UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________



SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

_______________

 

Filed by the Registrant  

Filed by a party other than the Registrant  

Check the appropriate box:

 

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12§240.14a-12

AquaBounty Technologies, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):



No fee required.

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 



  


LOGO

Picture 3

NOTICE OF SPECIALANNUAL MEETING OF STOCKHOLDERS

OCTOBER 12, 2023MAY 23, 2024

A special

The 2024 annual meeting of stockholders (the “Special Meeting”) of AquaBounty Technologies, Inc. (“we,” “our,“us,” “AquaBounty” or the “Company”) will be held on October 12, 2023,May 23, 2024, at 8:30 a.m., Eastern Time, at 2 Mill & Main Place,233 Ayer Road, Suite 395, Maynard,4, Harvard, MA 01754,01451, for the following purposes:



To approve an amendment to our Third Amended and Restated Certificate of Incorporation, as amended, to approve a reverse stock split (the “Reverse Stock Split”) of our common stock, par value $0.001 per share (“Common Stock”), and an associated reduction in the number of shares of Common Stock we are authorized to issue (the “Authorized Capital Change”), from 150,000,000 to 75,000,000 (the “Reverse Stock Split Proposal”

·

to elect seven directors to serve on our Board of Directors (our “Board”) for a one-year term of office until the next annual meeting of stockholders, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal (“Proposal 1”);

·

to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (“Proposal 2”);

·

to approve, on a non-binding, advisory basis, the compensation paid to our named executive officers (“Proposal 3”); and

·

to transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.



To approve an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the Reverse Stock Split Proposal (the “Adjournment Proposal”).

After careful consideration, the board of directors of the Companyour Board recommends a vote “FOR” the Reverse Stock Splitelection of each of the director nominees listed in Proposal 1 and a vote “FOR” the Adjournment Proposal.Proposals 2 and 3.

Only stockholders of record at the close of business on August 21, 2023,March 25, 2024, the record date, are entitled to notice of and to vote at the Special Meetingannual meeting or at any postponement(s) or adjournment(s) thereof. A complete list of the stockholders of the Company entitled to vote at the Special Meeting will be open to the examination of any stockholder during ordinary business hours for a period of ten days prior to the Special Meeting for any purpose germane to the meeting at the Company’s principal place of business at 2 Mill & Main Place, Suite 395, Maynard, Massachusetts 01754.

Your vote is very important. Whether or not you plan to attend the Special Meeting,annual meeting, we hope you will vote as soon as possible. Please vote before the Special Meetingannual meeting using the Internet, telephone,Internet; telephone; or by signing, dating, and mailing the proxy card in the pre-paid envelope, to ensure that your vote will be counted. Please review the instructions on each of your voting options described in the accompanying proxy statement. Your proxy may be revoked before the vote at the Special Meetingannual meeting by following the procedures outlined in the accompanying proxy statement.

Sincerely,

Sylvia Wulf

Chief Executive Officer and Board Chair

Harvard, Massachusetts

April 5, 2024

Sylvia Wulf

President, Chief Executive Officer, and Board Chair

Maynard, Massachusetts

[●], 2023


Forward-Looking Statements

This proxy statement contains “forward-looking statements” as defined in 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 statementsrisks and uncertainties include, but are not limited to,to: our expectations regardinghistory of net losses and the market pricelikelihood of our Common Stock, our ability to regain and maintain compliance with the continued listing standards of the Nasdaq Capital Market, risks and benefits of approving or not approving the Reverse Stock Split Proposal, including with respect to making our Common Stock more attractive to a broader range of institutional and other investors, facilitating higher levels of institutional stock ownership and better enabling us to raise funds to help finance operations, our expectations regarding our actions to try to meet the Nasdaq Capital Market’s initial listing standards and submitting an application for our Common Stock to be listed on the Nasdaq Capital Market, our ability to meet our obligations under outstanding options and restricted stock units and our expectations regarding utilizing the relative increase in our authorized shares as a result of the Authorized Capital Change and Reverse Stock Split to raise additional capital, including with respect to financing the development and construction of additional farms, including the Ohio farm. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things,future net losses; our ability to continue as a going concern; the potential for delays and increased costs relatedour ability to construction ofraise substantial additional capital on acceptable terms, or at all, which is required to implement our new farms and renovations to existing farms; a failurebusiness strategy as planned, or at all; our ability to raise additional capitalfunds in sufficient amounts on a timely basis, on acceptable terms, or at all; our ability to attract and retain key personnel, including key management personnel; 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; increases in interest rates; delays and defects that may prevent the commencement of farm operations; rising inflation rates; our ability to finance our activities on acceptable terms; an inabilityOhio farm 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; our ability to manage our growth, which could adversely affect our business; risks related to potential strategic acquisitions, investments or mergers; high customer concentration, which exposes us to various risks faced by our major customers; ethical, legal, and social concerns about genetically engineered products; our ability to gain consumer acceptance of our genetically engineered Atlantic salmon (“GE Atlantic salmon” or “AquAdvantage salmon”) product; the quality and quantity of the salmon that we harvest; a significant fish mortality event in our broodstock or our production facilities; the loss of our GE Atlantic salmon broodstock; disease outbreaks, which can increase the cost of production and/or reduce production harvests; a shutdown, material damage to any of our farms, or lack of availability of power, fuel, oxygen, eggs, water, or other key components needed for our operations; our ability to efficiently and cost-effectively produce and sell salmon at large commercial scale; any contamination of our products, which could subject us to product liability claims and product recalls; security breaches, cyber-attacks and other disruptions could compromise our information, expose us to fraud or liability, or interrupt our operations; our dependence on third parties for the processing, distribution, and sale of our products; any write-downs of the value of our inventory; business, political, or economic disruptions or global health concerns; adverse developments affecting the financial services industry; industry volatility, including fluctuations in commodity prices of salmon; restrictions on Atlantic salmon farming in certain states; agreements that require us to pay a significant portion of our future revenue to third parties; our ability to receive additional government research grants and loans; international business risks, including exchange rate fluctuations; our ability to use net operating losses and other tax attributes, which may be subject to certain limitations; our ability to maintain regulatory approvals for our GE Atlantic salmon and our farm sites and obtain new approvals for farm sites and the sale of our products in sufficient volumeother markets; our ability to continue to comply with U.S. Food and atDrug Administration regulations and foreign regulations; significant regulations in the markets in which we intend to sell our products; significant costs complying with environmental, health, and safety laws and regulations, and any failure to comply with these laws and regulations; increasing regulation, changes in existing regulations, and review of existing regulatory decisions; lawsuits by non-governmental organizations and others who are opposed to the development or commercialization of genetically engineered products; risks related to the use of the term “genetically engineered,” which will need to be included as part of the acceptable costmarket name for our GE Atlantic salmon, and prices;bioengineering disclosures provided in accordance with U.S. Department of Agriculture regulations; competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours; any inabilitytheft, misappropriation, or reverse engineering of our products could result in competing technologies or products; our ability to protect our proprietary technologies and intellectual property and other proprietary rights and technologies; the effects of changes in applicable laws, regulations and policies;rights; our ability to secure any necessary regulatory approvals;enforce our intellectual property rights; volatility in the degree of market acceptanceprice of our products our failure to retain and recruit key personnel; the price and volatilityshares of our common stock; our ability to regain compliance or otherwise maintain compliance with theour listing requirements of, and remain listed on the Nasdaq Capital Market;Stock Market LLC (“Nasdaq”); our success in growing, or our perceived ability to grow, our GE Atlantic salmon successfully and profitably at commercial scale; an active trading market for our businesscommon stock may not be sustained; our status as a “smaller reporting company” and financial condition,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 impacteffect of general economic, public health, industrydelaying, deferring, or political conditionspreventing a change in control of us; our expectation of not paying cash dividends in the United States or internationally. 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 us,AquaBounty, see disclosures contained in ourAquaBounty’s public filings with the Securities and Exchange Commission,SEC, including the “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.10-Q. You should consider these factors in evaluating the forward-looking statements included in this proxy statement and not place undue reliance on such statements. The forward-looking statements are made as of the date hereof, and we undertakeAquaBounty undertakes no obligation to update such statements as a result of new information, except as required by law.



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LOGO

2 Mill & Main Place,Picture 5

233 Ayer Road, Suite 3954

Maynard,Harvard, Massachusetts 0175401451

PROXY STATEMENT

FOR THE SPECIALANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 12, 2023MAY 23, 2024

ABOUT THE SPECIALANNUAL MEETING

What is the Purpose of the Annual Meeting?

This Proxy Statementproxy statement and the accompanying form of proxy are being furnishedmade available to the stockholders of AquaBounty Technologies, Inc. (“we,” “us,” “AquaBounty” or the “Company”) in connection with the solicitation of proxies by theour Board of Directors (the “Board”) of AquaBounty Technologies, Inc. (“we,” “us,” “our,” “AquaBounty” or the “Company”Board”) for use at our specialannual meeting of stockholders (the “Special Meeting”) to be held on October 12, 2023,May 23, 2024, at 8:30 a.m., Eastern Time, at 2 Mill & Main Place,233 Ayer Road, Suite 395, Maynard,4, Harvard, MA 01754,01451, and any adjournments, continuations or postponements thereof.

What is the purpose of the Special Meeting?

The purpose of the Special Meeting is to act uponmeeting will be held for the following matters outlined in the notice of Internet Availability of Proxy Materials for the Special Meeting (the “Notice”):purposes:



To approve an amendment to our Third Amended and Restated Certificate of Incorporation, as amended (the “Charter”), to approve a reverse stock split (the “Reverse Stock Split”) of our common stock, par value $0.001 per share (“Common Stock”), and an associated reduction in the number of shares of Common Stock we are authorized to issue (the “Authorized Capital Change”), from 150,000,000 to 75,000,000 (the “Reverse Stock Split Proposal”

·

to elect seven directors to serve on our Board for a one-year term of office until the next annual meeting of stockholders, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal (“Proposal 1”);

·

to ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (“Proposal 2”);

·

to approve, on a non-binding, advisory basis, the compensation paid to our named executive officers (“Proposal 3”); and

·

to transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.



To approve an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the Reverse Stock Split Proposal (the “Adjournment Proposal”).

After careful consideration,the our Board recommends a vote “FOR” the Reverse Stock Split Proposal (Proposal 1); and “FOR” the Adjournment Proposal (Proposal 2).

As described in this Proxy Statement, our Board believes that it is in the best interestelection of each of the Company and its stockholders that the Board has the ability to effect,director nominees listed in its discretion, the Reverse Stock Split and the Authorized Capital Change to improve the price level of our Common Stock so that we are able to maintain continued compliance with the minimum bid price requirement and minimize the risk of delisting from the Nasdaq Capital Market.

What are the consequences if the Reverse Stock Split Proposal (Proposal 1) is not approved by stockholders?

If Proposal 1 is not approved by stockholders, our Common Stock may be delisted from the Nasdaq Capital Market. Any delisting from the Nasdaq Capital Market would likely result in further reductions in the market prices of our Common Stock, substantially limit the liquidity of our Common Stock, not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactionsvote “FOR” Proposals 2 and reduction in media and securities analyst coverage, and materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from the Nasdaq Capital Market could also have other negative results, including the potential loss of institutional investor interest, fewer business development3.



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opportunities, and the inability to raise additional required capital. In addition, the SEC has adopted rules governing “penny stocks” that impose additional burdens on broker-dealers trading in stock priced at or below $5.00 per share, unless listed on certain securities exchanges. In the event of a delisting, we would attempt to take actions to restore our compliance with the Nasdaq Capital Market’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement or prevent future non-compliance with the Nasdaq Capital Market’s listing requirements.

Where can I obtain proxy-related materials and/or what should I do if I received more than one copy of the Notice and proxy materials?

A copy of our proxy materials is available, free of charge, on www.envisionreports.com/AQB, the Securities and Exchange Commission (“SEC”) website at www.sec.gov, and our corporate website at www.aquabounty.com.www.aquabounty.com.  By referring to our website, we do not incorporate our website or any portion of that website by reference into this Proxy Statement.proxy statement. We have elected to provide access to our proxy materials over the Internet.  Accordingly, on or about September 1, 2023,April 12, 2024, we expect to send thea Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record as of the record date entitled to vote at the Special Meeting.our annual meeting.  The Notice will provide instructions on how to access our proxy statement and annual report, along with how to vote via the Internet or by telephone.  Instructions on how to request a printed copy of the proxy materials will also be provided in the Notice.  We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help minimize our costs associated with printing and distributing our proxy materials and lessen the environmental impact of the Special Meeting.our annual meeting of stockholders.

If your shares are held in more than one account at a brokerage firm, bank, broker-dealer, or other similar organization (a “broker and/or other nominee”), you may receive more than one copy of the proxy materials. Please follow the voting instructions on the proxy cards or voting instruction forms, as applicable, and vote all proxy cards or voting instruction forms, as applicable, to ensure that all of your shares are voted. We encourage you to have all accounts registered in the same name and address whenever possible. If you are a registered holder, you can accomplish this by contacting our transfer agent, Computershare, at (800) 736-3001 or in writing to Computershare Investor Services, PO. Box 43006,43078, Providence, Rhode Island 02940-3006.02940-3078. If your shares are held in an account at a broker and/or other nominee, you can accomplish this by contacting that organization.

Why did multiple stockholders at my address receive only one copy of the Notice and proxy materials?

Some broker and/brokers or other nominees may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of the Notice or set of proxy materials is being delivered to multiple stockholders sharing an address unless we have received contrary instructions. We will promptly deliver a separate copy of any of these documents to you if you write to us

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at 2 Mill & Main Place,233 Ayer Road, Suite 395, Maynard,4, Harvard, MA 01754,01451, Attention: Corporate Secretary or call us at (978) 648-6000. If you want to receive separate copies of the Notice or proxy materials or Annual Reports on Form 10-K in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your broker and/or other nominee, or you may contact us at the above address or telephone number.

What is the quorum requirement to hold the Special Meeting?annual meeting?

Our outstanding Common Stock is the only class of securities entitled to vote at the Special Meeting, and each issued and outstanding, shareand each holder of our Common Stock is entitled to one vote for each share of the Common Stock standing in the name of such stockholder on each matter submitted to a votethe books of our stockholders.the Company on the record date for the annual meeting. Common stockholders of record at the close of business on August 21, 2023,March 25, 2024, the record date for the Special Meeting,annual meeting, are entitled to notice of and to vote at the Special Meeting.annual meeting. The presence at the Special Meeting, in person or by proxy, of the holders of a majority of the stock issued and outstanding and entitled to vote as of the record date, present in person or represented by proxy, will constitute a quorum at the annual meeting.  On March 25, 2024, the record date for the annual meeting, there were 3,857,444 shares of Common Stock issued and outstanding as of August 21, 2023 will constitute a quorum.outstanding.



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For purposes of determining the presence or absence of a quorum, abstentions and broker non-votes if any, will be counted as present.  If a quorum is not present, or represented at the annual meeting, the stockholders entitled to vote at the annual meeting, present in person or represented by proxy, will have the power to adjourn the meeting may be adjournedfrom time to time until a quorum is obtained.present or represented.

What is the vote required for each of the proposals?

Approval

A summary of our annual meeting proposals and applicable vote standards is set forth below.  Proposal 1 the Reverse Stock Split Proposal, willrequires a plurality vote. Proposals 2 and 3 require the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote thereon. The approval of Proposal 2, the Adjournment Proposal, will require the affirmative vote of the holders of a majority of the outstanding shares of Common Stockstock present in person or represented by proxy at the Special Meetingmeeting and entitled to vote on the Adjournment vote.

Proposal

Vote Options

Vote Required

Effect of Withhold Votes or Abstentions

Broker
Non-Votes (if any)

Election of Directors (Proposal 1)

FOR

WITHHOLD

At least one FOR vote. Nominees receiving the highest number of “FOR” votes are elected until all board seats are filled.  In an uncontested election, where the number of nominees and available board seats are equal, election requires only a single vote or more.

