AquaBounty Technologies, Inc. (AQB): Business Model Canvas [11-2024 Updated]
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AquaBounty Technologies, Inc. (AQB) Bundle
In an era where sustainability and innovation are paramount, AquaBounty Technologies, Inc. (AQB) stands at the forefront of aquaculture with its groundbreaking business model. By focusing on genetically engineered Atlantic salmon, AquaBounty not only addresses pressing issues like food security and climate change but also sets a new standard in seafood production. Explore how their strategic partnerships, advanced technologies, and unique value propositions are reshaping the industry and paving the way for a more sustainable future below.
AquaBounty Technologies, Inc. (AQB) - Business Model: Key Partnerships
Partnerships with investment banks for financing
AquaBounty Technologies has engaged with various investment banks to secure financing necessary for its operations and growth initiatives. In April 2024, the company entered into a Loan Agreement with JMB Capital Partners Lending, LLC, which provided a secured term loan of up to $10 million to fund working capital. The initial loan advancement of $5 million was made in April 2024, followed by an additional $1.5 million in July 2024. This loan carried an interest rate of 15% on the outstanding principal balance.
Collaborations with research organizations for genetic and nutrition studies
AquaBounty collaborates with various research organizations to enhance its genetic engineering capabilities and optimize nutrition for its genetically engineered Atlantic salmon. These partnerships are crucial for continuing innovation in their breeding processes and improving the nutritional profile of their products. Specific financial details regarding these collaborations are not disclosed, but the company has invested significantly in research and development, as evidenced by a reduction in R&D expenses from $485,532 in 2023 to $236,384 in 2024.
Relationships with regulatory bodies for compliance
AquaBounty maintains strong relationships with regulatory bodies such as the U.S. Food and Drug Administration (FDA) and Health Canada. These relationships are essential to ensure compliance with safety and environmental standards for their genetically engineered products. The company reported a compliance cost of approximately $1.3 million associated with maintaining its regulatory approvals.
| Partnership Type | Partner | Financial Impact/Details |
|---|---|---|
| Investment Banks | JMB Capital Partners Lending, LLC | Secured term loan of up to $10 million, initial $5 million in April 2024, interest rate 15% |
| Research Organizations | Various | Investment in R&D decreased from $485,532 in 2023 to $236,384 in 2024 |
| Regulatory Bodies | FDA, Health Canada | Compliance costs approximately $1.3 million |
AquaBounty Technologies, Inc. (AQB) - Business Model: Key Activities
Farming and harvesting genetically engineered Atlantic salmon
AquaBounty Technologies primarily focuses on farming genetically engineered (GE) Atlantic salmon, which have been designed to grow faster than conventional salmon. As of September 30, 2024, the company reported a total product revenue of $705,262 for the nine months ended, a significant decrease from $1,919,409 in the same period of the previous year, largely due to reduced sales from its Indiana farm. The harvest of GE Atlantic salmon reached 415 metric tons (mt) in the nine months ended September 30, 2024, compared to 369 mt in the same period the previous year, indicating a 12% increase.
Research and development in fish genetics and health
The company invests heavily in research and development (R&D) to enhance fish genetics and health. For the nine months ended September 30, 2024, R&D expenses were reported at $236,384, down from $485,532 in the same period of 2023, reflecting efforts to reduce operating costs. This focus on R&D is critical for maintaining a competitive edge in the aquaculture industry and ensuring the health and growth efficiency of the salmon stock.
Construction and operation of recirculating aquaculture systems
AquaBounty employs recirculating aquaculture systems (RAS) to optimize water use and improve the farming environment for its salmon. As of September 30, 2024, the company utilized $2.7 million for the purchase of property, plant, and equipment related to its farm sites. The total property and equipment value stood at $80,188,450. The construction of the Ohio farm site, with an ongoing commitment of $6.3 million for construction-related expenses, emphasizes the company's investment in sustainable aquaculture technology.
