic salmon originated from Chile, Canada, and Norway.

The Atlantic salmon farming industry in the United States contracted significantly beginning in the 1990s in the face of environmental concerns and lower costs of production from foreign sources, notably Chile.

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Despite intensive public consumer education campaigns promoting its health benefits, seafood consumption in the United States still lags behind other protein sources and trails consumption in overseas markets.

According to the USDA, during the period from 2013 to 2018, annual seafood consumption in the United States ranged between 14 and 16 pounds per capita, significantly behind consumption

of poultry (70 to 78 pounds), beef (51 to 55 pounds), and pork (43 to 47 pounds).

According to the USDA, during the period from 2013 to 2018, annual seafood consumption in the United States ranged between 14 and 16 pounds per capita, significantly behind consumption of poultry (70 to 78 pounds), beef (51 to 55 pounds), and pork (43 to 47 pounds).

In comparison, according to FAO, average seafood consumption worldwide was 45 pounds per capita in 2018.

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However, currently we do not expect that this will have a significant impact on overall consumer demand and product placement in the marketplace generally, and in particular the wholesale marketplace.

To date, large wholesalers have not followed the example of these retailers, and we believe that there will be sufficient demand from smaller retailers, wholesalers, and institutional seafood buyers to absorb our projected production.

We believe that the FDA approval reinforces the message that AquAdvantage salmon is a safe and nutritious seafood product that is identical to conventional farmed Atlantic salmon.

To date, large wholesalers have not followed the example of these retailers, and we have sold our GE Atlantic salmon from both our Indiana and Prince Edward Island farms since commencing harvesting in May 2021.

We believe that there will be sufficient demand from smaller retailers, wholesalers, and institutional seafood buyers to absorb our projected production.

We believe that the FDA approval reinforces the message that our salmon is a safe and nutritious seafood product that is identical to conventional farmed Atlantic salmon.

We believe that consumer sentiment towards genetically engineered foods is evolving.

Based on market research that we commissioned, the top attributes for consumer selection of farm-raised salmon are:

availability, affordability, freshness, safety, and taste.

Based on market research that we commissioned, the top attributes for consumer selection of farm-raised salmon are availability, affordability, freshness, safety, and taste.

According to the poll conducted, 53% of respondents had a first impression of genetically engineered food that was neutral to very positive;

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70% were neutral to very likely to purchase genetically engineered products they buy regularly if labeled with the USDA Bioengineered Disclosure Symbol;

81% were neutral to very positive to the AquaBounty and AquAdvantage story and product benefits;

and 70% were likely to purchase and try AquAdvantage salmon at least once.

There have been surveys cited by various NGOs that indicate that consumers are reluctant to purchase genetically engineered food and that they would like to see labeling in order to avoid it.

Many states reacted to this by enacting genetically engineered food labeling laws.

The Disclosure Standard requires food manufacturers, importers, and certain retailers to ensure bioengineered foods are appropriately disclosed.

The Disclosure Standard will come into effect on January 1, 2022, but entities can begin complying sooner on a voluntary basis.

We plan to commence early compliance with the Disclosure Standard, starting immediately from the first sales of AquAdvantage salmon to our customers in 2021.

In conjunction with the bioengineered disclosure, we also plan to educate consumers on the benefits of AquAdvantage salmon versus conventional Atlantic salmon, including its 25% improved feed conversion (meaning less feed is needed to produce the same harvest), a lower carbon footprint due to local production, reduced impact on the environment, reduced exposure of the fish to environmental toxins due to use of land-based aquaculture systems, and reduced reliance on vaccines or antibiotics due to improved biosecurity.

While we believe that this labeling requirement is unnecessary and redundant to the requirement of the Disclosure Standard, we will comply with all applicable laws.

81% were neutral to very positive to the AquaBounty and our GE Atlantic salmon story and product benefits;

and 70% were likely to purchase and try our salmon at least once.

The salmon distribution system in the United States is complex and varied.

Participants include fishermen, fish farmers, processors, importers, secondary processors, broadline distributors, specialty seafood distributors, brokers, traders, and many different kinds of retail and food service companies.