No Effect

No Effect

Ratification of Appointment of Independent Auditors (Proposal 2)

FOR

AGAINST

ABSTAIN

Majority of shares present in person or represented by proxy at the meeting and entitled to vote on the proposal and which has actually been voted.

No Effect

No Effect (1)

Advisory Vote to Approve the Compensation of our Named Executive Officers (Proposal 3)

FOR

AGAINST

ABSTAIN

Majority of shares present in person or represented by proxy at the meeting and entitled to vote on the proposal and which has actually been voted.

No Effect

No Effect

(1) This proposal is considered to be a “routine” matter. Accordingly, if you beneficially own your shares and which have actually been voted.

Abstentions. Abstentions will have the same effect as a vote against Proposal 1, the Reverse Stock Split Proposal. Abstentions will have no effect on the outcome of the Adjournment Proposal (Proposal 2), as abstentions do not constituteprovide voting instructions, your broker or other nominee has discretionary authority to vote your shares that have actually been voted.on this proposal. Accordingly, we do not expect there to be any broker non-votes on this proposal.

Broker Non-Votes.Non-Votes

If you are a beneficial owner of shares held by a broker and/or other nominee and you do not instruct your broker and/or other nominee how to vote your shares, your broker and/or other nominee may still be able to vote your shares in its discretion.  Under the rules of the New York

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Stock Exchange, (“NYSE”), which are also applicable to Nasdaq-listed companies, brokers and/or other nominees that are subject to NYSENew York Stock Exchange rules may use their discretion to vote your “uninstructed” shares on matters considered to be “routine” under NYSENew York Stock Exchange rules but not with respect to “non-routine”“non-routine” matters. A broker non-vote occurs when a broker and/or other nominee has not received voting instructions from the beneficial owner of the shares, and the broker and/or other nominee cannot vote the shares at its discretion because the matter is considered “non-routine”“non-routine” under NYSE rules. Proposals 1 and 3 are considered to be “non-routine” under New York Stock Exchange rules such that your broker or didother nominee may not vote theyour shares on a “routine” matter. Eachthose proposals in the absence of Proposals 1 andyour voting instructions.  Conversely, Proposal 2 is considered to be a “routine” matter under NYSE rules;New York Stock Exchange rules, and thus if you do not return voting instructions to your broker and/or other nominee by its deadline, or you provide a proxy without giving specific voting instructions, your shares may be voted by your broker and/or other nominee in its discretion on each of Proposals 1 andProposal 2. In the event that any broker non-votes are received, they will have the same effect as a vote against Proposal 1, the Reverse Stock Split Proposal, and will have no effect on the outcome of Proposal 2, the Adjournment Proposal.

What are the procedures for voting?

Your Vote

Your vote is very important.  Whether or not you plan to attend the Special Meeting,annual meeting, please vote by proxy in accordance with the instructions on your proxy card or voting instruction card (from your broker and/or other nominee).

Stockholders of Record

If your shares are registered directly in your name with our transfer agent, Computershare, you are a stockholder of record, and you received the proxy materialsNotice by mail with instructions regarding how to view our proxy materials on the Internet, how to receive a paper or email copy of the proxy materials, and how to vote by proxy.proxy in advance of the meeting. You can also vote in person at the Special Meeting or by proxy.proxy during the annual meeting. There are three ways stockholders of record can vote by proxy:proxy in advance of the meeting: (1) by telephone (by following the instructions on the proxy card); (2) by Internet (by following the instructions provided on the proxy card); or (3) by mail, (by completing and returning the proxy card enclosed in the proxy materials prior to the Special Meeting)annual meeting). Unless there are different instructions, on the proxy card, all shares represented by valid proxies (and not revoked before they are voted) will be voted as follows at the Special Meeting:annual meeting:



FOR the Reverse Stock Split Proposal in Proposal 1; and

·

FOR the election of each of the director nominees listed in Proposal 1 (unless the authority to vote for the election of any such director nominee is withheld);

FOR the Adjournment Proposal in Proposal 2.

·

FOR the ratification of the appointment of Deloitte as our independent registered public accounting firm as described in Proposal 2; and

·

FOR the approval, on a non-binding, advisory basis, of the compensation paid to our named executive officers as described in Proposal 3.

If you provide specific voting instructions, your shares will be voted as instructed.  Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day until the polls close at 11:59 p.m., Eastern Time, on October 11, 2023.during the meeting.



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Beneficial Owners of Shares Held in Street Name

If your shares are held in an account at a broker and/or other nominee, then you are the beneficial owner of shares held in “street name,” and such organization forwarded to you the proxy materials. There are two ways beneficial owners of shares held in street name can vote by proxy in accordance withYou should follow the instructions provided to you by yourfrom such broker and/or other nominee: (1) by mail (by following the instructions on the voting instruction form); or (2) by Internet (by following the instructions on the voting instruction form). As a beneficial owner, you are also invitednominee in order to attend the Special Meeting, but since you are not a stockholder of record, you may not vote your shares in person at the Special Meeting unless you request and obtain a valid “legal proxy” from your broker, which is a written document that will give you the legal right to vote the shares at the Special Meeting. You must also satisfy the Special Meeting admission criteria set out below.shares.  

Although we do not know of any business to be considered at the Special Meetingannual meeting other than the proposals described in the proxy statement, if any other business is presented at the Special Meeting,annual meeting, your signed proxy or your authenticated Internet or telephone proxy will give authority to each of Sylvia Wulf, David A. Frank and Angela M. Olsen to vote on such matters at his or her discretion.

YOUR VOTE IS IMPORTANT.  PLEASE VOTE WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIALANNUAL MEETING IN PERSON.

How do I attend the meeting?

You are entitled to attend the Special Meetingannual meeting only if you were a stockholder of record as of the record date, or if you are a “beneficial owner” of shares held in “street name” as of the record date and you hold a valid legal proxy for the annual meeting, executed in your favor by your broker and/or other nominee, for the Special Meeting.nominee. Registration will begin at 8:00 a.m., Eastern Time on the date of the Special Meetingannual meeting, and seating will begin immediately after. Since seating is limited, admission to the Special Meetingannual meeting will be on a first-come, first-served basis.

If you plan to attend, in addition to the legal proxy required if you are a “beneficial owner” of your shares, please note that youall attendees should be prepared to present government-issued photo identification for admittance, such as a passport or driver’s license. IfIn addition, if you are the “beneficial owner” of your shares, you will also need proof of ownership as of the record date, such as the Notice, the voting instruction card provided by your broker or other nominee,  your most recent account statement prior to the record date, a copy of the voting instruction card provided by your broker, or similar evidence of ownership. If you do not have a valid picture identification or proof of ownership of our stock, and a valid picture identification, you may be

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denied admission to the Special Meeting.annual meeting. If you do not comply with each of the foregoing requirements, you may not be admitted to the Special Meeting.annual meeting.

How do I revoke a proxy?

If you are a stockholder of record, you may revoke your proxy at any time before it is actually voted at the Special Meetingannual meeting by:

 

delivering written notice of revocation to our Corporate Secretary at 2 Mill & Main Place, Suite 395, Maynard, Massachusetts 01754, which must be received by our Corporate Secretary prior to the start of the Special Meeting;

·

delivering written notice of revocation to our Corporate Secretary at 233 Ayer Road, Suite 4, Harvard, Massachusetts 01451, which must be received by our Corporate Secretary prior to the start of the annual meeting;

·

submitting a later-dated proxy prior to the applicable cutoff times, as described above; or

·

attending the annual meeting and voting in person.



submitting a later-dated proxy prior to the applicable cutoff times, as described above; or

by attending the Special Meeting and voting in person.

Your attendance at the Special Meetingannual meeting will not, by itself, constitute a revocation of your proxy. You may also be represented by another person attending the Special Meetingannual meeting by executing an acceptable form of proxy designating that person to act on your behalf.

Shares may only be voted by or on behalf of the record holder of shares as of the record date, as indicated in our stock transfer records.

If your shares are held in “street name,” then you must provide voting instructions to the broker and/or other nominee, as the appropriate record holder, so that such person can vote the shares in

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accordance with your preferences. In the absence of such voting instructions from you, the record holder will be entitled to vote your shares on “routine” matters. Pleaseplease contact your broker and/or other nominee if you would like directions on how you may change or revoke your voting instructions.

Who is making this solicitation?

This solicitation is made on behalf of our Board, and we will pay the costs of solicitation. Copies of solicitationproxy materials will be furnished to brokers and/or other nominees holding shares in their names that are beneficially owned by others so that they may forward the solicitation materialproxy materials to such beneficial owners upon request. We will reimburse brokers and/or other nominees for reasonable expenses incurred by them in sending proxy materials to our stockholders. In addition to the solicitation of proxies by mail, our directors, officers, and employees may solicit proxies by telephone, facsimile, or personal interview. No additional compensation will be paid to these individuals for any such services. We have engaged a third-party solicitor, Georgeson LLC, who may solicit proxies by telephone or by other means of communication on our behalf. The cost for this service is estimated at $25,000,$20,000, including expenses.  In addition, we have agreed to indemnify Georgeson LLC against certain claims, liabilities, losses, damages and expenses arising out of or in connection with these services.

How can I find the voting results?

We plan to announce preliminary voting results at the meeting and will publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Special Meeting.annual meeting.



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MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING

PROPOSAL 1:

REVERSE STOCK SPLIT PROPOSAL

OUR BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR

THE REVERSE STOCK SPLIT PROPOSAL.

Introduction

Our Board has unanimously approved and declared advisable an amendment to our Charter (the “Amendment”), which would effect a reverse stock split of all issued and outstanding shares of our Common Stock (along with any shares of Common Stock held by the Company in treasury), at a ratio ranging from 1-for-15 to 1-for-20, inclusive, and an associated reduction in the number of shares of Common Stock we are authorized to issue, from 150,000,000 to 75,000,000, should such Amendment be approved by the stockholders pursuant to this Proposal 1 and if the Board determines to effect the Reverse Stock Split. The decision whether or not to effect a Reverse Stock Split and the ratio of any Reverse Stock Split will be determined by the Board following the SpecialStockholder Proposals for 2025 Annual Meeting and prior to December 31, 2023. Our Board has recommended that the proposed Amendment be presented to our stockholders for approval.

Our stockholders are being asked to approve the Reverse Stock Split and the Authorized Capital Change pursuant to this Proposal 1 and to grant authorization to the Board to determine, at its option, whether to implement a Reverse Stock Split, including its specific timing and ratio, and the Authorized Capital Change. Should we receive the required stockholder approvals for Proposal 1, the Board will have the sole authority to elect, at any time on or prior to December 31, 2023, and without the need for any further action on the part of our stockholders, whether to effect a Reverse Stock Split and the number of whole shares of our Common Stock, between and including fifteen (15) and twenty (20), that will be combined into one share of our Common Stock (along with the Authorized Capital Change).

By approving Proposal 1, our stockholders will: (a) approve the Amendment pursuant to which any whole number of issued shares of Common Stock between and including fifteen (15) and twenty (20), as determined by our Board, could be combined into one share of Common Stock; (b) approve the Amendment pursuant to which the number of shares of Common Stock we are authorized to issue could be reduced from 150,000,000 to 75,000,000; and (c) authorize the Company to file the Amendment with the Secretary of State of the State of Delaware, in each case as determined by the Board at its sole option. The Board may also elect not to undertake any Reverse Stock Split and the Authorized Capital Change and therefore abandon the Amendment. No further action on the part of stockholders will be required to either implement or abandon the Reverse Stock Split or the Authorized Capital Change. If the Amendment has not been filed with the Secretary of State of the State of Delaware by the close of business on December 31, 2023, our Board will abandon the Reverse Stock Split and the Authorized Capital Change, and stockholder approval would again be required prior to implementing a reverse stock split of our Common Stock or reduction of our authorized share capital.

The form of the proposed Amendment to effect the Reverse Stock Split and the Authorized Capital Change is as set forth in Appendix A (subject to the Board’s selection of the applicable reverse stock split ratio). The Reverse Stock Split, if effected, would affect all of our holders of Common Stock uniformly, except with respect to the treatment of fractional shares. The following description of the proposed Amendment, Reverse Stock Split and Authorized Capital Change is a summary and is subject to the full text of the proposed Amendment.

Background — Reverse Stock Split

On October 31, 2022, we received a letter (the “Letter”) from The NASDAQ Stock Market LLC (“Nasdaq”) notifying us that, because the closing bid price for our Common Stock had been below $1.00 per share for the



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previous 30 consecutive business days, it no longer complied with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. The Letter had no immediate effect on our listing on the Nasdaq Capital Market or on the trading of our Common Stock. The Letter provided us with a compliance period of 180 calendar days, or until May 1, 2023, to regain compliance. We were unable to regain compliance with the bid price requirement by May 1, 2023. However, on May 2, 2023, we received a notice from Nasdaq granting us an additional 180 calendar days, or until October 30, 2023, to regain compliance with the minimum $1.00 bid price per share requirement for continued listing on the Nasdaq Capital Market. Nasdaq determinedStockholder proposals that we were eligible for the second compliance period due to us meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and our written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. To regain compliance, the closing bid price of our Common Stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the second compliance period.

We have been monitoring the closing bid price of the Common Stock, but as of August 1, 2023, our closing bid price has not met the minimum threshold of $1.00 per share for a minimum of 10 consecutive business days. There can be no assurance that we will regain compliance with the minimum bid price requirement by the end of the second 180-day compliance period on October 30, 2023 or otherwise maintain compliance with the other listing requirements.

If we do not meet the minimum bid price requirement by the end of the second 180-day compliance period, our shares will be subject to delisting by Nasdaq. If an issuer’s equity security is delisted from the Nasdaq Capital Market, it may be forced to seek to have its equity security traded or quoted on the OTC Bulletin Board or in the “pink sheets.” Such alternatives are generally consideredintended to be less efficient marketspresented at our 2025 annual meeting of stockholders and not as broad as the Nasdaq Capital Market, and therefore less desirable. Accordingly, the delisting, or even the potential delisting, of our Common Stock could have a negative impact on the liquidity and market price of our Common Stock.

As such, our Board believes that it is in the best interest of the Company and its stockholders that the Board has the ability to effect, in its discretion, the Reverse Stock Split to improve the price level of our Common Stock so that we are able to regain compliance with the minimum bid price requirement and minimize the risk of delisting from the Nasdaq Capital Market.

Any delisting from the Nasdaq Capital Market would likely result in further reductions in the market prices of our Common Stock, substantially limit the liquidity of our Common Stock, not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media and analyst coverage, and materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from the Nasdaq Capital Market could also have other negative results, including the potential loss of institutional investor interest, fewer business development opportunities, and the inability to raise additional required capital. In addition, the SEC has adopted rules governing “penny stocks” that impose additional burdens on broker-dealers trading in stock priced at below $5.00 per share, unless listed on certain securities exchanges. In the event of a delisting, we anticipate taking actions to try to meet the Nasdaq Capital Market’s initial listing standards and submitting an application for our Common Stock to be listed on the Nasdaq Capital Market, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement or prevent future non-compliance with the Nasdaq Capital Market’s listing requirements, whether as to minimum bid price or otherwise.

In addition to regaining compliance with the Nasdaq Capital Market’s minimum bid price listing requirements, we also believe that the Reverse Stock Split and an increaseincluded in our stock price may make our Common Stock more attractive to a broader range of institutional and other investors (including funds that are prohibited from buying stocks whose price is below a certain threshold) and facilitate higher levels of institutional stock

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ownership, where investment policies generally prohibit investments in lower-priced securities, as well as better enable us to raise funds to help finance operations. We understand that many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers, which reduces the number of potential purchasers of our Common Stock. In addition, some of those policies and practices may function to make the processing of trades in low-priced stocks economically less attractive to brokers. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, we believe the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks. Further, lower-priced stocks have a perception in the investment community as being more risky and speculative, which may negatively impact not only the price of our Common Stock, but also our market liquidity.