| Key Activity | Metric | Value |
|---|---|---|
| Product Revenue | 9 Months Ended September 30, 2024 | $705,262 |
| Harvest of GE Atlantic Salmon | Metric Tons (mt) | 415 mt |
| R&D Expenses | 9 Months Ended September 30, 2024 | $236,384 |
| Investment in Property, Plant, and Equipment | 9 Months Ended September 30, 2024 | $2.7 million |
| Total Property and Equipment Value | As of September 30, 2024 | $80,188,450 |
| Construction Commitment for Ohio Farm | As of September 30, 2024 | $6.3 million |
AquaBounty Technologies, Inc. (AQB) - Business Model: Key Resources
Advanced aquaculture facilities in Indiana and Ohio
AquaBounty Technologies operates advanced aquaculture facilities primarily located in Indiana and Ohio. As of September 30, 2024, the net book value of property, plant, and equipment was approximately $80.2 million, a significant decrease from $174.4 million at the end of 2023, largely due to the sale of their Indiana farm. The company has invested in state-of-the-art systems for breeding and raising genetically engineered Atlantic salmon, which are designed to maximize production efficiency while minimizing environmental impact.
Proprietary genetic technologies for salmon breeding
AquaBounty holds proprietary genetic technologies crucial for its breeding programs. The company utilizes advanced genetic modification techniques to produce its genetically engineered (GE) Atlantic salmon, which grow faster and require less feed than traditional salmon. This genetic technology is protected by patents, contributing significantly to AquaBounty's competitive advantage in the aquaculture industry. In the nine months ended September 30, 2024, AquaBounty reported a revenue of approximately $705,262 from non-GE products, reflecting a shift in focus following the downsizing of its GE salmon operations.
Experienced management team with aquaculture expertise
The management team at AquaBounty Technologies consists of professionals with extensive experience in aquaculture and biotechnology. This expertise is pivotal for navigating the regulatory landscape and optimizing production practices. As of the latest financial report, AquaBounty recorded cumulative net losses of approximately $286 million since its inception, indicating the substantial challenges faced in the industry. The management's strategic decisions are critical in steering the company towards profitability amidst ongoing financial challenges.
| Resource | Description | Value/Impact |
|---|---|---|
| Facilities | Advanced aquaculture facilities in Indiana and Ohio | $80.2 million (net book value) |
| Genetic Technologies | Proprietary technologies for breeding GE Atlantic salmon | Significant competitive advantage |
| Management Team | Experienced professionals in aquaculture | Guides strategic direction and operational efficiency |
AquaBounty Technologies, Inc. (AQB) - Business Model: Value Propositions
Sustainable, antibiotic-free salmon production
AquaBounty Technologies focuses on sustainable aquaculture practices. The company produces genetically engineered (GE) Atlantic salmon that grow faster than traditional salmon. This innovation allows for more efficient use of resources, reducing the environmental impact associated with conventional salmon farming. The production of GE salmon is designed to be antibiotic-free, addressing growing consumer demand for healthier seafood options.
First genetically engineered animal approved for sale
AquaBounty's GE Atlantic salmon was the first genetically engineered animal approved for sale by the U.S. Food and Drug Administration (FDA) in 2015. This milestone represents a significant achievement in biotechnology and positions AquaBounty as a leader in the field. The approval has opened the door for AquaBounty to market its products in multiple regions, including the U.S., Canada, and Brazil, enhancing its competitive advantage in the seafood market.
Solutions addressing food security and climate change
The company addresses critical global challenges such as food security and climate change. By increasing the efficiency of salmon production, AquaBounty contributes to the supply of protein-rich food, which is essential for feeding a growing global population. The GE salmon requires less feed and water compared to traditional methods, which helps mitigate the impact of aquaculture on the environment. This aligns with global sustainability goals and appeals to environmentally conscious consumers.
| Value Proposition | Description | Impact on Financials |
|---|---|---|
| Sustainable Practices | Production of antibiotic-free, GE salmon. | Potentially lower operational costs and increased market demand. |
| Regulatory Approval | First GE animal approved for sale. | Competitive advantage and market differentiation. |
| Food Security | Contributes to sustainable food production. | Increased sales opportunities in emerging markets. |
| Climate Change Mitigation | Efficient use of resources in salmon farming. | Enhanced brand reputation and customer loyalty. |
As of September 30, 2024, AquaBounty reported product revenues of $705,262, a decrease of 63% compared to $1,919,409 during the same period in 2023. This decline was attributed to the sale of its Indiana farm, impacting the sale of GE Atlantic salmon . The total operating loss for the nine months ended September 30, 2024, was $62,829,544, which represents a 231% increase compared to the $18,999,558 loss in the same period of the previous year . The company’s accumulated deficit reached $285,656,698 by September 30, 2024 .
