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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to _____________________

Commission File Number: 001-36426

____________

AquaBounty Technologies, Inc.

(Exact name of registrant as specified in its charter)


Delaware	04-3156167
(State or other jurisdiction of ‎incorporation or organization)	(I.R.S. Employer ‎Identification No.)

233 Ayer Road, Suite 4

Harvard, Massachusetts 01451

(978) 648-6000

(Address and telephone number of the registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	AQB	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 (§232.405 of this chapter) of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o	Non-accelerated filer	x	Smaller reporting company	x
						Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

At October 28, 2025, the registrant had 3,877,695 shares of common stock, par value $0.001 per share (“Common Shares”) outstanding.

‎

AquaBounty Technologies, Inc.
FORM 10-Q
For the Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	24
Signatures		25

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q of AquaBounty Technologies, Inc. (“AquaBounty,” the “Company,” “we,” “us” or “our”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that involve significant risks and uncertainties about AquaBounty. All statements other than statements of historical fact are forward-looking statements, and AquaBounty may use words such as “expect,” “anticipate,” “project,” “intend,” “plan,” “aim,” “believe,” “seek,” “estimate,” “can,” “focus,” “will,” and “may,” similar expressions and the negative forms of such expressions to identify such forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties, and other factors, many of which are outside of our control, which could cause our actual results, performance, or achievements to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: our history of net losses and the likelihood of future net losses; our ability to continue as a going concern; our ability to raise additional funds, including from the sale of non-current assets, in sufficient amounts on a timely basis, on acceptable terms, or at all; our ability to retain and reengage key vendors and engage additional vendors, as needed; our ability to obtain approvals and permits to construct and operate our farms without delay; our ability to finance our Ohio Farm Project (as defined below) through the placement of municipal bonds, which may require restrictive debt covenants that could limit our control over the farm’s operation and restrict our ability to utilize any cash that the farm generates; risks related to potential strategic acquisitions, investments or mergers; risks of disease outbreaks in Atlantic salmon farming; our ability to efficiently and cost-effectively produce and sell salmon at large commercial scale; security breaches, cyber-attacks and other disruptions could compromise our information, or expose us to fraud or liability, or interrupt our operations; any further write-downs of the value of our assets; business, political, or economic disruptions or global health concerns; adverse developments affecting the financial services industry; our ability to use net operating losses and other tax attributes, which may be subject to certain limitations; volatility in the price of our shares of common stock; our ability to maintain our listing on the Nasdaq Stock Market LLC (“Nasdaq”); an active trading market for our common stock may not be sustained; our status as a “smaller reporting company” and a “non-accelerated filer” may cause our shares of common stock to be less attractive to investors; any issuance of preferred stock with terms that could dilute the voting power or reduce the value of our common stock; provisions in our corporate documents and Delaware law could have the effect of delaying, deferring, or preventing a change in control of us; our expectation of not paying cash dividends in the foreseeable future; and other risks and uncertainties discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

For additional disclosure regarding these and other risks faced by AquaBounty, see disclosures contained in AquaBounty’s public filings with the SEC, including the “Risk Factors” in the Company’s Annual Report on Form 10-K and this Quarterly Report on Form 10-Q. You should consider these factors in evaluating the forward-looking statements included in this Quarterly Report on Form 10-Q and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and AquaBounty undertakes no obligation to update such statements as a result of new information, except as required by law.

‎

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AquaBounty Technologies, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


		As of
	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	951,434	$	230,362
Prepaid expenses and other current assets		519,027		292,018
Current assets held for sale		5,000		10,819,909
Total current assets		1,475,461		11,342,289

Property, plant and equipment, net		22,668,000		22,668,000
Right of use assets, net		30,330		51,509
Total assets	$	24,173,791	$	34,061,798

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities	$	3,069,766	$	10,104,853
Accrued employee compensation		914,067		977,088
Current debt		7,910,684		1,261,039
Other current liabilities		30,330		28,527
Current liabilities held for sale		8,741		3,830,041
Total current liabilities		11,933,588		16,201,548