Background — Authorized Capital Change

As a matter of Delaware law, the implementation of the Reverse Stock Split does not require a reduction in the total number of authorized shares of Common Stock. However, the Amendment will also effect the Authorized Capital Change. The Authorized Capital Change will not be proportionalproxy statement relating to the ratio of the Reverse Stock Split. Accordingly, while the Authorized Capital Change will reduce the number of shares authorized for issuance on an absolute basis, it will have the effect of increasing the number of shares of Common Stock authorized for issuance relative2025 annual meeting, pursuant to the number of shares outstanding (although such relative increase will be smaller than if we did not effect the Authorized Capital Change). The Board believes the relative increase in the number of shares of Common Stock authorized for issuance is in the best interest of the Company and its stockholders.

As we have disclosed in our other SEC filings, since inception, we have incurred cumulative net operating losses and negative cash flows from operations and we expect this to continue for the foreseeable future. As of June 30, 2023, we have $43.8 million in cash and cash equivalents, and restricted cash, a significant portion of which is required to fund our current liabilities and other contractual obligations. Our ability to continue as a going concern is dependent upon our ability to raise additional capital, and there can be no assurance that such capital will be available in sufficient amounts on terms acceptable to us, or at all. This raises substantial doubt about our ability to continue as a going concern over the next 12 months. Until such time, if ever, as we can generate positive operating cash flows, we may be required to finance our cash needs through a combination of equity offerings, debt financings, government or other third-party funding, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of holders of our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our common stock. There can be no guarantee that we will be successful in raising additional funds in the future through financings, sales of our products, government grants, loans, or from other sources or transactions, and if we are unable to raise such funds, we will exhaust our resources and will be unable to maintain our currently planned operations. If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us.

The relative increase is designed to enable us to raise additional capital in the future via equity and convertible debt financings, as well as to meet our obligationsRule 14a-8 promulgated under outstanding options, restricted stock unitsand convertible securities, and our equity compensation plans, while retaining flexibility to respond to other future business needs and opportunities. The additional authorized shares would enable us to issue shares in the future in a timely manner and under circumstances we consider favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. For example, the shares may be used for: capital raising transactions involving equity or convertible debt securities; financing the development and construction of additional farms, including the Ohio farm; providing equity incentives to employees, directors, consultants or advisors under equity incentive plans or otherwise; establishing strategic relationships with other companies and other potential strategic transactions; expanding our business through the acquisition of other businesses, technologies or products; stockholder right plans; stock splits or stock dividends; other corporate purposes.

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We have engaged an exclusive financial advisor and sole placement agent to explore a wide range of transactions, including, without limitation, a transaction involving a co-investment by us with one or more non-affiliated entities and a private placement of our equity or equity-linked securities to a limited number of sophisticated investors, that could result in the issuance of Common Stock, as they arise or as our needs require, which could occur promptly following the effectiveness of the Amendment. However, we have no current agreement or commitment to issue additional shares of Common Stock, except for issuances of Common Stock as described below under the heading “Fractional Shares” and upon the exercise of its outstanding options and conversion of restricted stock units and other equity securities.

Reverse Stock Split

The Reverse Stock Split would affect all stockholders uniformly and would not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split results in any stockholders owning a fractional share, the treatment of which is described below.

Our current authorized share capital is 150,000,000 shares of Common Stock, and 5,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”). As of July 31, 2023, 71,358,249 shares of Common Stock and no shares of Preferred Stock were outstanding. Accordingly, our current authorized but unissued share capital is 78,641,751 shares of Common Stock and 5,000,000 shares of Preferred Stock.

Therefore, as a result of the Reverse Stock Split, the number of outstanding shares of Common Stock would decrease by a specified amount. The determination of the specific ratio for the Reverse Stock Split will not affect the number of shares of Common Stock the Company is authorized to issue after the Reverse Stock Split. Regardless of the ratio, as a result of the Authorized Capital Change, the Company will be authorized to issue 75,000,000 shares of Common Stock after the Reverse Stock Split. Assuming 71,358,249 shares remain outstanding at the time of the Reverse Stock Split, after giving effect to the Authorized Capital Changeand theReverse Stock Split that would result from the listed hypothetical Reverse Stock Split ratios, without giving effect to the treatment of fractional shares, our authorized but unissued Common Stock would be as follows:

Shares

Authorized (2)

  

Current Shares

Outstanding (3)

  

Reverse Split

Ratio (1)

  

Post Reverse Split

  

Shares Outstanding

  

Unissued Shares

75,000,000

  71,358,249  15  4,757,217  70,242,783

75,000,000

  71,358,249  16  4,459,891  70,540,109

75,000,000

  71,358,249  17  4,197,545  70,802,455

75,000,000

  71,358,249  18  3,964,348  71,035,652

75,000,000

  71,358,249  19  3,755,698  71,244,302

75,000,000

  71,358,249  20  3,567,913  71,432,087

(1)

Proposed ratios ranging from 1-for-15 to 1-for-20, inclusive.

(2)

Total authorized shares of Common Stock giving effect to the Authorized Capital Change.

(3)

Does not include shares reserved for future issuance pursuant to outstanding options, restricted stock units and future awards under the Company’s 2016 Equity Incentive Plan, as amended (the “2016 Plan”) and the 2006 Equity Incentive Plan, as amended (the “2006 Plan”). Please note that between the date of this Proxy Statement and the date of the Special Meeting, we could engage in transactions involving the issuance of securities that would increase the number of issued or issuable shares from the numbers reflected in the above tables.

The actual number of shares outstanding after giving effect to the Reverse Stock Split, if implemented, will depend on the reverse stock split ratio that is ultimately determined by the Board. No shares of our preferred stock are outstanding and the total number of authorized shares of preferred stock will not be affected by the Reverse Stock Split.

The Reverse Stock Split would not change the par value of the Common Stock. If any stockholder would otherwise receive a fractional share of Common Stock as a result of the Reverse Stock Split, our Board will issue

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an additional fraction of a share of Common Stock to such holder, which fraction, when combined with the fraction resulting from the Reverse Stock Split, will equal a whole share of Common Stock, such that no holder will continue to hold fractional shares following the Reverse Stock Split.

Criteria to be Used for Determining Reverse Stock Split Ratio

The purpose of a range for the Reverse Stock Split is to give the Board the flexibility to meet business needs as they arise, to take advantage of favorable opportunities and to respond to a changing investment environment, such as stock price fluctuations, higher inflation, higher interest rates and related factors. In determining which reverse stock split ratio to implement, if any, following receipt of stockholder approval of the Amendment to effect the Reverse Stock Split, the Board may consider, among other things, various factors, such as:

the historical and expected trading prices and trading volumes of our Common Stock;

The Nasdaq Capital Market Continued Listing Standards requirements;

the number of shares of our Common Stock outstanding;

the then-prevailing trading prices and trading volumes of our Common Stock and the expected impact of the Reverse Stock Split and the Authorized Capital Change on the trading market for our Common Stock in the short- and long-term;

overall trends in the stock market;

the anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs;

business developments and our actual and projected financial performance; and

prevailing general market and economic conditions.

Our Board reserves the right to abandon the Reverse Stock Split and the Authorized Capital Change without further action by our stockholders at any time before the effectiveness of the filing with the Secretary of the State of Delaware of the Amendment, even if the authority to effect a Reverse Stock Split has been approved by our stockholders at the Special Meeting. If the Reverse Stock Split Proposal is approved, we could effect the Reverse Stock Split and the Authorized Capital Change at any time after the Special Meeting until December 31, 2023. By voting in favor of the Reverse Stock Split Proposal, you are expressly also authorizing the Board to delay, not to proceed with, and abandon, the Reverse Stock Split and the Authorized Capital Change if it should so decide, in its sole discretion, that such action is in the best interests of the stockholders.

Effectiveness of Reverse Stock Split and Authorized Capital Change

The Reverse Stock Split and Authorized Capital Change would become effective at the effective time set forth in the Amendment (the “Effective Time”).

Procedure for Implementing the Reverse Stock Split and Authorized Capital Change

If Proposal 1 is approved by our stockholders, our Board retains the discretion to effect the Reverse Stock Split and the Authorized Capital Change at any time prior to December 31, 2023 or not at all. Our Board will determine whether such an action is in the best interests of the Company and our stockholders, taking into consideration the factors discussed above and any other factors it considers relevant. The Reverse Stock Split and the Authorized Capital Change would be implemented by filing the Amendment with the Secretary of the State of Delaware, setting forth the ratio used in the Reverse Stock Split

If the Reverse Stock Split is effected, then after the Effective Time, our Common Stock will have a new Committee on Uniform Securities Identification Procedures (“CUSIP”) number, which is a number used to

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identify our equity securities, and stock certificates with the older CUSIP number will need to be exchanged for stock certificates with the new CUSIP number by following the procedures described below. Our Common Stock will continue to be listed on the Nasdaq Capital Market under the symbol “AQB” subject to any future change of listing of our securities.

Principal Effects of the Amendment

Reverse Stock Split — General

The Reverse Stock Split, if implemented by the Board, will reduce the total number of outstanding shares of Common Stock based on the split ratio determined by the Board in its discretion, and it will apply automatically to all shares of our Common Stock, including shares held by the Company in treasury, shares issuable upon the exercise or conversion of outstanding stock options, restricted share units, and other equity securities. The Reverse Stock Split would be effected simultaneously for all shares of our Common Stock, and the split ratio would be the same for all shares of Common Stock. The Reverse Stock Split would affect all of our stockholders uniformly and would not affect any stockholder’s percentage ownership interests in the Company, except with respect to the treatment of fractional shares. The principal effect of the Reverse Stock Split will be to proportionately decrease the number of outstanding shares of our Common Stock based on the split ratio selected by our Board.

Voting rights and other rights of the holders of our Common Stock will not be affected by the Reverse Stock Split, other than as a result of the treatment of fractional shares. The number of stockholders of record will not be affected by the Reverse Stock Split. If approved and implemented, the Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of our Common Stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares. Our Board believes, however, that these potential effects are outweighed by the benefits of the Reverse Stock Split.

Our Common Stock is currently registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be received by us no later than December 13, 2024, which is 120 calendar days before the anniversary of the date on which this proxy statement was first distributed to our stockholders. If the date of the 2025 annual meeting is moved more than 30 days from the date of the 2024 annual meeting, the deadline for inclusion of proposals in our proxy statement for the 2025 annual meeting instead will be a reasonable time before we begin to print and we are subjectsend our proxy materials. All stockholder proposals must be in compliance with applicable laws and regulations in order to be considered for possible inclusion in the proxy statement and form of proxy for the 2025 annual meeting. 

If a stockholder wishes to request business be brought at our 2025 annual meeting of stockholders (other than matters included in our proxy statement in accordance with Rule 14a-8 under the Exchange Act), the stockholder must give advance notice to us prior to the periodic reportingdeadline (the “Bylaw Deadline”) for the annual meeting determined in accordance with our Amended and Restated Bylaws (“bylaws”) and comply with certain other requirements specified in our bylaws. Under our bylaws, in order to be deemed properly presented, the notice of a proposal, including nominations for the election of directors, must be delivered to our Corporate Secretary no later than February 26, 2025, which is 45 calendar days prior to the first anniversary of the Exchange Act. Afterdate on which we mailed the Reverse Stock Split,proxy materials for the 2024 annual meeting.

However, if we will continuechange the date of the 2025 annual meeting so that it occurs more than 30 days prior to, or more than 30 days after, May 23, 2025, stockholder proposals intended for presentation at the 2025 annual meeting, but not intended to be subjectincluded in our proxy statement relating to the periodic reporting2025 annual meeting, must be delivered to or mailed and other requirementsreceived by our Corporate Secretary at 233 Ayer Road, Suite 4, Harvard, Massachusetts 01451 no later than the close of business on the 90th calendar day prior to the 2025 annual meeting or the 20thcalendar day following the day on which public disclosure of the Exchange Act. The Reverse Stock Split woulddate of the 2025 annual meeting is first made (the “Alternate Date”). We also encourage you to submit any such proposals via email to investors@aquabounty.com.  If a

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stockholder gives notice of such proposal after the Bylaw Deadline (or the Alternate Date, if applicable), the stockholder will not affect our securities law reporting and disclosure obligations, and we would continuebe permitted to be subjectpresent the proposal to the periodic reportingstockholders for a vote at the 2025 annual meeting. Additional requirements applicable to notices of stockholder proposals are set forth in our bylaws. In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.

You

We have not been notified by any stockholder that such stockholder intends to present a stockholder proposal from the floor at this annual meeting. The enclosed proxy grants the proxy holders discretionary authority to vote on any matter properly brought before the annual meeting or any adjournment or postponement thereof.

In connection with our solicitation of proxies for our 2025 annual meeting of stockholders, we intend to file a proxy statement and WHITE proxy card with the SEC. Stockholders may obtain our proxy statement (and any amendments and supplements thereto) and other documents as and when filed with the SEC without charge from the SEC’s website at www.sec.gov.

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MATTERS TO BE CONSIDERED AT ANNUAL MEETING

PROPOSAL 1:

ELECTION OF DIRECTORS

Our Board recommends that stockholders vote FOR

the election of EACH OF THE director nominees listed below.

Each director serving on our Board is elected for a one-year term to hold office until the next annual meeting of our stockholders until the election and qualification of his or her successor, subject to his or her earlier death, disqualification, resignation or removal. The nominees named below have agreed to serve if elected, and we have no reason to believe that they will be unavailable to serve. If, however, the nominees named below are urgedunable to consult your own tax advisorsserve or decline to determineserve at the tax consequences to youtime of the Reverse Stock Split.annual meeting, the proxies will be voted for any nominee who may be designated by our Board. Unless a stockholder specifies otherwise, a returned, signed proxy will be voted FOR the election of each of the nominees listed below.

Under Delaware law, our stockholders will not be entitled to exercise dissenter’s or appraisal rights

The following table sets forth information with respect to the Reverse Stock Split.persons nominated for re-election at the annual meeting:

Authorized Shares; Number



 

 

 

 

 

 



 

Director

 

Committees

Name

Age

Since

Position(s)

Audit

Comp

Nom-Gov

Ricardo J. Alvarez

68

2021

Lead Independent Director

 

Mem

Chair

Erin Sharp

66

2022

Director

Mem

 

 

Gail Sharps Myers

54

2021

Director

Mem

Chair

 

Christine St.Clare

73

2014

Director

Chair

 

Mem

Rick Sterling

60

2013

Director

Mem

Mem

 

Michael Stern

63

2022

Director

 

 

Mem

Sylvia A. Wulf

66

2019

Board Chair and CEO

 

 

 

Ricardo J. Alvarez. Dr. Alvarez joined the Board of SharesAquaBounty in March 2021. He is currently the CEO of Common Stock Available for Future Issuance

The Reverse Stock Split will result inHans Kissle Foods, a reductionleading manufacturer of the total outstanding sharesfresh prepared foods. Prior to joining Hans Kissle, he served as CEO of Common StockJ&K Ingredients, a leading manufacturer of bakery ingredients globally, and shares reserved for issuance under outstanding stock options, restricted share units,as President and other equity securities. The Authorized Capital Change will not be proportional to the ratioCEO of the Reverse Stock Split. Accordingly, while the Authorized Capital Change will reduce the number of shares authorized for issuance on an absolute basis, it will have the effect of increasing the number of shares of Common Stock authorized for issuance relative to the number of shares outstanding (although such relative increase will be smaller than if we did not effect the Authorized Capital Change).

