AquaBounty Atlantic salmon through grow-out tank porthole at Indiana's farm. After the sale, GM fish from this land-based facility will be replaced by non-GM salmon.
Photo: AquaBounty Technologies.
In mid-February AquaBounty (AQB) announced it was putting its Indiana farm up for sale in an attempt to raise additional liquidity to shore up its balance sheet and resume and complete construction of its other farm, in Ohio, which was halted in June 2023 due to high costs. Now, the land-based salmon producer has a buyer, Superior Fresh, an aquaponics company that grows organic salmon and leafy greens in Wisconsin.
According to the U.S. Securities and Exchange Commission (SEC) filing presented by AquaBounty Technologies, Inc. on June 28, Superior Fresh will acquire AquaBounty's land-based aquaculture facility in Albany, Indiana, and certain equipment from its Ohio's farm for cash proceeds of USD 9.5 million (EUR 8.8 million).
Although subject to various closing conditions, the sale is expected to close in July 2024. In the SEC filing, AquaBounty also notes that some of the proceeds from the sale are expected to be used to reduce the company's secured term loan with JMB Capital Partners Lending, LLC.
The land-based salmon company closed fiscal 2023 with a drastic drop in its cash reserves and reported a net loss of USD 11.2 million (EUR 10.3 million) in the first quarter of 2024. This means that losses had increased by 72% over the same period last year.
Thus, the sale of the Indiana farm was a key part of the company's long-term financing plan. "Although the sale of Indiana was a difficult decision, it will allow us to increase our cash position and to decrease our ongoing cash burn," said Sylvia Wulf in presenting AquaBounty's Q1 2024 results, when in addition to Board Chair, she was still CEO of the company, the latter position in which she was relieved in June by David Melbourne.
In that Q1 2024 results presentation, AquaBounty noted that the announcement of the sale of the Indiana farm had also affected the company's revenues, as it had been forced to accelerate the harvest of all fish from the farm to prepare for the sale of the facility.
"Over the course of five weeks, our team harvested over 320mt of fish, the majority of which were below our normal market harvest weight. With the farm now empty of fish, we completed the process in April to shut down and secure all of the internal systems, so that they are ready for restart by a new owner," Wulf explained then. This 'rush' to clean the tanks makes more sense now that the name of the buyer is known.
While AquaBounty is known for having developed its own strain of genetically modified (GM) Atlantic salmon (AquAdvantage), Superior Fresh, which also produces RAS salmon, boasts that its salmon is not only non-GM but does not even use any products of GM origin in its feed.
"Our fish eat a non-GMO, organic diet, and are not fed like most farmed fish, which are too often fed with formaldehyde, pesticides, antibiotics, and GMOs," the company states on its website. "While other salmon are fed unnatural diets, supplemented with pesticides, antibiotics and GMOs, and hurt natural ecosystems, your Superior Fresh salmon raise the bar on nutrition and sustainability," it also claims.
Located in Northfield, Wisconsin, Superior Fresh has an aquaponics facility specializing in leafy greens and coldwater fish that aspires to be the largest in the world. There, it raises premium Atlantic salmon in a state-of-the-art RAS land-based aquaculture facility along with premium organic produce grown in an ultra-modern glass hydroponic greenhouse.
"Our farm is an ecosystem, each organism playing an important role in the balance of life. Our fish thrive in the water that feeds our organic leafy greens, our greens purify the water that is then returned to our fish. And our people nurture this ecosystem, maintaining the delicate balance," the company explains.
Since neither company has issued a press release on the purchase agreement, it is unknown at this time how Superior Fresh will use the still AquaBounty facility in Indiana where it has been growing transgenic Atlantic salmon since 2019 demonstrating, according to Wulf, "the company's ability to grow and sell its salmon in the market."
"We have built a strong operation there," she said on February, and added, "Our focus will be on harvesting the remaining GE Atlantic salmon for sale over the coming months to ready the farm for a new owner." Moreover, when the sale of the facilities was announced, AquaBounty's current non-executive Board Chair placed special emphasis on highlighting the work of its employees.
"Making the decision to sell our Indiana farm was difficult given the incredible team of passionate people who have worked hard over the last eight years to transform the facility and create operational excellence," she said then in an e-mailed statement to WeAreAquaculture.
Now, in the SEC filing filed by AquaBounty, it can be seen that the Indiana team's jobs are not guaranteed. According to the agreement, the buyer may "but is not obligated to" offer employment to the seller's employees "as the buyer may determine in its sole discretion, on such terms and conditions as the buyer may determine in its sole discretion." In other words, Superior Fresh could keep AquaBounty's current team in Indiana but is not obligated.
Finally, the agreement also states that Superior Fresh will accept the Indiana purchased assets in their then-current "as is, where is, with all faults" conditions. With respect to the Ohio equipment, AquaBounty shall be solely responsible for arranging for delivery or pick-up of the same from their current location.