Long-term lease obligations		—		22,982
Long-term debt, net		—		1,996,558
Total liabilities		11,933,588		18,221,088

Commitments and contingencies (Note 11)

Stockholders' equity:
Common stock, $0.001 par value, 75,000,000 shares authorized;
3,877,695 and 3,865,778 shares outstanding at September 30, 2025 and
December 31, 2024, respectively		3,878		3,866
Additional paid-in capital		386,361,538		386,297,611
Accumulated other comprehensive loss		—		(688,229)
Accumulated deficit		(374,125,213)		(369,772,538)
Total stockholders' equity		12,240,203		15,840,710

Total liabilities and stockholders' equity	$	24,173,791	$	34,061,798

See accompanying notes to these condensed consolidated financial statements.

‎

AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2025		2024		2025		2024

Costs and expenses
Sales and marketing	$	—	$	44,167		6,613		187,502
Research and development		—		70,300		—		220,916
General and administrative		1,412,112		1,501,811		4,741,144		7,029,547
Asset impairment, net		68,547		—		1,287,413		26,264,943
Total costs and expenses		1,480,659		1,616,278		6,035,170		33,702,908

Operating loss		(1,480,659)		(1,616,278)		(6,035,170)		(33,702,908)

Other income (expense)
Interest expense		—		(1,004,120)		(224,235)		(2,148,397)
Loan forgiveness		—		—		2,008,046		—
Other expense, net		(3,671)		(17,813)		(11,119)		(27,136)
Total other income (expense)		(3,671)		(1,021,933)		1,772,692		(2,175,533)

Loss from continuing operations		(1,484,330)		(2,638,211)		(4,262,478)		(35,878,441)

Income (loss) from discontinued operations		103,557		(766,120)		(90,197)		(29,198,379)

Net loss	$	(1,380,773)	$	(3,404,331)	$	(4,352,675)	$	(65,076,820)

Other comprehensive income (loss)
Foreign currency translation gain (loss)		—		65,701		688,229		(107,941)

Comprehensive loss	$	(1,380,773)	$	(3,338,630)	$	(3,664,446)	$	(65,184,761)


Basic and diluted net (loss) income per share
from continuing operations	$	(0.38)	$	(0.68)	$	(1.10)	$	(9.30)
from discontinued operations		0.02		(0.20)		(0.02)		(7.57)
Total basic and diluted net loss per share	$	(0.36)	$	(0.88)	$	(1.12)	$	(16.87)

Weighted average number of common shares
- basic and diluted		3,877,695		3,865,778		3,872,456		3,858,642

See accompanying notes to these condensed consolidated financial statements.

‎

AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

See accompanying notes to these condensed consolidated financial statements.


	Common stock issued and outstanding		Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total
Balance at December 31, 2023		3,847,022	$	3,847	$	385,998,213	$	(405,464)	$	(220,579,878)	$	165,016,718
Net loss										(11,158,248)		(11,158,248)
Other comprehensive loss								(116,307)				(116,307)
Share-based compensation		10,422		10		105,145						105,155
Balance at March 31, 2024		3,857,444	$	3,857	$	386,103,358	$	(521,771)	$	(231,738,126)	$	153,847,318
Net loss										(50,514,241)		(50,514,241)
Other comprehensive loss								(57,335)				(57,335)
Share-based compensation		8,334		9		68,897						68,906
Balance at June 30, 2024		3,865,778	$	3,866	$	386,172,255	$	(579,106)	$	(282,252,367)	$	103,344,648
Net loss										(3,404,331)		(3,404,331)
Other comprehensive income								65,701				65,701
Share-based compensation		—		—		65,632						65,632
Balance at September 30, 2024		3,865,778	$	3,866	$	386,237,887	$	(513,405)	$	(285,656,698)	$	100,071,650