As discussed above, we expect to need to raise additional capital to fund our operations. The relative increase is designed to enable us to raise additional capitalvarious food manufacturing companies including Passport Foods (SVC), LLC, Richelieu Foods, Ruiz Foods, Anita’s Foods, Overhill Farms and Raymundo’s Food Products. In his 30 years as a leader in the future via equitypackaged food industry, Dr. Alvarez has implemented growth strategies including new go-to-market initiatives, geographic expansion and convertible debt financings,innovations of both product and packaging. Dr. Alvarez also has extensive board experience, having served on the boards of Bush Brothers Inc., Clement Pappas Inc., Ruiz Foods and Clear Springs Foods. He currently serves on the board of Phelps Pet Products Inc. Dr. Alvarez brings operational and food industry experience to our Board.

Erin Sharp.  Ms. Sharp joined the Board of AquaBounty in May 2022 after retiring as Group Vice President of Manufacturing and Enterprise Sourcing for The Kroger Co. (NYSE: KR), where she was a Senior Officer having responsibility for companywide manufacturing, food safety and sourcing.  Prior to her 10 years with The Kroger Co., Ms. Sharp had increasing leadership roles in operations and finance with several large consumer product companies; including Sara Lee, Nestle Dreyer’s and Frito Lay.  She served as a board member for the national nonprofit organization Feeding America as well as several industry boards including American Bakers Association, where she was the first female Chair, MilkPEP and the International Dairy Association.  Ms. Sharp earned a bachelor’s degree from the University of Western Ontario and a Master of Business Administration from the University of Texas. Ms. Sharp brings operational and food industry experience to our Board.    



11Gail Sharps Myers. Ms. Sharps Myers joined the Board of AquaBounty in May 2021. She is the Executive Vice President, Chief Legal and Administrative Officer and Corporate Secretary at Denny’s Corporation (NASDAQ:DENN), since February 2024, and she has held senior executive roles at the company since June 2020. Prior to joining Denny’s, she served as Executive Vice President, General Counsel, Chief Compliance Officer and Secretary of American Tire Distributors, Inc. from May 2018 to May 2020, as Senior Vice President, General Counsel and Secretary at Snyder’s-Lance, Inc. (NASDAQ:LNCE) from January 2015 to March 2018 and as Senior Vice President, Deputy General Counsel, Chief Compliance Counsel and Assistant Secretary from 2014 to 2015 at US Foods, Inc. She received her Doctor of Jurisprudence from The Washington College of Law at The American University, her Master of Business Administration from Arizona State University’s W. P. Carey School of Business and her Bachelor of Arts in Political Science at Howard University. Ms. Sharps Myers’ experience and background make her well suited to serve on our Board.

Christine St.Clare.  Ms. St.Clare joined the Board of AquaBounty in May 2014. She is a former Audit Partner at KPMG LLP (“KPMG”) serving publicly traded companies until 2005, after which she transferred to the Advisory Practice, working in the Internal Audit, Risk and Compliance Practice until her retirement in 2010. She also served a four-year term on KPMG’s Board of Directors,

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where she chaired KPMG’s Audit and Finance Committee for three of the four years. She served on the Board of Directors for Tilray, Inc. (“Tilray”) (NASDAQ:TLRY), from their 2018 IPO through April 2021.  At Tilray, she chaired the Audit Committee and was a member of the Nominating & Governance Committee and the Compensation Committee. She formerly served on the boards of both Fibrocell Science, Inc. (“Fibrocell”), a company that specialized in the development of personalized biologics and Polymer Group, Inc. (“Polymer”), a global manufacturer of engineered materials. Fibrocell was a NASDAQ listed company and Polymer was a Blackstone portfolio company with publicly traded debt.  For both Fibrocell and Polymer, Ms. St.Clare served as the Audit Committee Chair until their respective sales to strategic buyers.  Ms. St.Clare holds a Bachelor of Science in Accounting from California State University at Long Beach and has been a licensed Certified Public Accountant in California, Texas and Georgia. Ms. St.Clare’s background in accounting and support of publicly held companies, as well as her experience with biotechnology, makes her well suited for service on our Board.

Rick Sterling.  Mr. Sterling has served on the Board of AquaBounty since September 2013. He served as the Chief Financial Officer at Precigen Inc. (NASDAQ:PGEN) (“Precigen”) from 2007 through March 2021, including leading them through their initial public offering in 2013. During his term at Precigen, Mr. Sterling was responsible for multiple private and public equity and debt capital raises, financial diligence for and integration of over a dozen acquisitions, SEC reporting and compliance, divestitures of businesses, budgeting, and negotiations of facility leases as well as oversight of human resource and information technology functions. Prior to joining Precigen, he was with KPMG where he worked in the audit practice for over 17 years, with a client base primarily in the healthcare, technology and manufacturing industries. He has a Bachelor of Science in Accounting from Virginia Tech and is a licensed Certified Public Accountant. Mr. Sterling’s background in audit and finance, as well as his experience with technology companies, make him well suited for service on our Board.

Michael Stern. Dr. Stern joined the Board of AquaBounty in May 2022 and is the former CEO of The Climate Corporation and Digital Farming for Bayer Crop Science (“Bayer”) and a member of the Crop Sciences Executive Team.  Before joining Bayer, Dr. Stern had a 30-year career at Monsanto Company (NYSE:MON) (“Monsanto”), where he was a member of Monsanto’s Executive Team and led their Row Crop Business in the Americas.  In addition, Dr. Stern served in a variety of leadership roles at Monsanto, including Vice President of U.S. Seeds and Traits, President of American Seeds, CEO of Renessen LLC, a biotechnology joint venture with Cargill, and Director of Technology for Agricultural Productivity.  Dr. Stern is a member of the Board of Directors of Lavoro Limited.  Dr. Stern also serves as Chairman of the Board of Trustees for the Missouri Botanical Garden and served on the board of the Monsanto Fund and the board of Clara Foods, a San Francisco based company focused on developing novel animal proteins from cell culture. Dr. Stern received a Ph.D. in Chemistry from Princeton University, a Master of Science in Chemistry from the University of Michigan and a Bachelor of Science degree from Denison University.  Dr. Stern’s brings broad experience in the food industry and biotechnology to our Board.

Sylvia Wulf.  Ms. Wulf was appointed Executive Director, President, and Chief Executive Officer of AquaBounty in January 2019. In 2023, Ms. Wulf was elected Chair of the Board of AquaBounty, and she relinquished her position as President, as part of the Company’s leadership progression process. Prior to joining AquaBounty, Ms. Wulf served as a Senior Vice President of US Foods, Inc. (NYSE:USFD), where she had been President of the Manufacturing Division since June 2011. Prior to US Foods, Ms. Wulf held senior positions in Tyson Foods, Inc. (NYSE:TSN), Sara Lee Corporation, and Bunge Corp (NYSE:BG). She is also currently on the Board of Directors and the Executive Committee of both the National Fisheries Institute and the Biotechnology Industry Organization. Ms. Wulf received a Bachelor of Science in Finance from Western Illinois University and a Master of Business Administration from DePaul University. Ms. Wulf provides extensive experience in the food industry in North America, including its fish sector to our Board.

Our Executive Officers

The following table identifies our executive officers who are not members of our Board and sets forth their current positions with us.



 

 

 

Name

Age

Officer Since

Position(s)

David F. Melbourne

57

2022

President

David A. Frank

63

2007

Chief Financial Officer and Treasurer

Angela M. Olsen

55

2019

General Counsel and Corporate Secretary


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David F. Melbourne. Mr. Melbourne was appointed President of AquaBounty in August 2023. He joined AquaBounty in June 2019 as Chief Commercial Officer with a background in general management, operations/commercial management and innovation.  His 25 years of experience in the seafood industry spans both wild fisheries and aquaculture.  He served as Senior Vice President, Consumer Marketing/Government & Industry Relations/Corporate Social Responsibility at Bumble Bee Foods, LLC from 2005 to 2019.

David A. Frank. Mr. Frank was appointed Chief Financial Officer and Treasurer of AquaBounty in October 2007.  Prior to joining AquaBounty, he served as Chief Financial Officer of Magellan Biosciences and President of TekCel between 2003 and 2007.

Angela M. Olsen. Ms. Olsen was appointed General Counsel and Corporate Secretary in November 2019. Prior to joining AquaBounty, she served as Senior Advisor and Associate General Counsel atE.I. du Pont de Nemours and Company (NYSE:DD) between 2010 and 2019.

Our executive officers are elected by our Board and hold office until removed by the Board, or until their successors have been duly elected and qualified or their earlier resignation, retirement, removal, or death. The principal occupation and employment during the past five years of each of our executive officers was carried on, in each case except as specifically identified above, with a corporation or organization that is not a parent, subsidiary or other affiliate of us. There is no arrangement or understanding between any of our executive officers and any other person or persons pursuant to which they were or are to be selected as an executive officer. There are no material legal proceedings to which any of our executive officers or any associate of any such executive officer is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or any of our subsidiaries.

Corporate Governance Principles

We are committed to having sound corporate governance principles. Having such principles is essential to maintaining our integrity in the marketplace. Our Code of Business Conduct and Ethics and the charters for each of the Audit, Compensationand Human Capital, and Nominating and Corporate Governance Committees are available on the investor relations section of our corporate website (www.aquabounty.com). A copy of our Code of Business Conduct and Ethics and the committee charters may also be obtained upon request to Corporate Secretary, AquaBounty Technologies, Inc., 233 Ayer Road, Suite 4, Harvard, Massachusetts 01451.

Environmental, Social and Governance

We believe Environmental, Social and Governance (“ESG”) concerns are fundamental to our Purpose and Values and serve as a critical foundation to how we operate our business.  Our focus on ESG has been instrumental in driving continuous improvement and building our culture, and has resulted in increased efficiencies and effectiveness throughout our operations.  We believe that taking ESG considerations into account in our decision-making process ensures a disciplined approach to risk management.

Our ESG Committee, which is comprised of our executive management team, with oversight by our Board of Directors, has worked cross functionally to develop our strategy, structure, process and the roadmap for the standards that are relevant to our business.  Currently, we choose to focus on the ESG aspects of (i) energy and water management; (ii) consumer welfare and employee health and safety; and (iii) diversity and inclusion, humane and considerate animal welfare, and sound governance and oversight structure.  Additionally, our framework is aligned with a number of the United Nations Sustainable Development Goals.

Code of Ethics

Our Board has adopted the Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including, but not limited to, our Chief Executive Officer and Chief Financial Officer and other executive and senior financial officers. The Code of Business Conduct and Ethics constitutes our “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act and is our “code of conduct” within the meaning of the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”).  Our Code of Business Conduct and Ethics is posted to our website, and we intend to disclose any amendment or waiver of a provision thereof that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website (available at www.aquabounty.com) and/or in our public filings with the SEC. During fiscal year ended December 31, 2023, no waivers were granted from any provision of the Code of Business Conduct and Ethics.

Policy on Trading, Pledging and Hedging of Our Common Stock

Certain transactions in our securities (such as purchases and sales of publicly traded put and call options, and short sales) create a heightened compliance risk or could create the appearance of misalignment between management and stockholders. In addition, securities held in a margin account or pledged as collateral may be sold without consent if the owner fails to meet a margin call or defaults on the loan, thus creating the risk that a sale may occur at a time when an officer or director is aware of material, non-public information or otherwise is not permitted to trade in Company securities. Our insider trading policy expressly prohibits short sales and

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derivative transactions of our obligations under outstanding options, restricted stock unitsby our employees, officers and convertibledirectors, including hedging and the purchase or sale of puts, calls, or other derivative securities and our equity compensation plans, while retaining flexibility to respond to other future business needs and opportunities. In the event that our Board determines to issue additional shares of Common Stock (or securities convertible therefor), it intends, in accordance with its fiduciary duties, to issue any such shares on terms that it considers to be in the best interests of the Company or any derivative securities that provide the economic equivalent of ownership. To our knowledge, each of our directors and executive officers complied with this policy during 2023.

Stockholder Communications with Directors

Stockholders may communicate with our stockholders. Such shares could be issued directly, or could be reserved for issuance and then issued pursuantdirectors by sending communications to the exerciseattention of options, warrants, restricted stock units,the Chair of the Board, the Chair of a committee of the Board, or other equity securities that we may issue in the future. The additional authorized shares would enable us to issue shares in the future in a timely manner and under circumstances we consider favourable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. For example, the shares may be used for: capital raising transactions involving equityan individual director via U.S. Mail or convertible debt securities; financing the development and construction of additional farms, including the Ohio farm; providing equity incentives to employees, directors, consultants or advisors under equity incentive plans or otherwise; establishing strategic relationships with other companies and other potential strategic transactions; expanding our business through the acquisition of other businesses, technologies or products; stockholder right plans; stock splits or stock dividends; other corporate purposes.

If this Proposal 1 is approved, we may issue additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock from time to time in the future, including pursuantExpedited Delivery Services to our registration statements previously filed with the SEC or new registration statements that we may file in the future, andaddress at AquaBounty Technologies, Inc., 233 Ayer Road, Suite 4, Harvard, Massachusetts 01451. The Company will forward by U.S. Mail any such communication to the extent that we do so, the shareholdings of our existing stockholders will be diluted by such issuances and the share price of our common stock may be depressed. We currently cannot estimate the number of shares of Common Stock that may be issued in the future in any such fundraising transaction, as the number of shares would depend on a number of factors including the trading price of the Common Stock at the time of any such financing, the amount of capital the Company is able to raise, the Company’s need for capital, the terms of any such transaction, and general market conditions. Except for a stock split or stock dividend, future issuances of shares of our Common Stock will dilute the voting power and ownership of our existing stockholders and, depending on the amount of consideration received in connection with the issuance, could also reduce stockholders’ equity on a per share basis. If the Board authorizes the issuance of additional shares after the Reverse Stock Split, the dilution to the ownership interest of our existing stockholders may be greater than would occur had the Reverse Stock Split not been effected.

We have engaged an exclusive financial advisor and sole placement agent to explore a wide range of transactions, including, without limitation, a transaction involving a co-investment by us with one or more non-affiliated entities and a private placement of our equity or equity-linked securities to a limited number of sophisticated investors, that could result in the issuance of Common Stock, as they arise or as our needs require, which could occur promptly following the effectiveness of the Amendment. However, we have no current agreement or commitment to issue additional shares of Common Stock, except for issuances of Common Stock as described below under the heading “Fractional Shares” and upon the exercise of its outstanding options and conversion of restricted stock units and other equity securities.

Effect of the Reverse Stock Split on Employee Plans, Stock Options, Restricted Stock Units, and Other Equity Securities

Based upon the split ratio determinedmailing address most recently provided by the Board proportionate adjustments are generallymember identified in the “Attention” line of the communication. All communications must be accompanied by the following information:

·

A statement of the type and amount of the securities of the Company that the submitting individual holds, if any;

·

Any special interest, other than in the capacity of security holder, of the submitting individual in the subject matter of the communication; and

·

The address, telephone number, and email address of the submitting individual.

Board Composition

Each director serving on our Board is elected for a one-year term to hold office until the next annual meeting of our stockholders until the election and qualification of his or her successor, subject to his or her earlier death, disqualification, resignation or removal. The authorized number of directors may be changed by resolution of the Board. The Board has the power to appoint any person as a director to fill a vacancy on the Board.

Board Independence

As required to be made toby the per share exercise priceNasdaq listing rules, our Board evaluates the independence of its members at least once annually and at other appropriate times when a change in circumstances could potentially impact the independence or effectiveness of one of our directors.