Salmon distribution channels are evolving, with fewer and larger distributors handling an increasing share of total volume and an increasing share of salmon being sold directly by large fish-farming companies and large wild salmon processors to large retail and food service chains.

We expect that harvested AquAdvantage salmon will be sold into this distribution network with an initial focus on broadline distributors and seafood distributors.

Salmon distribution channels are evolving, with fewer and larger distributors handling an increasing

share of total volume and an increasing share of salmon being sold directly by large fish-farming companies and large wild salmon processors to large retail and food service chains.

Our GE Atlantic salmon is currently being sold into this distribution network with an initial focus on seafood distributors and wholesalers.

This is due to our limited supply of fish, which necessitates our being selective in bringing on new customers.

We expect that once our Ohio farm is in commercial operation, we will be able to expand our customer depth and breadth and increase our channel coverage.

As a commodity food item, the price of Atlantic salmon is variable based on the supply and demand for product weekly.

We base our pricing on a published index by Urner Barry, which provides comprehensive market coverage across all major center-of-the-plate food proteins, taking into account differences for fish size and quality.

The global Atlantic salmon farming industry includes several very large companies with operations in each of the major producing countries.

Consolidation has been evident in the past few years as producers attempt to gain competitive cost advantages while

overcoming the regulatory challenges associated with developing new marine farm sites.

Consolidation has been evident in the past few years as producers attempt to gain competitive cost advantages while overcoming the regulatory challenges associated with developing new marine farm sites.

Major market producers include the following companies:

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We currently have two salmon farms in production – a refurbished 1,200 metric ton facility in Indiana and a 250 metric ton demonstration facility on Prince Edward Island.

Our first harvests of conventional salmon in Indiana commenced in June 2020.

Our first harvests of conventional salmon in Indiana commenced in June 2020 and our first harvests of our GE Atlantic salmon commenced in June 2021 at both of our farms.

At December 31, 2021, we had a total farm biomass of 469 metric tons.

Impact of COVID-19 on Demand

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, SARS-CoV-2, as a pandemic, which continues to spread throughout the United States and worldwide.

Because infections of this virus and the incidences of the disease it causes, certain national, provincial, state, and local governmental authorities in the United States and Canada have issued proclamations and directives aimed at minimizing the spread of the virus.

Additional, more restrictive proclamations and directives may be issued in the future.

The ultimate impact of the COVID-19 pandemic on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 pandemic, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or we, may direct, which may result in an extended period of continued business disruption and reduced operations.

To date, our farm operations have not been materially affected by the pandemic, although we have made modifications to biosecurity procedures and our farm sites to adapt to local requirements and to provide a safe work environment.

Impact of COVID-19

Although COVID-19 vaccines have become more readily available in the United States and other parts of the world, several variants of the virus continue to spread.

Local governmental authorities in the United States and Canada have issued, and continue to update, directives aimed at minimizing the spread of the virus and the Company continues to monitor its status.

The ultimate impact of the evolving COVID-19 pandemic on our operations will depend on future developments, which cannot be predicted with confidence, and we cannot predict the extent or impact of the extended period of continued business interruption and reduced operations caused by the COVID-19 pandemic or any additional preventative or protective measures taken in response.

In connection with the COVID-19 pandemic, we made modifications to our biosecurity procedures at our farm sites in early 2020 to adapt to local requirements and to provide a safe work environment.

Our current preventative and protective measures include, but are not limited to, segregating farm workers to specific locations, rotating shifts, and monitoring worker temperatures upon arrival at our facilities.

To the extent possible, work-from-home is utilized for employees that do not have fish care responsibilities.

We have experienced delays in capital projects due to the pandemic, including a six-month delay in the completion of the processing facility at our Indiana farm, which did not become operational until November 2020.

We utilized third party alternatives for fish processing during the delay.

We have been primarily impacted by a reduction in the market price and demand for Atlantic salmon due to the pandemic’s impact on the food service sector.

This had and continues to have a negative impact on our revenue and inventory value, as we are not yet an

established vendor and customers do not need a new supplier during a period of depressed demand.

Consequently, in December 2020, we made the decision to donate substantially all of our conventional salmon to local food charities, which are experiencing unprecedented need during the pandemic.