	Common stock issued and outstanding		Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total
Balance at December 31, 2024		3,865,778	$	3,866	$	386,297,611	$	(688,229)	$	(369,772,538)	$	15,840,710
Net income										401,135		401,135
Other comprehensive income								688,229				688,229
Share-based compensation		3,583		3		40,158						40,161
Balance at March 31, 2025		3,869,361	$	3,869	$	386,337,769	$	—	$	(369,371,403)	$	16,970,235
Net loss										(3,373,037)		(3,373,037)
Share-based compensation		8,334		9		16,718						16,727
Balance at June 30, 2025		3,877,695	$	3,878	$	386,354,487	$	—	$	(372,744,440)	$	13,613,925
Net loss										(1,380,773)		(1,380,773)
Share-based compensation		—		—		7,051						7,051
Balance at September 30, 2025		3,877,695	$	3,878	$	386,361,538	$	—	$	(374,125,213)	$	12,240,203

‎

AquaBounty Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2025		2024
Operating activities
Net loss	$	(4,352,675)	$	(65,076,820)
Adjustment to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		—		868,292
Share-based compensation		63,939		239,693
Long-lived asset impairment		1,287,413		48,733,222
Loan forgiveness		(2,008,046)		—
Other non-cash items		(100,182)		43,393
Changes in operating assets and liabilities:
Inventory		—		1,265,142
Prepaid expenses and other assets		(344,671)		1,041,947
Accounts payable and accrued liabilities		(44,144)		344,772
Accrued employee compensation		(63,021)		(208,310)
Net cash used in operating activities		(5,561,387)		(12,748,669)

Investing activities
Purchases of and deposits on property, plant and equipment		—		(2,673,631)
Proceeds from asset sales		7,105,884		9,511,625
Net cash provided by investing activities		7,105,884		6,837,994

Financing activities
Proceeds from issuance of debt		—		6,759,257
Repayment of term debt		(832,194)		(9,547,358)
Net cash used in financing activities		(832,194)		(2,788,101)

Effect of exchange rate changes on cash and cash equivalents		8,769		(4,659)
Net change in cash and cash equivalents		721,072		(8,703,435)
Cash and cash equivalents at beginning of period		230,362		9,203,869
Cash and cash equivalents at end of period	$	951,434	$	500,434

Supplemental disclosure of cash flow information and non-cash transactions:
Interest paid in cash from continuing operations	$	—	$	2,111,160
Interest paid in cash from discontinued operations	$	16,903	$	81,091
Non-cash conversion of accounts payable to current debt	$	7,386,235	$	—
Property and equipment included in accounts payable and accrued liabilities	$	2,565,881	$	9,473,373

See accompanying notes to these condensed consolidated financial statements.

‎

AquaBounty Technologies, Inc.

Notes to the condensed consolidated financial statements

(unaudited)

1. Nature of Business and Organization

AquaBounty Technologies, Inc. (the “Parent” and, together with its wholly owned subsidiaries, the “Company”) was incorporated in December 1991 in the State of Delaware for the purpose of conducting research and development of the commercial viability of a group of proteins commonly known as antifreeze proteins. In 1996, the Parent obtained the exclusive licensing rights for a gene construct (transgene) used to create a breed of farm-raised Atlantic salmon that exhibit growth rates that are substantially faster than conventional Atlantic salmon.