In February 2024, our Board undertook a review of the composition of our Board and its committees and the numberindependence of shares issuableeach director. Based upon the exerciseinformation requested from and provided by each director concerning his or conversionher background, employment, and affiliations, including family relationships, our Board has determined each of all outstanding stock options, restricted stock units,Mses. St.Clare, Sharps Myers and other equity securities entitling the holders to acquire, purchase, exchange for, or convert into, shares of Common Stock, including, without limitation, any awards previously grantedSharp, and Messrs. Alvarez, Sterling and Stern is an “independent director” as defined under our 2016 Plan and 2006 Plan. Additionally, the exercise prices of outstanding stock options would increase, likewise in proportion to the reverse stock split ratio. This would result in approximately the same aggregate price being required to be paid under such stock options upon such exercise, immediately following the Reverse Stock Split as was the case immediately preceding the Reverse Stock Split. The number of shares deliverable upon settlement or vesting of restricted stock units or other equity securities will be similarlyNasdaq Listing Rule 5605(a)(2).



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adjusted, subject in all cases to our treatment of fractional shares. In addition, the number of shares available for issuance upon stock options and other awards granted under our equity incentive plans would be proportionately decreased.Board Leadership Structure

Effect on Preferred Stock

As of the date of this Proxy Statement, there were no issued or outstanding shares of our Preferred Stock and no outstanding options or warrants to purchase shares of our Preferred Stock. The Reverse Stock Split would not impact the number of authorized or outstanding shares of our Preferred Stock.

Effect on Record and Beneficial Holders

If this Proposal 1 is approved by our stockholdersOur Board understands that board structures vary greatly among U.S. public corporations, and our Board electsdoes not believe that any one leadership structure is more effective at creating long-term stockholder value. Our Board believes that an effective leadership structure could be achieved either by combining or separating the Board Chair and Chief Executive Officer positions, so long as the structure encourages the free and open dialogue of competing views and provides for strong checks and balances. Specifically, the Board believes that, to implementbe effective, the governance structure must balance the powers of the Chief Executive Officer and the independent directors and ensure that the independent directors are fully informed, able to discuss and debate the issues that they deem important, and able to provide effective oversight of management.

Currently, our Board combines the roles of Chief Executive Officer and Board Chair but has appointed a Reverse Stock Split, stockholders of record holding all of their shares of Common Stock electronically in book-entry form under the direct registration system for securities will be exchangedLead Independent Director who is elected by the exchange agentindependent directors. The Lead Independent Director serves as a liaison between the independent directors and will receivethe Chief Executive Officer and Board Chair, and leads executive sessions of Board meetings consisting of only the independent directors. The role of President has been assumed by a transaction statement at their addressmember of record indicating the number of new post-split shares of Common Stock they hold after the Reverse Stock Split. Non-registered stockholders holding Common Stock through a broker and/or other nominee should noteexecutive leadership team. Our Board believes that such brokers and/or other nominees may have different proceduresthis leadership structure is appropriate for processing the Reverse Stock Split than those that would be put in place by us for registered stockholders. If you hold your shares with such a broker and/or other nominee and if you have questions in this regard, you are encouraged to contact your broker and/or other nominee.

If this Proposal 1 is approved by our stockholders and our Board elects to implement a Reverse Stock Split, stockholders of record holding some or all of their shares in certificate form will receive a letter of transmittal from the Company or its exchange agent, as soon as reasonably practicable afterat this time because it allows the effective datePresident to focus on the day-to-day operations of the Reverse Stock Split. Our transfer agent is expected to act as “exchange agent” forCompany. At the purpose of implementingsame time, the exchange of stock certificates. Holders of pre-Reverse Stock Split shares will be asked to surrender to the exchange agent certificates representing pre-Reverse Stock Split shares in exchange for post-Reverse Stock Split shares in accordance with the procedures to be set forth in the letter of transmittal. No new post-Reverse Stock Split share certificates will be issued to a stockholder until such stockholder has surrendered such stockholder’s outstanding certificate(s) together with the properly completedChief Executive Officer and executed letter of transmittal to the exchange agent.

STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.

Fractional Shares

If any stockholder would otherwise receive a fraction of a share of Common Stock as a resultBoard Chair can focus on corporate strategy and leadership of the Reverse Stock Split, our Board will issue an additional fraction of a share of Common Stock to such holder, which fraction, when combined with the fraction resulting from the Reverse Stock Split, will equal a whole share of Common Stock, such that no holder will continue to hold fractional shares following the Reverse Stock Split.

YOU SHOULD NOT SEND YOUR OLD CERTIFICATES NOW. YOU SHOULD SEND THEM ONLY AFTER YOU RECEIVE THE LETTER OF TRANSMITTAL FROM OUR TRANSFER AGENT.

Accounting Matters

The proposed amendment to the Company’s Charter will not affect the par value of our Common Stock per share, which will remain $0.001 par value per share. As a result of the Reverse Stock Split, upon the Effective Time, the stated capital on our balance sheet attributable to our Common Stock, which consists of the par value per share of our Common Stock multiplied by the aggregate number of shares of our Common Stock issued and outstanding, will be reduced in proportion toBoard.  We believe this structure is appropriate given the size of our executive officer team and our growth trajectory in an evolving industry.

Nevertheless, the Reverse Stock SplitBoard believes that “one size” does not fit all, and the reductiondecision of whether to combine or separate the positions of Chief Executive Officer and Board Chair will vary and depend upon our particular circumstances at a given point in time, taking into consideration the depth and breadth of the executive officer team and the composition of the Board.

9


Board’s Role in Risk Oversight

Our Board is actively engaged in the shares of

13


Common Stock outstanding, subject to a minor adjustment in respectoversight of the treatmentrisks we face and consideration of fractional shares resulting from the Reverse Stock Splitappropriate responses to those risks. However, our Board delegates certain of such responsibilities to its committees. The Audit Committee is responsible for reviewing with management our Company’s policies and the issuance of additional fractions sufficientprocedures with respect to result in only whole shares remaining outstanding following the Reverse Stock Split,risk assessment and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. Our stockholders’ equity, in the aggregate, will remain unchanged.

Additionally, net income or loss per share for all periods would increase proportionately as a result of a Reverse Stock Split since there would be a lower number of shares outstanding. We do not anticipate that any other material accounting consequences would arise as a result of a Reverse Stock Split. If we effect the Reverse Stock Split, in future financial statements we will restate net income or loss per share and other per share amounts for periods ending before the Reverse Stock Split to give retroactive effect to the Reverse Stock Split.

Certain Risks Associated with a Reverse Stock Split and Authorized Capital Change

There arerisk management, including reviewing certain risks associated with our financial and accounting systems, accounting policies, investment strategies, regulatory compliance, insurance programs, and other matters. The Audit Committee also reviews and comments on a reverse stock split,periodic risk assessment performed by management. After the Audit Committee performs its review and we cannot accurately predict or assurecomment function, it reports any significant findings to our Board. The Board is responsible for the oversight of our risk management programs and, in performing this function, receives periodic risk assessment and mitigation initiatives for information and approval as necessary.  In addition, under the direction of our Board and certain of its committees, our legal department assists in the oversight of corporate compliance activities. The Compensation and Human Capital Committee also reviews certain risks associated with our overall compensation program for employees to help ensure that the Reverse Stock Split will produceprogram does not encourage employees to take excessive risks.

Currently, our management team conducts an annual risk assessment that is led by our Chief Compliance Officer and provided to our Board as part of their oversight responsibility.  The process includes input from all executive officers and senior managers with all identified risks reviewed by our Disclosure Committee to ensure that all risks are accurately disclosed in our public filings.  Identified risks, along with mitigation plans are reviewed with our outside advisors and reported to our Board on an annual basis with quarterly updates.

Board Meeting Attendance

During 2023, our Board met 11 times, and each director attended or maintainparticipated in 75% or more of the desired results. However,aggregate of (i) the total number of meetings of the Board and (ii) the total number of meetings held by all committees of the Board on which such director served. Members of the Board and its committees also consulted informally with management from time to time. Additionally, non-management Board members met in executive sessions without the presence of management periodically during 2023. We do not have a formal policy regarding board members’ attendance at our annual meetings of stockholders but encourage them to do so. Our 2023 annual meeting of stockholders was attended by one member of our Board.

Board Diversity

We strive to have a Board with race, ethnicity and gender diversity that represents our community and brings diverse ideas and backgrounds to the table.

The table below provides the Diversity Matrix for our Board:



 

 

 

 

Board Diversity Matrix (as of April 5, 2024)

Total Number of Directors

7

 

Female

Male

Non-Binary

Did Not Disclose Gender

Part I: Gender Identity

 

Directors

4

3

0

0

Part II: Demographic Background

 

African American or Black

1

0

0

0

Alaskan Native or Native American

0

0

0

0

Asian

0

0

0

0

Hispanic or Latinx

0

1

0

0

Native Hawaiian or Pacific Islander

0

0

0

0

White

3

2

0

0

Two or More Races or Ethnicities

0

0

0

0

LGBTQ+

1

Did Not Disclose Demographic Background

0

Board Committees

Our Board has three standing committees: the Audit Committee (“AC”), the Compensation and Human Capital Committee (“CHCC”), and the Nominating and Corporate Governance Committee (“NCGC”), each of which operate pursuant to a written charter adopted by our Board that is available on our corporate website (www.aquabounty.com) under “Investor Relations.”

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Audit Committee. Mses. St.Clare, Sharps Myers, Sharp and Mr. Sterling serve as members of our AC, and Ms. St.Clare serves as its chair. Each member of the AC satisfies the special independence standards for such committee established by the SEC and Nasdaq, as applicable. Ms. St.Clare is an “audit committee financial expert,” as that term is defined by the SEC in Item 407(d) of Regulation S-K. Stockholders should understand that this designation is an SEC disclosure requirement relating to Ms. St.Clare’s experience and understanding of certain accounting and auditing matters, which the SEC has stated does not impose on the director so designated any additional duty, obligation, or liability than otherwise is imposed generally by virtue of serving on the AC and/or our Board. No AC member is permitted to serve on the audit committee of more than two other public companies, unless the Board determines that such simultaneous service would not impair the ability of the AC member to effectively serve on our AC.  Our AC is responsible for, among other things, oversight of our independent auditors and the integrity of our financial statements. Our AC held four meetings in 2023.

Compensation and Human Capital Committee. Ms. Sharps Myers and Messrs. Alvarez and Sterling serve as members of our CHCC, and Ms. Sharps Myers serves as its chair. Our CHCC is responsible for, among other things, establishing and administering our policies, programs, and procedures for compensating our executive officers and Board. The CHCC may only delegate its authority to subcommittees of its members. None of the members of our CHCC is an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or CHCC. Our CHCC held four meetings in 2023.

Nominating and Corporate Governance Committee. Messrs. Alvarez and Stern, and Ms. St.Clare serve as members of our NCGC, and Mr. Alvarez serves as its chair. Our NCGC is responsible for, among other things, evaluating new director candidates and incumbent directors and recommending directors to serve as members of our Board committees. Our NCGC held four meetings in 2023.

Director Nominees

Our Board believes that the benefitsBoard should be composed of individuals with varied, complementary backgrounds who have exhibited proven leadership capabilities within their chosen fields. Directors should have the ability to quickly grasp complex principles of business and finance, particularly those related to our industry. Directors should possess the Companyhighest personal and our stockholders outweighprofessional ethics, integrity, and values and should be committed to representing the risks and recommends that you vote in favor of the Reverse Stock Split Proposal.

We cannot assure you that the proposed Reverse Stock Split, if effected, will increase our stock price. There can be no assurance that the total market capitalizationlong-term interests of our Common Stock (the aggregate value of all of our outstanding Common Stock atstockholders. When considering a candidate for director, the then market price after the Reverse Stock SplitNCGC will be equal to or greater than the total market capitalization before the Reverse Stock Split, or that the per share market price of our Common Stock following the Reverse Stock Split will either equal or exceed the current per share market price.

At August 1, 2023, the closing sale priceof our Common Stock on the Nasdaq Capital Market was $0.35 per share. Reducing the number of outstanding shares of our Common Stock through the Reverse Stock Split, if our Board decides to proceed with the Reverse Stock Split, is intended to increase the per share trading price of our Common Stock to exceed the minimum bid price requirement for continued listing on the Nasdaq Capital Market for at least the required period of time. However, we cannot assure you that the market price per share of our Common Stock after the Reverse Stock Split will rise or remain constant in proportion to the reduction in the number of shares of Common Stock outstanding before the Reverse Stock Split. Even if we implement the Reverse Stock Split, the per share trading price of our Common Stock may decrease due to factors unrelated to the Reverse Stock Split. The effect of the Reverse Stock Split on the per share trading price of our Common Stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies is varied, particularly since some investors may view a reverse stock split negatively. In many cases, the market price of a company’s shares declines after a reverse stock split, or the market price of a company’s shares immediately after a reverse stock split does not reflect a proportionate or mathematical adjustment to the market price based on the ratio of the reverse stock split. Other factors, such as our financial results, market conditions and the market perception of our business, may adversely affect the per share trading price of our Common Stock. Accordingly, the total market capitalization of our Common Stock and the Company after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split, and it is possible that the Reverse Stock Split may not result in a per share trading price that would attract investors who do not trade in lower priced stocks. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the benefits that we anticipate or that the per share trading price of our Common Stock will not decrease in the future.

The proposed Reverse Stock Split may decrease the liquidity of our Common Stock and result in higher transaction costs.

The liquidity of ourCommon Stock may be negatively impacted by the Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the per share trading

14


price does not increase proportionately as a result of the Reverse Stock Split. In addition, if the Reverse Stock Split is implemented, it will increase the number of our stockholders who own “odd lots” of fewer than 100 shares of Common Stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of Common Stock. In addition, although we believe the Reverse Stock Split may enhance the marketability of our Common Stock to certain potential investors, we cannot assure you that, if implemented, our Common Stock will be more attractive to investors. While our Board believes that a higher stock price may help generate the interest of new investors, the Reverse Stock Split may not result in a per-share price that will attract certain types of investors, such as institutional investors or investment funds, and such share price may not satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our Common Stock may not improve as a result of the Reverse Stock Split and could be adversely affected by a higher per share price. Accordingly, the Reverse Stock Split may not achieve the desired results of increasing marketability of our Common Stock as described above.

The proposed Reverse Stock Split may result in future dilution to our stockholders.

The Reverse Stock Split will reduce the number ofoutstanding shares of our Common Stock without a proportionate reduction in the number of shares of authorized but unissued Common Stock in our Charter, which will give us a larger number of authorized shares available to be issued in the future without further stockholder action, except as may be required by applicable laws or the rules of any stock exchange on which our Common Stock is listed. The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing stockholders and could also reduce stockholders’ equity on a per share basis. The issuance in the future of such additional authorized shares may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights, of the currently outstanding shares of Common Stock. In addition, the issuance or potential issuance of additional shares of Common Stock may have a depressive effect on the market price of our Common Stock. If Proposal 1 is adopted and approved and a Reverse Stock Split is effected, then depending ontake into account a number of factors, including, without limitation, the ratiofollowing: depth of understanding of our industry; education and professional background; judgment, skill, integrity, and reputation; existing commitments to other businesses as a director, executive, or owner; personal conflicts of interest, if any; diversity; and the size and composition of the Reverse Stock Splitexisting Board. Although the Board does not have a policy with respect to consideration of diversity in identifying director nominees, among the many other factors considered by the NCGC are the benefits of diversity in Board composition, including with respect to age, gender, race, and specialized background. When seeking candidates for director, the NCGC may solicit suggestions from incumbent directors, management, stockholders, and others. Additionally, the NCGC may use the services of third-party search firms to assist in the identification of appropriate candidates. During 2023, no director search fees were incurred. The NCGC will also evaluate the qualifications of all candidates properly nominated by stockholders, in the same manner and using the same criteria. A stockholder desiring to nominate a person for election to the Board must comply with the stock holding and advance notice procedures of our Amended and Restated Bylaws, as described in the proxy statement under the heading “Stockholder Proposals for 2025 Annual Meeting.”