In addition, AquaBounty reported a significant long-lived asset impairment of $48.7 million during the nine months ended September 30, 2024, reflecting the challenges faced in its operational strategy . The company also recognized a net loss of $65,076,820 for the same period, a stark increase from $19,132,927 in the previous year . These financial figures highlight the impact of strategic decisions on the company's overall performance and its commitment to innovation in sustainable aquaculture practices.
AquaBounty Technologies, Inc. (AQB) - Business Model: Customer Relationships
Direct sales to seafood distributors and retailers
AquaBounty Technologies primarily engages in direct sales of its genetically engineered (GE) Atlantic salmon to seafood distributors and retailers. For the nine months ended September 30, 2024, the company reported total product revenues of $705,262, a decrease of 63% compared to $1,919,409 in the same period of 2023. This decline was attributed mainly to reduced sales of GE Atlantic salmon following the sale of its Indiana farm.
| Period | Product Revenues ($) | GE Atlantic Salmon Revenue ($) | Non-GE Atlantic Salmon Revenue ($) |
|---|---|---|---|
| Q3 2024 | 47,812 | 0 | 32 |
| Q3 2023 | 733,133 | 632,000 | 89 |
| 9M 2024 | 705,262 | 395,000 | 292 |
| 9M 2023 | 1,919,409 | 1,779,000 | 124 |
Engagement through educational outreach on genetically engineered products
AquaBounty engages with its customers through educational outreach initiatives to inform them about the benefits and safety of genetically engineered products. This strategy is crucial in addressing public concerns and enhancing market acceptance. The company has invested in marketing programs that aim to educate distributors and consumers about the advantages of its products, which is reflected in its sales and marketing expenses of $187,832 for the nine months ended September 30, 2024, down from $584,401 in the same period of 2023.
Support for regulatory compliance and product safety
AquaBounty emphasizes compliance with regulatory standards as part of its customer relationship strategy. The company continues to work closely with regulatory bodies to ensure that its products meet safety and environmental standards. As of September 30, 2024, AquaBounty had incurred significant expenses related to compliance efforts, with general and administrative costs amounting to $7,834,931 for the nine months ended September 30, 2024.
| Category | Q3 2024 ($) | 9M 2024 ($) | 9M 2023 ($) |
|---|---|---|---|
| General and Administrative Expenses | 1,887,814 | 7,834,931 | 8,402,876 |
| Sales and Marketing Expenses | 44,167 | 187,832 | 584,401 |
AquaBounty Technologies, Inc. (AQB) - Business Model: Channels
Direct sales to grocery chains and seafood markets
AquaBounty Technologies primarily markets its products, including genetically engineered (GE) Atlantic salmon, through direct sales to grocery chains and seafood markets. As of September 30, 2024, AquaBounty reported product revenues of $705,262 for the nine months ended, which reflects a 63% decrease from $1,919,409 in the prior year. This decline is largely attributed to the sale of their Indiana farm, which had previously contributed significantly to their GE Atlantic salmon sales. The company aims to establish relationships with grocery chains to enhance market penetration for its products.
Online platforms for marketing and awareness
The company utilizes online platforms to enhance marketing and raise awareness of its products. While specific financial metrics for online sales are not detailed, AquaBounty's overall sales and marketing expenses have decreased to $187,832 for the nine months ended September 30, 2024, down from $584,401 in the same period in 2023, indicating a strategic shift in marketing efforts. This reduction reflects AquaBounty's focus on optimizing its marketing spend while still leveraging online channels to reach consumers effectively.