The Company has historically pursued a growth strategy that included the construction of large-scale recirculating aquaculture system (“RAS”) farms for producing its genetically engineered Atlantic salmon (“GE Atlantic salmon”). The Company had commenced construction of a 10,000 metric ton farm in Pioneer, Ohio (“Ohio Farm Project”), but paused the construction in June 2023, as the cost estimate to complete the farm continued to substantially increase due to inflation and other factors. Further, these cost increases impaired the Company’s ability to pursue municipal bond financing, which was a necessary component of its funding strategy. The Company subsequently engaged an investment bank to pursue a range of funding and strategic alternatives and to assist management in the prioritization of the Company’s core assets. These efforts resulted in the sale of the Company’s grow-out farm in Indiana (“Indiana Farm”) in July 2024, recurring sales throughout the remainder of 2024 and the first nine months of 2025 of selected equipment originally intended for the Ohio Farm Project (“Ohio Equipment Assets”), and the sale of the Company’s Canadian subsidiary, including the broodstock farms owned by the Canadian subsidiary in Prince Edward Island, Canada (“Canadian Farms”) and its intellectual property for GE Atlantic salmon, along with trademarks and patents (“Corporate IP”) in March 2025. After completion of these transactions, the Company’s primary remaining asset is its investment in the Ohio Farm Project, consisting of the remaining Ohio Equipment Assets and the land and construction in process (“Ohio Farm Site”). The Company continues to work with its investment bank to identify the optimal path forward for realizing the potential of this asset, either through new investment, partnership or other strategic options.

2. Going Concern Uncertainty

Since inception, the Company has incurred cumulative net losses of $374 million and expects that this will continue for the foreseeable future. As of September 30, 2025, the Company had $951 thousand in cash and cash equivalents on its condensed consolidated balance sheet.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital, including its ability to sell assets to generate liquidity to fund ongoing operations, and there can be no assurance that such capital will be available in sufficient amounts, on a timely basis, or on terms acceptable to the Company, or at all. This raises substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.

3. Basis of Presentation

The unaudited interim condensed consolidated financial statements include the accounts of AquaBounty Technologies, Inc. and its wholly owned direct subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) consistent with those applied in, and should be read in conjunction with, the Company’s audited financial statements and related notes for the year ended December 31, 2024. The unaudited interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of September 30, 2025, results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. The unaudited interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, as allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading.

Discontinued Operations

As noted above, the Company sold its Indiana Farm in July 2024 and its Canadian Farms in March 2025. These farms have been designated as discontinued operations in these interim condensed consolidated financial statements for all periods presented (see Note 5).

Net Loss Per Share

Basic and diluted net loss per share available to common stockholders has been calculated by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Basic net loss per share is based solely on the number of shares of common stock outstanding during the period. The calculation of fully diluted net loss per share would include the number of shares of common stock issuable upon the exercise of vested options with an exercise price less than the fair value of the common stock and unvested stock awards, less the hypothetical number of shares of common stock that could be repurchased with stock option proceeds and unrecognized stock compensation. For all periods presented, all potential shares of common stock are considered anti-dilutive and are excluded from the calculation of diluted net loss per share.

The following table contains the Company’s potentially dilutive securities:


	Three Months Ended September 30,
Weighted Average Outstanding	2025	2024
Stock options	45,894	72,375
Unvested stock awards	-	14,831


	Nine Months Ended September 30,
Weighted Average Outstanding	2025	2024
Stock options	51,198	73,590
Unvested stock awards	5,330	22,206

Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2024-03, Disaggregation of Income Statement Expenses, to enhance the transparency of certain expense disclosures. The update requires disclosure of specific expense categories in the notes to the financial statements at interim and annual reporting periods. The update requires disaggregated information about certain prescribed expense categories underlying any relevant income statement expense caption. The amendments in this update are effective for public entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The amendments may be adopted either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impacts of this update and plans to adopt these amendments for annual disclosures for the year ended December 31, 2027, and interim disclosures in the year ended December 31, 2028.

Management does not expect any other recently issued, but not yet effective, accounting standards to have a material effect on its results of operations or financial condition.

4. Risks and Uncertainties

The Company is subject to risks and uncertainties associated with its current operations. Such risks and uncertainties include, but are not limited to: (i) timing of securing additional sources of cash; (ii) realization of asset values different than those recorded on the Company’s consolidated balance sheet; and (iii) stockholder approval of any plans made by the Company’s management and board of directors that require stockholder approval.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. This risk is mitigated by the Company’s policy of maintaining all balances with highly rated financial institutions and investing in cash equivalents with maturities of less than 90 days. The Company’s cash balances may at times exceed insurance limitations.