Director Compensation

We believe that is effected,the compensation we provide to our Board could,is both competitive and in its discretion,line with that provided to boards of directors of similar companies in our industry. From time to time, the future consider submittingBoard will conduct a proposal for consideration at a future meetingmarket assessment of stockholders to reducedirector compensation.

For fiscal year 2023, the numberprevious Board Chair received prorated annual compensation of authorized shares$26,658 until his retirement on May 25, 2023.

For fiscal year 2023, all non-employee directors received an annual cash retainer of Common Stock$40,000, payable in the Charter.

Even if the Reverse Stock Split is effected, we may not be able to satisfy allfour quarterly installments. The Chair of the other requirements for continued listing of our Common Stock onAC received an additional $25,000, the Nasdaq Capital Market or other stock exchange.

As discussed above, the Board is submitting the Reverse Stock Split proposed to ourstockholders for approval with the primary intent of increasing the market price and minimum bid prices of our Common Stock to regain and maintain compliance with the listing requirementsChair of the Nasdaq Capital MarketCHCC and to make our Common Stock more attractive to a broader range of institutional and other investors. However, continued listing on such exchange requires compliance with a variety of other qualitative and quantitative listing standards. Even if we effect the Reverse Stock Split, we may not be able to satisfy or maintain listing requirements on the Nasdaq Capital Market or any other stock exchange. We cannot provide any assurances that we will be able to maintain a listingChair of the Common Stock on the Nasdaq Capital Market or any other stock exchange.

As we are not reducing the number of our authorized preferred sharesNCGC each received an additional $15,000, and are not proportionally reducing our authorized common shares, the Reverse Stock Split could make a change of control more difficult because we will have the right to issue proportionally more shares.

The Reverse Stock Split will not change the number of authorized shares of our preferred shares, as designated by our Certificate of Incorporation. Our Certificate of Incorporation authorizes us to issue 1 or more series of preferred stock, which we are not changing in the Reverse Stock Split. Our Board has the authority to determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of

15


our Common Stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our Common Stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Common Stock.

The availability of proportionately more authorized but unissued shares of Common Stock may enable our Board to render it more difficult, or discourage an attempt to obtain control of the Company, which may adversely affect the market price of our Common Stock. If in the due exercise of its fiduciary obligations, for example, our Board were to determine that a takeover proposal were not in our best interests, such shares could be issued by the Board without stockholder approval in (i) one or more private placements or other transactions that might prevent, render more difficult or make more costly the completion of any attempted takeover transaction by diluting voting or other rights of the proposed acquirer or insurgent stockholder group or creating a substantial voting bloc in institutional or other hands that might support the position of the incumbent Board or (ii) an acquisition that might complicate or preclude the takeover.

The Reverse Stock Split is not being recommended by our Board as part of an anti-takeover strategy, but rather its principal purpose is for our Company to maintain compliance with Nasdaq Capital Market’s listing standards to maintain the listing of our Common Stock and to make such shares more attractive to a broader group of investors.

Future issuances of Common Stock by the Company may have an adverse effect on the market price of the Common Stock.

While the Authorized Capital Change will reduce the number of shares authorized for issuance on an absolute basis, it will have the effect of increasing the number of shares of Common Stock authorized for issuance relative to the number of shares outstanding. We may issue a substantial number of these shares of the Common Stock under our outstanding options and other equity securities, as well as under our existing equity compensation plans. In addition, we may issue additional shares of Common Stock in future financings. Any of the foregoing issuances will dilute our existing stockholders. Furthermore, the trading price of the Common Stock could decline as a result of sales of such shares of Common Stock, or the perception that such sales could occur.

Certain Material U.S. Federal Income Tax Considerationsmembers of a Reverse Stock Split

The following is a general summaryboard committee received an additional $5,000 for each committee on which they served. All additional cash payments are paid in four quarterly installments.  All non-employee directors received an annual grant of certain material U.S. federal income tax considerations relatingoptions to the Reverse Stock Split that may be relevant to holders of our Common Stock. This summary only addresses a U.S. Holder (as defined below) who holds Common Stock as a capital asset for U.S. federal income tax purposes.

For purposes of this summary, a “U.S. Holder” means a beneficial owner of Common Stock who is any of the following for U.S. federal income tax purposes: (i) a citizen or resident of the United States, (ii) a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (1) its administration is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all of its substantial decisions, or (2) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

16


This summary is based upon provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, rulings and judicial decisions as of the date hereof, all of which may be change, perhaps retroactively, so as to result in U.S. federal income tax considerations different from those summarized below. This summary is general in nature and does not represent a detailed description of the U.S. federal income tax considerations to a stockholder in light of their particular circumstances. In addition, it does not represent a description of the U.S. federal income tax Considerations to a stockholder who is subject to special treatment under the U.S. federal income tax laws and does not address the tax considerations applicable to U.S. Holders who may be subject to special tax rules, such as:

Partnerships (or entities or arrangements treated as partnerships for U.S. federal income tax purposes) and any beneficial owners thereof;

financial institutions or financial services entities;

insurance companies;

real estate investment trusts;

regulated investment companies;

grantor trusts;

tax-exempt organizations;

governments or agencies or instrumentalities thereof;

brokers, dealers or traders in securities or currencies;

stockholders who hold Common Stock as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes;

U.S. Holders that have a functional currency other than the U.S. dollar;

stockholders who actually or constructively own five percent or more of the Company’s voting stock;

U.S. expatriates; or

stockholders who acquirepurchase 125 shares of our Common Stock in connection with employment or other performance of services.

Moreover, this description does not address any aspect of U.S. state or local tax, non-U.S. tax, the Medicare tax on net investment income, U.S. federal estate and gift tax, alternative minimum tax, or other U.S. federal income tax consideration or other tax consequences of the Reverse Stock Split.

If(with an entity classified as a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) for U.S. federal income tax purposes holds common stock, the tax treatment of an equity holders in such entity will generally depend on the status of such equity holder and the activities of such entity.

We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service (“IRS”) regarding the U.S. federal income tax consequences of the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or a court would not sustain any such challenge.

EACH STOCKHOLDER SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE PARTICULAR U.S. FEDERAL TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT, AS WELL AS THE CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION, INCLUDING ANY U.S. STATE OR LOCAL OR NON-U.S. TAX CONSEQUENCES.

17


Tax Consequences to the Company

The Reverse Stock Split is intended to be treated as a tax deferred “recapitalization” for U.S. federal income tax purposes. If the Reverse Stock Split qualifies as a recapitalization, then the Company will not recognize gain or loss as a result of the Reverse Stock Split.

Tax Consequences to U.S. Holders of the Reverse Stock Split

If the Reverse Stock Split qualifies as a recapitalization, then a U.S. Holder generally will not recognize gain or loss on the Reverse Stock Split. In general, the aggregate tax basis of the post-split shares received will beexercise price equal to the aggregate tax basisfair market value on the date of grant), with vesting daily through the date of the next annual meeting and a grant of $20,000 of restricted share units that vest at the date of the next annual meeting.

pre-split11 shares exchanged therefor


The following table discloses all compensation provided to the non-employee directors for the most recently completed fiscal year ended December 31, 2023:

Director Summary Compensation Table



 

 

 

 

 

 



 

 

 

 

As of December 31, 2023



Fees earned or

Stock

Option

 

Unvested

Unexercised



paid in cash

Awards (2)

Awards (2)

Total

Stock

Stock

Name

($)

($)

($)

($)

Awards

Options

R. Clothier (1)

$            26,658

$                  -

$                  -  

$            26,658

                   -              

                     -  

R. Alvarez

              67,500

           20,000  

               900

              88,400

            2,778  

                355

E. Sharp

              45,000

           20,000  

               900

              65,900

            2,778  

                250

G. Sharps Myers

              60,000

           20,000     

               900

              80,900

            2,778  

                325

C. St.Clare

              70,000

           20,000

               900

              90,900

            2,778 

             1,165

R. Sterling

              50,000

           20,000  

               900

              70,900

            2,778  

                475

M. Stern

              45,000

           20,000        

               900

              65,900

            2,778 

                250

Total

            364,158

         120,000

            5,400

            489,558

          16,668

             2,820

(1)

Mr. Clothier stepped down from the Board on May 25, 2023 and received a pro-rated fee for his time of service.

(2)

The amounts in these columns represent the grant date fair value of stock awards and stock options granted in 2023, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718.  For a discussion of the assumptions used in calculating these values, see Note 8 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024. 

Vote Required

The election of our directors requires a plurality vote.  Director nominees are nominated to serve on our Board for a one-year term, to hold office until the next annual meeting of our stockholders or until the election and qualification of his or her successor and subject to his or her earlier death, disqualification, resignation or removal.  Each nominee must receive at least one FOR vote, and the holding periodseven nominees receiving the highest number of FOR votes are elected.  In an uncontested election, where the number of nominees and available board seats are equal, election requires only a single vote or more.

12


PROPOSAL 2:

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Board recommends that stockholders vote FOR the ratification of the

appointment of Deloitte & TOUCHE LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024.

The Audit Committee (“AC”) of the post-split shares received will includeBoard has appointed the holding periodfirm of Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024, and is asking the stockholders to ratify this appointment.

The AC believes that the retention of Deloitte for the 2024 fiscal year is in the best interest of us and our stockholders. One or more representatives of Deloitte are expected to be present at the Annual Meeting with the opportunity to make a statement if they so desire and to be available to respond to appropriate questions.

In the event the stockholders fail to ratify the appointment of Deloitte as our independent registered public accounting firm, the AC may reconsider its selection.

Principal Accountant Fees and Services

The following table summarizes the fees billed by Deloitte for the fiscal years ended December 31, 2023 and 2022:



 

 



 

 



      Year Ended December 31,



                           2023

                 2022

Audit Fees (1)

$                       537,500

$             529,721

Audit-Related Fees (2)

                         100,000

                          -

Tax Fees (3)

                           57,501

                 51,042  

Total

$                       695,001

$             580,763

(1)

Represents fees incurred for the audit of our consolidated financial statements and quarterly reviews.

(2)

Represents fees for services related to other filings with the SEC.

(3)

Represents fees incurred for tax preparation and tax-related compliance services.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services

Under its charter, the AC must pre-approve all engagements of our independent registered public accounting firm, unless an exception to such pre-approval exists under the Exchange Act or the rules of the pre-split shares exchanged. Treasury regulations promulgated underSEC. The AC has delegated to its Chair the Code provide rulesauthority to evaluate and approve service engagements on behalf of the full AC in the event a need arises for allocatingspecific pre-approval between AC meetings. All of the audit, audit-related, and tax basis and holding periodservices provided by our independent registered public accounting firm for the 2023 fiscal year were approved by the AC in accordance with the foregoing procedures.

Vote Required

The affirmative vote of the holders of a majority of the shares of our Common Stock surrenderedpresent in person or represented by proxy at the annual meeting and entitled to vote on the sharesmatter and which has been voted is required to ratify the appointment of Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024.

13


PROPOSAL 3:

NON-BINDING, ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

Our Board recommends a vote FOR the approval, on a non-binding, advisory basis, of THE COMPENSATION OF our named executive officerS as disclosed in this proxy statement.

As required by Section 14A of the Exchange Act, we are asking our stockholders to vote to approve, on a non-binding, advisory basis, the compensation of our Common Stock received pursuantnamed executive officers as disclosed in this proxy statement.

As described in detail under the heading “Executive Compensation,” we seek to closely align the Reverse Stock Split. U.S. Holders of sharesinterests of our Common Stock acquired on different datesnamed executive officers with the interests of our stockholders. Our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic goals, while at different prices should consult their tax advisors regarding the allocationsame time avoiding the encouragement of the tax basis and holding period of such shares.unnecessary or excessive risk-taking.

A U.S. Holder who would otherwise receive a fractional shares resulting from the Reverse Stock Split and who is issued an additional fraction of a share such that the fraction resulting from the Reverse Stock Split is effectively rounded up to the nearest whole share may recognize gain for U.S. federal income tax purposes equal to the value of the additional fractional share. The treatment of the issuance of a fractional share that effectively results in fractions resulting from the Reverse Stock Split being rounded up to a whole share is not clear under current law and a U.S. Holder may recognize gain for U.S. federal income tax purposes equal to the value of the additional fraction of a share of Common Stock received by such U.S. Holder.

Other Tax Considerations for U.S. Holders

The U.S. state and local tax consequences of the Reverse Stock Split may vary significantly as to each U.S. Holder depending upon the jurisdiction in which such holder resides. U.S. HoldersStockholders are urged to consult their tax advisors regardingread the “Executive Compensation” section of this proxy statement, which discusses how our executive compensation policies and procedures implement our compensation philosophy and contain tabular information and narrative discussion about the compensation of our named executive officers. Our Board and the Compensation and Human Capital Committee believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving our compensation program goals.

The vote on this resolution is not intended to address any specific tax consequences to themelement of compensation but rather the Reverse Stock Split, including the applicable U.S. federal, state and local and non-U.S. tax consequences, if any.

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT DEPEND UPON THE PARTICULAR CIRCUMSTANCES OF EACH U.S. HOLDER. ACCORDINGLY, EACH U.S. HOLDER IS ADVISED TO CONSULT THE HOLDER’S TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES TO THE U.S. HOLDER OF A REVERSE STOCK SPLIT.

Interestsoverall compensation of Directors and Executive Officers

Our directors andour named executive officers have no substantial interests, directly or indirectly, inand the matters set forthphilosophy, policies and practices described in this Proposal 1proxy statement. The vote is advisory, which means that arethe vote is not shared by all of our other stockholders, except to the extent of their ownership of shares of our Common Stock and other securities exercisable or exchangeable therefor. We have not proposed the Reverse Stock Split Proposal in response to any effort of which we are aware to accumulate our shares of our Common Stock or obtain control of our Company, nor is it a plan by management to recommend a series of similar actions tobinding on us, our Board or our stockholders. Notwithstanding the expected decrease inCompensation and Human Capital Committee. As such, the number of outstanding shares of common stock following the Reverse Stock Split, our Board does not intend for this transaction to be the first step in a “going private transaction” within the meaning of Rule 13e-3results of the Exchange Act.vote will not be construed to create or imply any change to the fiduciary duties of our Board. Although non-binding, the Board and the Compensation and Human Capital Committee value the opinions that stockholders express in their votes and will review the voting results and take them into consideration as they deem appropriate when making future decisions regarding our executive compensation program.

At our 2023 annual meeting of stockholders, our stockholders supported, on an advisory basis, the Board’s proposal that the say-on-pay advisory vote occur on an annual basis. Although annual say-on-pay advisory votes are not required by our bylaws, the Board currently believes that having our stockholders provide annual feedback on our compensation practices supports effective governance. As a result, and in light of the overwhelming support of our stockholders, the next say-on-pay advisory vote is expected to occur in 2025.

Accordingly, we are asking our stockholders to vote FOR the following resolution:

“RESOLVED, that the compensation paid to the Named Executive Officers of AquaBounty Technologies, Inc., as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion, is hereby approved on a non-binding, advisory basis.”

Vote Required

The approval of Proposal 1, the Reverse Stock Split Proposal, will requirethis non-binding, advisory proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote thereon.

18


PROPOSAL 2:

ADJOURNMENT PROPOSAL

OUR BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR

THE ADJOURNMENT PROPOSAL.

Stockholders are being asked to consider and vote upon an adjournment by stockholders of the Special Meeting from time to time, if necessary or advisable (as determined by the Company), to solicit additional proxies in the event there are not sufficient votes at the time of the Special Meeting to approve the Reverse Stock Split Proposal as described in Proposal 1.

Vote Required

The approval of Proposal 2, the Adjournment Proposal, will require the affirmative vote of the holders of a majority of the outstanding shares ofour Common Stock present in person or represented by proxy at the Special Meetingannual meeting and entitled to vote on the Adjournment Proposalmatter and which have actuallyhas been voted.