This decision was made in order to ease the capacity constraints at our Indiana farm to provide space for our growing biomass of AquAdvantage salmon.

The donation program commenced in February 2021.

We believe the financial impact of the pandemic is likely to continue through at least the first half of 2021, as the industry waits for the roll-out of COVID-19 vaccines and the subsequent reopening of the food service sector.

Any financial impacts beyond the near-term cannot be reasonably estimated at this time but may continue to have a material adverse impact on our business, financial condition, and results of operations in 2021.

In certain circumstances, we utilized, and continue to utilize, work-from-home arrangements for employees that do not have fish care responsibilities.

As a result of the COVID-19 pandemic, we have experienced delays and cost increases in capital projects, additional challenges in our efforts to meet the capacity expectations at our existing facilities and we continue to experience extended lead times on equipment purchases.

We may continue to experience delays and cost increases on farm construction, purchases of capital equipment and supplies and other materials required in our operations due to vendor shortages and labor shortages.

We also expect to continue to be impacted by transportation or other supply chain disruptions to our partners or customers.

In addition, we are carefully managing and monitoring the impact of labor shortages on our ability to meet the annual capacity expectations at our existing facilities.

We were initially impacted by a reduction in the market price and demand for Atlantic salmon due to the pandemic’s impact on the food service sector.

This had a negative impact on revenue and inventory value, as we were not yet an established vendor and customers appeared reluctant to add a new supplier during a period of depressed demand.

During the second half of 2021, we were impacted by a shortage of labor at our Indiana farm and increased costs for third-party processing and transportation.

This had a negative effect on revenue and inventory values and resulted in higher than expected sales costs for the period.

This is expected to continue for the foreseeable future.

We remain focused on maintaining a strong balance sheet, liquidity, and financial flexibility and we continue to monitor developments as we deal with the disruptions and uncertainties from a business and financial perspective related to the evolving COVID-19 pandemic.

North America Plan

Our business plan contemplates that we will construct and operate four to five new, land-based RAS farms in North America at locations close to consumer consumption.

Our longer-term business plan contemplates that we will construct and operate four to five new, land-based RAS farms in North America at locations close to consumer consumption.

Our target is to achieve an annual production output of at least 50,000 metric tons within the next seven to ten years.

We are currently in the process of selecting the site location and finalizing the engineering design and cost for the first of our planned 10,000 metric ton farms, which we believe will range from $140 million to $175 million to build.

Our target is to commence construction on the new farm in the first half of 2021 and begin operation in 2023.

During 2021, we selected Pioneer, Ohio as the site location for our first 10,000 metric ton farm.

Based on the engineering design that has been completed, we have estimated that the roughly 479,000 square foot facility will cost between $290 million and $320 million to construct.

We have commenced site construction activities and our targeted timeline for the introduction of our first batch of GE Atlantic salmon eggs is the end of 2023, pending the required facility approval by the FDA.

Our plan to finance the construction of the farm includes both equity and debt components.

In October 2021, the Board of Directors of the Toledo-Lucas County Port Authority approved the issuance of up to $300 million in municipal bonds for our project.

We are currently proceeding with the bond financing and expect to close the transaction in the second quarter of 2022.

The work that we have done to date on the design of the Ohio farm will serve as a template for future farm projects, though we will continue to incorporate the learnings from our current farm operations and our philosophy of continual improvement.

The picture below shows a design rendering of the inside of the farm.

Egg Production

We have scaled-up our egg production capability at our Fortune and Rollo Bay hatcheries on Prince Edward Island and we can now produce over 10 million eyed eggs annually, which is more than our current internal demand.

As there is a shortage of supply of salmon eggs in the market, we plan to sell our excess conventional salmon eggs and fry to other salmon farmers.

We are also planning to increase our egg production capacity over the next twelve to eighteen months to 30 million eyed eggs annually, which would be sufficient to stock six 10,000 metric ton farms.

As there is a shortage of supply of salmon eggs in the market, we have begun to sell our excess conventional salmon eggs and fry to other salmon farmers.

We have also made the decision to increase our egg production capacity over the next several years to 30 million eyed eggs annually, which would be sufficient to stock six 10,000 metric ton farms.