5. Discontinued Operations and Assets Held for Sale

In July 2024, the Company sold its Indiana Farm for a sale price of $9.5 million less transaction expenses of $305 thousand, which included certain Ohio Equipment Assets with a carrying value of $13.0 million that had been purchased for the Company’s Ohio Farm Project. In December 2024, the Company announced the winddown of its Canadian fish rearing operations and sold its Canadian Farms in March 2025 for a sale price of $5.2 million, including the assumption of $3.2 million in outstanding loans, less transaction expenses of $216 thousand. These decisions by the Company represented a strategic shift that has had a major effect on the Company’s operations and financial results. As a result, the operations of the Indiana Farm and the Canadian Farms have been reclassified as discontinued operations on a retrospective basis for all periods presented. Accordingly, the assets and liabilities of these operations are separately reported as “assets and liabilities held for sale” as of September 30, 2025 and December 31, 2024.

Included in the table for Current Assets Held for Sale is $5 thousand for September 30, 2025 and $6.3 million for December 31, 2024 of the Ohio Equipment Assets. During the nine months ended September 30, 2025, the Company sold certain Ohio Equipment Assets for gross proceeds of $5.0 million. The remaining Ohio Equipment Assets were determined to have a fair value of $5 thousand at September 30, 2025, and a cumulative non-cash impairment charge of $1.3 million has been recorded in continuing operations for the nine month period.

The table below presents the major areas of the balance sheet that constitute assets and liabilities held for sale.


	September 30,		December 31,
	2025		2024
Current Assets
Prepaid and other current assets	$	—	$	65,030
Property, plant and equipment, net		5,000		10,754,879
Total current assets held for sale	$	5,000	$	10,819,909
Current Liabilities
Accounts payable and accrued expenses	$	—	$	106,590
Accrued employee compensation		—		54,583
Current debt		—		3,260,005
Other current liabilities		8,741		408,863
Total current liabilities held for sale	$	8,741	$	3,830,041

The two tables below present the major areas of the income statement and the cash flow statement, respectively, that constitute discontinued operations.


	Three months ended September 30,				Nine months ended September 30,
		2025		2024		2025		2024
Revenue	$	—	$	47,812	$	—	$	705,262
Costs and expenses
Product costs		—		425,057		—		6,542,437
Sales and marketing		—		—		—		330
Research and development		—		(18,207)		—		15,468
General and administrative		(103,557)		386,003		72,929		805,384
Long-lived impairment		—		—		—		22,468,279
Operating income (loss)		103,557		(745,041)		(72,929)		(29,126,636)
Other expense		—		(21,079)		(17,268)		(71,743)
Income (loss) from discontinued ops	$	103,557	$	(766,120)	$	(90,197)	$	(29,198,379)


	Nine months ended September 30,
		2025		2024
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	$	—	$	855,998
Long-lived asset impairment		—		22,468,279
Other non-cash items		(100,182)		3,518
Changes in working capital		(100,811)		1,400,135
Cash flows from investing activities
Purchases of and deposits on property, plant and equipment		—		(249,178)
Cash flows from financing activities
Proceeds from issuance of debt		—		259,257
Repayment of term debt		(32,194)		(155,595)

6. Prepaid and Other Current Assets

Major classifications of prepaid and other current assets are summarized as follows:


	September 30, 2025		December 31, 2024
Receivables	$	2,453	$	—
Prepaid insurance		376,515		203,999
Prepaid other		140,059		88,019
Total prepaid expenses and other current assets	$	519,027	$	292,018

7. Property, Plant and Equipment

Major classifications of property, plant and equipment are summarized as follows:


	September 30, 2025		December 31, 2024
Land	$	641,345	$	641,345
Construction in process		22,026,655		22,026,655
Total property and equipment	$	22,668,000	$	22,668,000
Less accumulated depreciation and amortization		—		—
Property, plant and equipment, net	$	22,668,000	$	22,668,000

Depreciation expense was $0 and $857 thousand, for the nine months ended September 30, 2025 and 2024, respectively.