19

14



OTHER MATTERS

We do not know of any matters to be presented at the 2024 annual meeting of stockholders other than those mentioned in this proxy statement. If any other matters properly come before the annual meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as our Board recommends.

15


OWNERSHIP OF SECURITIES

The following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of JulyMarch 31, 2023,2024, by (i) each person who, to our knowledge, beneficially owns 5% or more of the outstanding shares of our Common Stock, (ii) each of our directors, (iii) each named executive officer (as listed in the Summary Compensation Table, includedwhich appears later in the 2023 Annual Meeting Proxy Statement)this proxy statement), and (iv) all current directors and executive officers as a group. None of the shares reported as beneficially owned by our directors or executive officers are currently pledged as security for any outstanding loan or indebtedness.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws. The table lists applicable percentage ownership based on 71,358,2493,857,444 shares of our Common Stock outstanding as of JulyMarch 31, 2023.2024. The number of shares beneficially owned includes shares of our Common Stock that each person has the right to acquire within 60 days of JulyMarch 31, 2023,2024, including upon the vesting of stock awards and the exercise of stock options. These stock awards and options are deemed outstanding for the purpose of computing the percentage of outstanding shares of our Common Stock owned by such person but are not deemed outstanding for the purpose of computing the percentage of outstanding shares of our Common Stock owned by any other person.



0

 

 

 

 

Number of

 

Shares

 

Beneficially

Percent

Name and address of beneficial owner (1)

  Number of Shares
Beneficially Owned (2)
   Percent
of Class
 

Owned (2)

of Class

Ricardo Alvarez

       15,361        

                2,244

               *

Erin Sharp

     134,778        

                8,214

               *

Gail Sharps Myers

       15,190        

                2,236

               *

Christine St.Clare

       31,578        

                3,054

               *

Rick Sterling

         9,073        

                1,929

               *

Michael Stern

       38,278        

                3,389

               *

Sylvia Wulf

     495,031        

              28,749

               *

David Frank

     196,828        

              12,292

               *

Angela Olsen

     129,823        
  

 

   

 

 

David Melbourne

              11,028

               *

Executive officers and directors as a group (10 persons)

   1,212,313    1.7

              91,583

           2.3%

  

 

   

 

 



*

Indicates beneficial ownership of less than one percent of the total outstanding shares of our Common Stock.

(1)

*Indicates beneficial ownership of less than one percent of the total outstanding shares of our Common Stock.

(1) Unless otherwise indicated, the address for each beneficial owner is c/o AquaBounty Technologies, Inc., 2 Mill & Main Place, Suite 395, Maynard, MA 01754.

(2)

Beneficial ownership includes:

Includes for Dr. Alvarez 5,361each beneficial owner is c/o AquaBounty Technologies, Inc., 233 Ayer Road, Suite 4, Harvard, MA 01451.

(2) Beneficial ownership includes shares of Common Stock to be issued pursuant to the vesting of outstanding stock awards and Common Stock issuable upon the exercise of stock options within 60 days of JulyMarch 31, 2024:

·

Stock Awards

·

Includes 1,389 shares each for Dr. Alvarez, Ms. Sharp, Ms. Sharps Myers, Ms. St.Clare, Mr. Sterling, and Mr. Stern.

·

Stock Options

·

Includes 20 shares each for Dr. Alvarez, Ms. Sharp, Ms. Sharps Myers, Ms. St.Clare, Mr. Sterling, and Mr. Stern.

·

Includes 421 shares for Ms. Wulf.

·

Includes 257 shares for Mr. Frank.

·

Includes 247 shares for Mr. Melbourne.

·

Includes 1,534 shares for our directors and executive officers as a group.

16


EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2023, with respect to the shares of our common stock that may be issued under our existing equity compensation plans:



 

 

 

 

 

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights (2)

 

Weighted-average exercise price of outstanding options, warrants and rights (3)

 

Number of securities remaining available for future issuance under equity compensation plans (4)

Equity compensation plans approved by security holders (1)

75,669 

 

$                                41.65 

 

                               68,280

Equity compensation plans not approved by security holders

                                        -  

 

$                                       -  

 

                                        -  

Total

75,669 

 

$                                41.65 

 

                               68,280

(1)

Consists of the Company’s 2006 Equity Incentive Plan (the “2006 Plan”) and the Company’s 2016 Equity Incentive Plan (“2016 Plan”).

(2)

Includes 1,460 outstanding options under the 2006 Plan and 74,209 outstanding options under the 2016 Plan.

(3)

As of December 31, 2023, the weighted average exercise price of outstanding options under the 2006 Plan was $384.67, and the weighted average exercise price of outstanding options under the 2016 Plan was $34.90.

(4)

Represents shares of the Company’s common stock that remain available for issuance under the 2016 Plan.  The 2006 Plan terminated on March 18, 2016, and there are no shares of common stock reserved for future awards under the 2006 Plan.

17


EXECUTIVE COMPENSATION

We are a “smaller reporting company” under SEC rules, and as such, we are not required to include a Compensation Discussion and Analysis section in this proxy statement and have elected to comply with the reduced disclosure requirements applicable to smaller reporting companies. We are evaluating the need for revisions to our executive compensation program to ensure our program is competitive with those of the companies with which we compete for executive talent and is appropriate for a public company.

Named Executive Officers

The tables and discussion below present compensation information for our chief executive officer and our two other most highly compensated officers for the year ended December 31, 2023 (“fiscal year 2023”), all of whom we refer to collectively as our named executive officers. These officers are:

Name

Age

Position

Sylvia A. Wulf

66

Chief Executive Officer

David F. Melbourne

57

President

David A. Frank

63

Chief Financial Officer

Summary Compensation Table

The following table provides certain summary information concerning the compensation paid to our named executive officers in the fiscal years ended December 31, 2023 and 2022.

2

 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

 

Option

Awards

Non-Equity Incentive Plan Compensation

All other

Compensation

 



 

Salary

Stock Awards

Total

Name and Position

Year

($) (1)

($) (2)

($) (2)

($) (3)

($) (4)

($)

S. Wulf

2023 429,762 48,000 10,535 

                    -  

8,360 496,657 

CEO

2022 409,693 64,000 41,449 30,000 8,415 553,557 

D. Melbourne

2023 332,646 28,848 6,331 

                   -  

9,979 377,804 

President

2022 298,817 35,010 22,672 18,030 8,964 383,493 

D. Frank

2023 319,497 28,911 6,345 

                    -  

9,585 364,338 

CFO

2022 299,469 40,934 26,511 18,069 8,984 393,967 

(1)

Represents salaries before any employee contributions under our 401(k) plan.

(2)

The amounts in these columns represent the grant date fair value of stock awards and stock options granted in 2023 and 2022, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. For a discussion of the assumptions used in calculating these values, see Note 8 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024.

(3)

Amounts represent performance-based annual cash bonuses determined by our Board for the named executive officers for fiscal year 2023.

(4)

Amounts in this column reflect 401(k) matching contributions.

As of December 31, 2023, the base salaries of Ms. Wulf, Mr. Melbourne and Mr. Frank were $432,600, $375,000, and $325,000, respectively. As of December 31, 2022, the base salaries of Ms. Wulf, Mr. Melbourne and Mr. Frank were $412,000, $300,000, and $301,156, respectively. Base salaries are used to recognize the experience, skills, knowledge, and responsibilities required of all of our employees, including our named executive officers. Certain of our named executive officers are currently party to an employment agreement that provides for the continuation of certain compensation upon termination of employment. See “-Employment Agreements.”

For 2023, each of our named executive officers was eligible to earn an annual cash bonus to compensate them for attaining short-term Company and individual goals as approved by our Board.  For 2023, bonuses were determined based on attaining strategic and financial Company goals, weighted 70% in the aggregate, and individual goals, weighted 30%. The 2023 target bonuses for each of Ms. Wulf and Messrs. Melbourne and Frank were 50%, 40% and 40%, respectively, of his or her annual base salary.  Each individual’s respective target bonus was set by the Board. The actual annual cash bonuses awarded to the named executive officers for 2023 performance, as determined by our Board, are set forth above in the 2023 Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” Our Board makes the final determination of the eligibility requirements for and the amounts of such bonus awards.

18


Although we do not have a formal policy with respect to the grant of equity incentive awards to our executive officers, or any formal equity ownership guidelines applicable to them, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture, and help to align the ownership interests of our executives and our stockholders. In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our executive officers to remain in our employment during the vesting period. Compensation decisions for the officers other than the CEO are made by the CHCC in consultation with the CEO.

Outstanding Equity Awards at Fiscal Year End

The following table provides certain summary information concerning outstanding equity awards held by our named executive officers as of December 31, 2023.

9

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

Option Awards

 

Stock Awards (1)

Name and Position

Grant Date

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying options (#) unexercisable

 

Option Exercise Price

Option Vesting Date (3)

Option Expiration Date

 

Number of shares or units that have not vested (2)

 

Market value of shares or units of stock that have not vested ($)

S. Wulf

30-Apr-2019

7,501 

 

 

$       44.40

30-Apr-2020

30-Apr-2029

 

 

 

 

CEO

12-Mar-2020

1,583 

 

 

$       37.60

12-Mar-2023

12-Mar-2030

 

 

 

 



10-Mar-2021

377 26 

 

$     134.40

10-Mar-2024

10-Mar-2031

 

 

 

 



14-Mar-2022

1,106 737 

 

$       30.40

14-Mar-2025

14-Mar-2032

 

 

 

 



14-Mar-2022

 

 

 

 

 

 

 

702 

 

2,001 



9-Mar-2023

 

 

 

 

 

 

 

2,449 

 

6,980 



14-Jun-2023

1,439 4,395 

 

$         7.20

9-Mar-2026

9-Mar-2033

 

 

 

 

D. Melbourne

17-Jun-2019

750 

 

 

$        42.40

17-Jun-2020

17-Jun-2029

 

 

 

 

President

2-Jan-2020

750 

 

 

$        49.40

2-Jan-2021

2-Jan-2030

 

 

 

 



12-Mar-2020

640 

 

 

$        37.60

12-Mar-2023

12-Mar-2030

 

 

 

 



10-Mar-2021

242 17 

 

$      134.40

10-Mar-2024

10-Mar-2031

 

 

 

 



14-Mar-2022

605 403 

 

$        30.40

14-Mar-2025

14-Mar-2032

 

 

 

 



14-Mar-2022

 

 

 

 

 

 

 

384 

 

1,094 



9-Mar-2023

 

 

 

 

 

 

 

1,472 

 

4,195 



14-Jun-2023

864 2,642 

 

$          7.20

9-Mar-2026

14-Jun-2033

 

 

 

 

D. Frank

20-Jan-2014

334 

 

 

$      468.00

20-Jan-2017

20-Jan-2024

 

 

 

 

CFO

21-Apr-2017

500 

 

 

$      284.00

21-Apr-2020

21-Apr-2027

 

 

 

 



27-Feb-2018

758 

 

 

$        50.00

27-Feb-2019

27-Feb-2028

 

 

 

 



30-Apr-2019

1,000 

 

 

$        44.40

30-Apr-2020

30-Apr-2029

 

 

 

 



12-Mar-2020

642 

 

 

$        37.60

12-Mar-2023

12-Mar-2030

 

 

 

 



10-Mar-2021

243 16 

 

$      134.40

10-Mar-2024

10-Mar-2031

 

 

 

 



14-Mar-2022

707 472 

 

$        30.40

14-Mar-2025

14-Mar-2032

 

 

 

 



14-Mar-2022

 

 

 

 

 

 

 

449 

 

1,280 



9-Mar-2023

 

 

 

 

 

 

 

1,475 

 

4,204 



14-Jun-2023

866 2,648 

 

$          7.20

9-Mar-2026

9-Mar-2033

 

 

 

 



(1)

The market value of stock awards that have not vested is based on the number of shares subject to the stock award outstanding times the closing price of our Common Stock on the Nasdaq Capital Market on December 31, 2023.

(2)

Represents restricted stock units that vest as to 1/3 of the grant on the date of grant, 1/3 of the grant after one year from the date of grant and the remaining 1/3 of the grant after two years from the date of grant.

(3)

Option awards granted in 2018 and 2019 vested daily over a one-year period. Option awards granted in 2023 vest daily over a period ending on March 9, 2026. All other option awards vest daily over a three-year period.

Includes

Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing information about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and the other named executive officers (“NEOs”), as calculated in accordance with Item 402(v) of Regulation S-K, and certain financial performance measures.

19


Pay Versus Performance Table



 

 

 

 

 

 



 

 

 

 

 

 

Year

 

 

 

 

Summary

Compensation

Table Total for

PEO (1)

 

Compensation

Actually Paid

to PEO (2)

 

 

Average Summary

Compensation

Table Total for

Non-PEO NEOs (3)

Average

Compensation

Actually Paid to

Non-PEO NEOs (2)

Value of Initial

Fixed $100

Investment Based on Total

Shareholder Return

Net

Income

 

 

 

(a)

(b)

(c)

(d)

(e)

(f)

(g)

2023

$       496,657

$        440,248

$                  371,071

$                 336,874

$                     7

$(27,211,715)

 2022

$       553,557

$        497,394

$                  394,753

$                 361,534

$                   35

$(22,157,195)

2021

$       549,616

$        313,378

$                  392,195

$                 321,399

$                   97

$(22,322,588)

(1)

The amounts reported in column (b) are the amounts of total compensation reported for Sylvia Wulf for each corresponding year in the “Total” column of the Summary Compensation Table (“SCT”).

(2)

Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below).

(3)

The amounts reported in column (d) represent the average of the amounts reported for our Non-PEO NEOs as a group in the “Total” column of the SCT in each applicable year. The Non-PEO NEOs for 2023 were David Melbourne and David Frank and the Non-PEO NEOs for 2022 and 2021 were David Frank and Angela Olsen.

In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments made to derive compensation actually paid to our PEO and non-PEO NEOs are contained in the following table:



 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

PEO

Non-PEO NEOs



 

2023

2022

2021

2023

2022

2021

Total Compensation

$496,657 $553,557 $549,616 $371,071 $394,753 $392,195 

Equity Adjustments:

 

 

 

 

 

 

 Less FV of CY RS

(48,000)(64,000)(61,800)(28,880)(41,016)(39,823)

 Less FV of CY Options

(29,262)(44,180)(39,398)(17,605)(28,311)(25,369)

 Add YE FV of unvested RS

6,980 21,453 12,894 4,199 13,752 8,316 

 Add YE FV of unvested Options

7,037 12,899 6,708 4,235 8,266 4,319 

 Change in FV of PY unvested RS

(8,726)(4,115)(80,320)(5,177)(2,659)(16,317)

 Change in FV of PY unvested Options

(6,060)(3,476)(68,409)(3,880)(1,641)(13,879)

 Add CY Vested RS

16,004 21,333 20,555 9,629 13,662 13,229 

 Add CY Vested Options

10,219 10,278 9,210 6,143 6,586 5,931 

 Add PY Vested RS

(10,640)(20,200)(80,320)(6,420)(5,905)(16,250)

 Add PY Vested Options

6,040 13,845 44,640 3,559 4,047 9,046 

Actual Compensation

$440,248 $497,394 $313,378 $336,874 $361,534 $321,399 

20


Description of the Relationship Between Compensation Actually Paid and Selected Performance Metric

We believe it is critical for our long-term performance that the compensation program for our executive officers is structured to attract, retain and motivate the talent necessary for our continued growth and success.  The compensation for our PEO and NEOs includes salary, non-equity incentives and stock and option awards.  The equity incentive programs we have in place are intended to build stockholder value by tying the interests of our executive officers to the success of the Company as “owners” of our business.  The charts below depict the relationship between the executive compensation actually paid to our PEO and our non-PEO NEOs and our net income and the value of an initial fixed $100 investment based on Total Shareholder Return (“TSR”) for the three-year period of 2021 through 2023.