Partnerships with food service providers
AquaBounty has established partnerships with food service providers to distribute its products more effectively. As of September 30, 2024, the company reported a significant focus on partnerships to drive sales amid operational changes, including the decision to wind down operations at its Indiana farm. These partnerships are crucial for AquaBounty to maintain a stable distribution network, especially as it transitions towards selling conventional Atlantic salmon and related products from its remaining farms. The company aims to build long-term relationships with food service providers to secure a consistent demand for its offerings.
| Channel | Revenue (2024) | Revenue (2023) | Change (%) |
|---|---|---|---|
| Direct Sales | $705,262 | $1,919,409 | -63% |
| Sales and Marketing Expenses | $187,832 | $584,401 | -68% |
| Product Costs | $6,542,437 | $11,446,158 | -43% |
This table summarizes the key financial figures related to AquaBounty's channels, illustrating the company's current performance and strategic adjustments in its business model as of 2024. The focus on partnerships and direct sales is evident in the revenue shifts, as AquaBounty navigates a challenging market environment while seeking to optimize its operational efficiency and market reach.
AquaBounty Technologies, Inc. (AQB) - Business Model: Customer Segments
Retail grocery stores seeking sustainable seafood options
Retail grocery stores are a key customer segment for AquaBounty Technologies. These stores are increasingly focused on offering sustainable seafood options to meet consumer demand for environmentally friendly products. AquaBounty's genetically engineered (GE) Atlantic salmon is marketed as a sustainable alternative to traditional salmon, appealing to grocery chains looking to enhance their product offerings.
According to industry reports, the global sustainable seafood market is projected to reach approximately $200 billion by 2025, with a compound annual growth rate (CAGR) of around 10%. This growth is driven by rising consumer awareness regarding sustainability and health benefits associated with seafood consumption. In 2024, AquaBounty aims to capture a larger share of this market segment by partnering with major grocery chains in North America and beyond.
Restaurants focused on quality and sustainability
Another significant customer segment for AquaBounty includes restaurants that prioritize quality and sustainability in their menu offerings. As dining establishments increasingly emphasize farm-to-table practices and responsible sourcing, AquaBounty's GE Atlantic salmon provides a high-quality, consistent product that meets these criteria.
In 2024, AquaBounty reported that approximately 40% of its product sales were directed towards the food service sector, which includes restaurants and catering services. The growing trend towards sustainability in the restaurant industry is reflected in the National Restaurant Association's 2024 forecast, which indicates that 75% of restaurant operators are incorporating sustainable sourcing practices into their operations. This shift presents AquaBounty with a unique opportunity to expand its customer base within this segment.
Consumers interested in innovative food technologies
Consumers who are interested in innovative food technologies represent a vital customer segment for AquaBounty. This group typically includes health-conscious individuals, tech-savvy consumers, and those intrigued by genetically modified organisms (GMOs) and their benefits. AquaBounty markets its GE Atlantic salmon as a product of advanced biotechnology, designed to grow faster and produce less environmental impact compared to traditional salmon farming methods.
As of 2024, research indicates that approximately 25% of consumers are open to purchasing GMO food products, provided they are informed about the benefits. AquaBounty plans to leverage this trend by enhancing consumer education regarding the safety and advantages of its products. This strategy includes marketing campaigns that highlight the environmental benefits of its salmon, such as reduced feed conversion ratios and lower greenhouse gas emissions compared to conventional salmon farming.
| Customer Segment | Market Size (2024) | Growth Rate (CAGR) | Key Trends |
|---|---|---|---|
| Retail Grocery Stores | $200 billion | 10% | Sustainable seafood options |
| Restaurants | 40% of product sales | N/A | Farm-to-table sourcing |
| Consumers interested in technology | 25% acceptance of GMO products | N/A | Health and sustainability awareness |
AquaBounty Technologies, Inc. (AQB) - Business Model: Cost Structure
High operational costs associated with aquaculture practices
AquaBounty Technologies incurs significant operational costs primarily related to its aquaculture practices. For the nine months ended September 30, 2024, total product costs amounted to approximately $6.54 million, a decrease from $11.45 million in the same period of 2023, reflecting a 43% reduction in operational expenses due to the sale of the Indiana farm.