The Company’s decision in 2024 to sell certain Ohio Equipment Assets, the Indiana Farm and the Canadian Farms to provide additional liquidity indicated the carrying amount of all Ohio Farm Project property, plant and equipment may not be recoverable. The Company compared future anticipated undiscounted cash flows for the different Ohio Farm Project asset groups to the carrying value of such asset groups, noting that the carrying value of these assets exceeded the cash flows. Therefore, the Company proceeded to calculate the fair values of these different asset groups, representing a Level 3 fair value measurement. The Company recorded non-cash impairment charges of $101.9 million against continuing operations during 2024, in addition to reclassifying $6.3 million of Ohio Equipment Assets to Assets Held for Sale as of December 31, 2024.

As of September 30, 2025, construction in process related only to the Ohio Farm Site.

8. Debt


	Interest ‎rate	Monthly ‎repayment	Maturity ‎date	September 30, 2025		December 31, 2024
ACOA AIF Grant	0%	Royalties		$	—	$	1,996,558
Term Note	0%	200,000	Dec 2025		524,449		1,261,039
Vendor Note	8%	—	Jun 2026		7,386,235		—
Total debt				$	7,910,684	$	3,257,597
less: current portion					(7,910,684)		(1,261,039)
Long-term debt, net				$	—	$	1,996,558

On February 14, 2025, the Atlantic Canada Opportunities Agency (“ACOA”) terminated the outstanding loan with the Company’s Canadian subsidiary under its Atlantic Innovation Fund (“AIF”) Grant in the amount of C$2.9 million ($2.0 million). The AIF Grant was awarded in 2009 and provided a contribution towards the funding of a research and development project. Repayment was to be based on royalties from the resulting products from the research, however no product from the research was commercialized.

In October 2024, the Company entered into a secured promissory note (“Term Note”) for $1.3 million with a vendor for services provided during 2024. The Term Note is secured by the assets of the Company’s Ohio Farm Project and is due in full on December 31, 2025, with two intermediate scheduled payments. On March 18, 2025, an amendment to the Term Note was executed to alter the amount and timing of the intermediate payments. The Term Note carries no interest, except in the event of a default, in which case any amount due for payment will be assessed accrued interest at 3% per annum. On July 22, 2025, the Term Note was again amended to alter the timing of the remaining payments and at September 30, 2025, the Company is in compliance with the terms of the loan as amended.

On June 11, 2025, the Company converted $7.4 million of outstanding accounts payable with a vendor into a secured promissory note (“Vendor Note”). The Vendor Note is secured by the assets of the Company’s Ohio Farm Site, has a 12-month term and carries an 8% interest rate, with the first six-months interest free.

The Company recognized interest expense of $0 and $1.8 million for the nine months ended September 30, 2025 and 2024, respectively, on its interest-bearing debt.

Principal payments due on the debt are as follows:


	Total
2025 remaining	$	524,449
2026		7,386,235
2027		—
2028		—
2029		—
Thereafter		—
Total	$	7,910,684

9. Leases

The tables below summarize the Company’s outstanding lease liabilities at September 30, 2025 and December 31, 2024 and its lease expense for the nine months ended September 30, 2025 and 2024:


		September 30,		December 31,
		2025		2024
Operating lease right-of-use assets, net	$	30,330	$	51,509

Other current liabilities		30,330		28,527
Long-term lease obligations		-		22,982
Total operating lease liabilities	$	30,330	$	51,509

Weighted average remaining lease term		1.0 years		1.8 years
Weighted average discount rate		8%		8%


Remaining payments under leases:
Year		Amount
2025 remaining	$	8,185
2026		21,826
Thereafter		—
Total lease payments		30,011
Less: imputed interest		319
Total operational lease liabilities	$	30,330


	Three Months Ended September 30,					Nine Months Ended September 30,
		2025		2024		2025	2024
Operating lease expense	$	7,870	$	8,803	$	23,611

AQUABOUNTY TECHNOLOGIES INC 10-Q