International Plans

While our primary focus is on North America, we also plan to expand internationally, targeting those markets that are net salmon importers, unable to supply their domestic needs and where we believe we will have success in gaining further regulatory approvals and consumer acceptance.

Consequently, we are seeking regulatory approval for AquAdvantage salmon in Brazil, Israel, and China.

We have already received approval from regulators to conduct field trials for AquAdvantage salmon in Brazil and China.

The field trial in Brazil has been successfully completed, and we are pursuing approval for the sale of AquAdvantage in that country, while the field trial in China is expected to begin in 2021.

Once approved in these locations, we plan to commercialize through a combination of partnerships, joint ventures, and licensing arrangements.

Consequently, we have targeted Brazil, Israel and China as potential markets.

In Brazil, we have received approval for the sale and consumption of our fish, and we are now seeking to identify a local partner.

In Israel, we have selected a partner and we are preparing our regulatory application.

In China, we have received approval from regulators to conduct field trials and have reviewed the commercial landscape.

Once field trials are underway, we will commence a search for a local partner.

Growth Strategy

Optimizing Technology and Innovating for the Future

We are exploring the potential development of a range of additional products, including a second generation of AquAdvantage salmon to help ensure 100% sterility, molecular sterility systems to provide an improved means of sterility for farmed fish, and improved methods for generating genetically engineered fish.

We are exploring the potential development of a range of additional products, including a second generation of our GE Atlantic salmon to help ensure 100% sterility, molecular sterility systems to provide an improved means of sterility for farmed fish, and improved methods for generating genetically engineered fish.

Our primary research and development operations are located in our owned hatcheries on Prince Edward Island.

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Human Capital Resources

As of December 31, 2020, we had 72 employees.

None of our employees are represented by a labor union, and we consider our employee relations to be good.

We believe in the positive impact that a team-based management structure delivers.

We empower our people by placing decision making power at the team level;

driven by those closest to the work.

We provide training opportunities to our teams to continually improve their decision-making skills.

Our recent development initiatives included introduction to lean and continuous improvement, leadership coaching skills, and goal setting and coaching performance.

We believe such initiatives ensure our team’s alignment with our company’s expectations, and when coupled with our confidence in our people’s abilities, our team is positioned to succeed.

As of December 31, 2021, we had 95 team members, 72 of which were in our farm operations and 11 in research and technical support functions.

As of December 31, 2021, we had 12 corporate team members who provided support to all of our operations and were responsible for the execution of all corporate functions, including executive, operational, finance, information technology, legal, and corporate communications.

None of our team members are represented by a labor union, and we consider our employee relations to be good.

We structure our compensation packages to compete for the best talent.

Our compensation packages include a competitive base salary and health and wellness benefits, along with a 401(k) retirement plan that includes a Company match.

We made modifications to our biosecurity procedures at our farm sites in response to the COVID-19 pandemic, including segregating farm workers to specific locations, rotating shifts, and monitoring worker temperatures upon arrival at our facilities.

In certain circumstances, we utilized, and continue to utilize, work from home arrangements for team members that did not have fish care responsibilities.

Recent Events

During 2019, we completed two public offerings totaling 6,246,360 Common Shares for net proceeds of approximately $12.4 million and we issued 83,564 Common Shares through the conversion of outstanding warrants for total proceeds of $0.3 million.

During 2020, we completed three public offerings totaling 33,028,000 Common Shares for net proceeds of approximately $104.6 million and we issued 713,449 Common Shares through the conversion of outstanding warrants for total proceeds of $2.3 million.

On February 8, 2021, we completed a public offering of 14,950,000 Common Shares for net proceeds of approximately $119.2 million.

As of December 31, 2020, we had a cash and cash equivalents balance of $95.8 million.

During 2020, we completed a series of public offerings, resulting in the aggregate issuance of 33,028,000 shares of common stock for net proceeds of approximately $104.6 million and we issued 713,449 shares of common stock through the conversion of outstanding warrants for total proceeds of $2.3 million.

During 2021, we completed a public offering of 14,950,000 shares of common stock for net proceeds of approximately $119.2 million.

As of December 31, 2021, we had a balance of $191.2 million in cash and cash equivalents, marketable securities and restricted cash.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business