Significant research and development expenditures
Research and development (R&D) expenditures are a crucial part of AquaBounty's cost structure, reflecting the company's commitment to innovation in aquaculture. In the nine months ended September 30, 2024, R&D expenses were approximately $236,384, down from $485,532 in the same period of 2023, indicating a 51% reduction as part of cost-cutting measures.
Ongoing construction costs for aquaculture facilities
The construction of large-scale aquaculture facilities, particularly the farm in Pioneer, Ohio, has incurred substantial costs. As of September 30, 2024, AquaBounty reported $77.1 million in construction in progress for the Ohio facility. However, construction activities were paused due to funding challenges, necessitating new financing to complete the project.
| Cost Category | 2024 (9 Months Ended) | 2023 (9 Months Ended) | Change (%) |
|---|---|---|---|
| Total Product Costs | $6,543,437 | $11,446,158 | -43% |
| Research and Development Expenses | $236,384 | $485,532 | -51% |
| Construction in Progress (Ohio Farm) | $77,089,742 | $147,755,336 | -48% |
As of September 30, 2024, AquaBounty had total liabilities of approximately $17.71 million, and the company continues to face challenges regarding its ability to fund ongoing operations and complete construction projects.
AquaBounty Technologies, Inc. (AQB) - Business Model: Revenue Streams
Sales of genetically engineered Atlantic salmon
AquaBounty Technologies primarily generates revenue through the sale of its genetically engineered (GE) Atlantic salmon, known as AquAdvantage salmon. For the nine months ended September 30, 2024, the revenue from GE Atlantic salmon was approximately $395,157, a significant decrease from $1,779,045 for the same period in 2023, reflecting a decline of about 78%.
In the three months ended September 30, 2024, product revenue from GE Atlantic salmon was $0, compared to $632,307 for the same period in 2023, indicating a complete halt in sales due to operational changes following the sale of their Indiana farm.
Revenue from conventional salmon and related products
In addition to GE salmon, AquaBounty has started to increase its revenue from conventional salmon products. For the nine months ended September 30, 2024, revenue from non-GE Atlantic salmon amounted to approximately $292,000, up from $124,000 for the same period in 2023, representing a growth of 135%.
The total product revenue for the nine months ended September 30, 2024, was $705,262, which is a 63% decrease from $1,919,409 for the same period in 2023. This decline is mainly attributed to the operational shifts and the sale of the Indiana farm, which previously contributed to their GE salmon production.
Potential government grants and funding for research initiatives
AquaBounty Technologies is also eligible for various government grants and funding aimed at supporting agricultural innovation. Notably, they have access to funding from the Atlantic Canada Opportunities Agency (ACOA) and the Department of Fisheries and Oceans (DFO) in Canada. As of September 30, 2024, AquaBounty had borrowed approximately C$612,000 ($452,000) to support productivity and scale-up for its Rollo Bay farm.
In addition, AquaBounty's Canadian subsidiary is eligible for up to C$1.9 million ($1.4 million) under the DFO Term Loan for financing new equipment. Such funding is critical as the company navigates its transition and seeks to stabilize its revenue streams amidst operational changes.
| Revenue Source | Revenue (9 Months Ended Sept 30, 2024) | Revenue (9 Months Ended Sept 30, 2023) | Change (%) |
|---|---|---|---|
| GE Atlantic Salmon | $395,157 | $1,779,045 | -78% |
| Non-GE Atlantic Salmon | $292,000 | $124,000 | +135% |
| Total Product Revenue | $705,262 | $1,919,409 | -63% |
| Government Grants (ACOA) | Up to C$612,000 ($452,000) | N/A | N/A |
| DFO Term Loan | Up to C$1.9 million ($1.4 million) | N/A | N/A |
Updated on 16 Nov 2024
Resources:
- AquaBounty Technologies, Inc. (AQB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of AquaBounty Technologies, Inc. (AQB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View AquaBounty Technologies, Inc. (AQB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.