Picture 1

Employment Agreements

We have entered into employment agreements with each of Ms. Sharp 3,278Wulf, and Messrs. Melbourne and Frank. Each agreement provides for the payment of a base salary; an annual bonus opportunity based on a percentage of the executive’s salary, with any bonus payout determined at the discretion of our Board based on achievement of financial targets and other performance criteria; and certain other forms of benefits and compensation. Ms. Wulf’s agreement also included a one-time grant of an option to purchase 150,000 shares of our Common Stock and restricted shares of our Common Stock worth $350,000.

Each employment agreement remains in effect unless and until terminated in accordance with the terms and conditions set forth in the agreement. Each agreement provides that employment may be terminated by either us or the individual with no less than thirty days’ notice to the other party. If the individual’s employment is terminated by us without cause or by the individual for good reason, as those terms are defined in the employment agreement, the individual would be paid one year of continued base salary, starting on the date of termination and a prorated earned bonus payment. In addition, if such termination occurs within 12 months following the occurrence of a change in control (as such term is defined in the employment agreement), the agreement also provides for 100% acceleration of stock option and restricted share grants. Receipt of the severance payments and benefits described above is subject to the individual’s execution of a release of claims and continued compliance with a non-disparagement covenant. Under each agreement, we may terminate the individual’s employment without notice or payment at any time for cause.

401(k) Plan

We provide an employee retirement plan under Section 401(k) of the Internal Revenue Code (the “401(k) plan”), to all U.S. employees who are eligible employees as defined in the 401(k) plan. Subject to annual limits set by the Internal Revenue Service, we match 50% of eligible employee contributions up to a maximum of 3% of an employee’s salary, and vesting in our match is immediate. We made contributions in connection with the 401(k) plan during the years ended December 31, 2023 and 2022, of $113,255 and $94,278, respectively.

Registered Retirement Savings Plan

We also have a Registered Retirement Savings Plan for our Canadian employees. Subject to annual limits set by the Canadian government, we match 50% of eligible employee contributions up to a maximum of 3% of an employee’s salary, and vesting in our match is immediate. We made contributions in connection with this plan during the years ended December 31, 2023 and 2022, of $45,210 and $44,038, respectively.

Indemnification of Officers and Directors

We have agreed to indemnify our directors and officers in certain circumstances. See “Related-Party Transactions, Policies, and Procedures- Agreements with Our Directors and Executive Officers.”

21


Compensation Risk Assessment

We believe that although a portion of the compensation provided to our executive officers and other employees is performance-based, our executive compensation program does not encourage excessive or unnecessary risk taking. This is primarily due to the fact that our compensation programs are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals, in particular in connection with our pay-for-performance compensation philosophy. As a result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.

22


RELATED PERSON TRANSACTIONS, POLICIES, AND PROCEDURES

In addition to the director and executive compensation arrangements discussed above in the sections titled “Proposal 1 - Election of Directors” and “Executive Compensation,” we have been a party to the following transactions since January 1, 2022, in which the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years, and in which any director, executive officer, or holder of more than 5% of any class of our voting stock, or any member of the immediate family of or entities affiliated with any of them, had or will have a direct or indirect material interest. We also describe below certain transactions and series of similar transactions since January 1, 2022, with our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the immediate family of or any entities affiliated with any of the foregoing persons to which we are party.

Agreements with Our Directors and Executive Officers

For more information regarding employment agreements with certain of our executive officers, see ‘‘Executive Compensation - Employment Agreements.’’

We have entered into agreements to indemnify our directors and executive officers. These agreements will, among other things, require us to indemnify these individuals for certain expenses (including attorneys’ fees), judgments, fines, and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on behalf of our Company or that person’s status as a member of our Board to the maximum extent allowed under Delaware law.

Letter Agreement with TS Aquaculture

On July 30, 2021, we entered into a letter agreement (the “Letter Agreement”) with TS Aquaculture and certain of its affiliates that required us to file a registration statement to register the shares of Common Stock issuableheld by TS Aquaculture and certain of its affiliates and keep it effective for a period of not less than 24 months.  The registration statement was filed on August 5, 2021.  TS Aquaculture agreed to pay all expenses incurred in connection with such registration statements.

The entry into the Letter Agreement constituted a transaction with a “related person” as defined by Item 404 of Regulation S-K because TS Aquaculture was an affiliate at that time and had appointed three members of our Board.  Pursuant to our policy, the Audit Committee (“AC”) was responsible for the review and approval of this transaction. After it had reviewed and considered all relevant facts and circumstances, including, but not limited to, whether the transaction was on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.  As a result, entry into the Letter Agreement and this transaction was approved by the disinterested members of our Board on July 27, 2021, upon exercisethe recommendation of stock options within 60 days ofthe AC.

On July 31, 2023.

Includes30, 2023, the registration statement filed pursuant to the Letter Agreement for Ms. Sharps Myers 4,764 shares ofthe Common Stock issuable upon exerciseheld by TS Aquaculture and certain of stock options within 60 days of July 31, 2023.its affiliates terminated pursuant to its terms.

Includes for Ms. St.Clare 21,578 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.

Includes for Mr. Sterling 7,778 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.



20


IncludesPolicies and Procedures for Mr. Stern 3,278 sharesReview of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.Related Person Transactions

Includes for Ms. Wulf 223,020 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.

Includes for Mr. Frank 90,551 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.

Includes for Ms. Olsen 61,008 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.

Includes for our directors and executive officers as a group 524,428 shares of Common Stock issuable upon exercise of stock options within 60 days of July 31, 2023.



21


OTHER MATTERS

We do not knowOur Board has adopted a written policy with respect to related person transactions. This policy governs the review, approval, and ratification of any matters to be presented at the Special Meeting other than those mentioned in this Proxy Statement. If any other matters properly come before the Special Meeting, it is the intentioncovered related person transactions. The AC of the persons namedBoard manages this policy.

For purposes of this policy, a “related person transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which we (or any of our subsidiaries) were, are, or will be a participant, and in which any related person had, has, or will have a direct or indirect interest. For purposes of determining whether a transaction is a related person transaction, the enclosed formAC relies upon Item 404 of proxy to voteRegulation S-K promulgated under the shares they represent as our Board recommends.Exchange Act.

A “related person” is defined as:



·

any person who is, or at any time since the beginning of our last fiscal year was, one of our directors or executive officers or a nominee to become one of our directors;

·

any person who, at the time of the occurrence or existence of the transaction, is known to be the beneficial owner of more than 5% of any class of our voting securities;

·

any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee, or more- than-five-percent beneficial owner and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee, or more-than-five-percent beneficial owner.

23


The policy generally provides that we may enter into a related person transaction only if:

·

the AC pre-approves such transaction in accordance with the guidelines set forth in the policy;

·

the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party, and the AC (or the chair of the AC) approves or ratifies such transaction in accordance with the guidelines set forth in the policy;

·

the transaction is approved by the disinterested members of the Board; or

·

the transaction involves compensation approved by the Compensation and Human Capital Committee of the Board.

If a related person transaction is not pre-approved by the AC, and our management determines to recommend such related person transaction to the AC, such transaction must be reviewed by the AC. After review, the AC will approve or disapprove such transaction. In addition, the AC reviews the policy at least annually and recommends amendments to the policy to the Board from time to time.

The policy provides that all related person transactions will be disclosed to the AC and all material related person transactions will be disclosed to the Board. Additionally, all related person transactions requiring public disclosure will be properly disclosed in our public filings.

The AC will review all relevant information available to it about the related person transaction. The policy provides that the AC may approve or ratify the related person transaction only if the AC determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, our best interests. The policy provides that the AC may, in its sole discretion, impose such conditions as it deems appropriate on us or the related person in connection with approval of the related person transaction.

24


AUDIT COMMITTEE REPORT

The following is the report of the Audit Committee with respect to our audited consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K for that period.

Composition and Charter. The Audit Committee (“AC”) of our Board currently consists of four independent directors, as that term is defined in Rule 5605(a)(2) of the NASDAQ Marketplace Rules: Ms. St.Clare, who serves as Chair of the AC, Mr. Sterling, Ms. Sharps Myers and Ms. Sharp. The AC operates under a written charter adopted by our Board and is available on our corporate website (www.aquabounty.com) under “Investor Relations.” The Board and the AC review and assess the adequacy of the charter and the AC performance on an annual basis.

Responsibilities. The AC assists our Board in fulfilling its oversight responsibilities by reviewing the financial information that will be provided to our stockholders and others; reviewing our systems of internal control over financial reporting, disclosure controls and procedures, and our financial reporting process that management has established and the Board oversees; and endeavoring to maintain free and open lines of communication among the AC, our independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”) and management. The AC is also responsible for the review of all critical accounting policies and practices to be used by us; the review and approval or disapproval of all proposed transactions or courses of dealings that are required to be disclosed by Item 404 of Regulation S-K that are not otherwise approved by a comparable committee or the entire Board; and establishing procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. The AC also has the authority to secure independent expert advice to the extent the AC determines it to be appropriate, including retaining independent counsel, accountants, consultants, or others, to assist the AC in fulfilling its duties and responsibilities.

It is not the duty of the AC to plan or conduct audits or to prepare our consolidated financial statements. Management is responsible for preparing our consolidated financial statements and has the primary responsibility for assuring their accuracy and completeness, and Deloitte is responsible for auditing those consolidated financial statements and expressing its opinion as to their presenting fairly in accordance with Generally Accepted Accounting Principles (“GAAP”) our financial condition, results of operations, and cash flows. However, the AC does consult with management and Deloitte prior to the presentation of consolidated financial statements to stockholders and, as appropriate, initiates inquiries into various aspects of our financial affairs. In addition, the AC is responsible for the oversight of Deloitte; considering and approving the appointment of and approving all engagements of, and fee arrangements with Deloitte; and the evaluation of Deloitte’s independence.

In the absence of their possession of information that would give them a reason to believe that such reliance is unwarranted, the members of the AC rely without independent verification on the information provided to them, and on the representations made, by our management and our independent registered public accounting firm. Accordingly, the AC’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal control over financial reporting and disclosure controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The AC’s authority and oversight responsibilities do not independently assure that the audits of our consolidated financial statements are conducted in accordance with auditing standards generally accepted in the United States, or that our consolidated financial statements are presented in accordance with GAAP.

Review with Management and Independent Registered Public Accounting Firm. The AC has reviewed and discussed the quality, not just the acceptability, of our accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements with our management and Deloitte. In addition, the AC has consulted with management and Deloitte prior to the presentation of our consolidated financial statements to stockholders. The AC has discussed with Deloitte the matters required to be communicated by Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission. The AC has received the written communications and the letter from Deloitte required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the AC concerning independence and has discussed with Deloitte its independence from us, including whether its provision of non-audit services has compromised such independence.

Conclusion and Appointment of Independent Registered Public Accounting Firm. Based on the reviews and discussions referred to above in this report, the AC recommended to our Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.

Submitted by the Audit Committee of the Board:

Christine St.Clare (Chair)

Rick Sterling

Gail Sharps Myers

25


Erin Sharp

Notwithstanding anything to the contrary in any of our previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act that might incorporate this proxy statement or future filings made by us under those statutes, the Audit Committee Report and reference to the independence of the AC members are not deemed filed with the SEC and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes.

26


ANNUAL REPORT; AVAILABLE INFORMATION

A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, is available over the Internet on our corporate website (www.aquabounty.com). The Annual Report on Form 10-K is not incorporated into this proxy statement and is not considered proxy solicitation material.

Stockholders may request a paper or email copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, free of charge, by following the instructions in the proxy materials. All reports and documents we file with the SEC are also available, free of charge, on our corporate website (www.aquabounty.com) under “Investor Relations.”

[Ma

BY ORDER OF THE BOARD OF DIRECTORS OF

AQUABOUNTY TECHNOLOGIES, INC.

/s/ Sylvia Wulf

Sylvia Wulf

President,

Sylvia Wulf

Chief Executive Officer and Board Chair

Maynard, Massachusetts

[●], 2023

22


Appendix A

CERTIFICATE OF AMENDMENT

TO THE

THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

AQUABOUNTY TECHNOLOGIES, INC.

AquaBounty Technologies, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:

1. Pursuant to Section 242 of the DGCL, this Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation (this “Certificate of Amendment”) amends the provisions of the Third Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Charter”).

2. This Certificate of Amendment has been approved and duly adopted by the Corporation’s Board of Directors and stockholders in accordance with the provisions of Section 242 of the DGCL.

3. Upon this Certificate of Amendment becoming effective, the Charter is hereby amended as follows:

Subsection 4(a) of the Charter is hereby amended and restated in its entirety to read as follows:

“4. (a) The Corporation is authorized to issue two classes of stock to be designated Common Stock and Preferred Stock. The Corporation is authorized to issue 75,000,000 shares of Common Stock, with a par value of $0.001 per share, and 5,000,000 shares of Preferred Stock, with a par value of $0.01 per share.

Upon the effectiveness of the filing of this Certificate of Amendment (the “2023 Split Effective Time”), every fifteen (15) to twenty (20) shares of Common Stock issued and outstanding or held by the Corporation as treasury shares as of the 2023 Split Effective Time (with the exact number within such range being determined by the Board of Directors prior to the filing of this Certificate of Amendment and set forth in a public announcement issued by the Corporation prior to the date of the 2023 Split Effective Time) shall automatically, and without any further action on the part of the stockholders, be reclassified as one (1) validly issued, fully paid and non-assessable share of Common Stock, without effecting a change to the par value per share of Common Stock (the “2023 Reverse Split”). If, as a result of the 2023 Reverse Split, any stockholder would receive a fraction of a share of Common Stock, the Board of Directors shall cause to be issued to such stockholder an additional fraction of a share of Common Stock that, together with the fraction resulting from the 2023 Reverse Split, would result in such stockholder having a whole share of Common Stock rather than the fraction otherwise resulting from the 2023 Reverse Split. As of the 2023 Split Effective Time, a certificate(s) representing shares of Common Stock prior to the 2023 Reverse Split shall be deemed to represent the number of post-2023 Reverse Split shares into which the pre-2023 Reverse Split shares were reclassified and combined, together with the additional fraction, if any, issued to result in each holder having a whole number of shares, until surrendered to the Corporation for transfer or exchange. The 2023 Reverse Split shall also apply to any outstanding securities or rights convertible into, or exchangeable or exercisable for, Common Stock of the Corporation and all references to such Common Stock in agreements, arrangements, documents and plans relating thereto or any option or right to purchase or acquire shares of Common Stock shall be deemed to be references to the Common Stock or options or rights to purchase or acquire shares of Common Stock, as the case may be, after giving effect to the 2023 Reverse Split.”

4. This Certificate of Amendment shall become effective at 12:01 a.m., Eastern Time, on                    , 2023.

* _ * _ * _ *


IN WITNESS WHEREOF, the undersigned authorized officer of the Corporation has executed this Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation as of                    , 2023.

AQUABOUNTY TECHNOLOGIES, INC.
By:
Name:Sylvia Wulf
Title:Chief Executive Officer




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  A 

Proposals – The Board of Directors recommends a vote FOR Proposals 1 and 2.

  For    Against    Abstain      ForAgainstAbstain    

1. To approve an amendment to our Third Amended and Restated Certificate of Incorporation to approve a reverse stock split of our common stock and an associated reduction in the number of shares of our authorized common stock.

 

2. To approve an adjournment of the Special Meeting, if necessary.

 

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  AquaBounty Technologies, Inc.

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Notice of Special Meeting of Stockholders

Proxy Solicited by Board of Directors for the Special Meeting – October 12, 2023

Sylvia Wulf, David A. Frank, Angela M. Olsen, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers that the undersigned would possess if personally present, at the Special Meeting of Stockholders of AquaBounty Technologies, Inc., which will be held on October 12, 2023, at 8:30 a.m. ET, or at any postponement or adjournment thereof.

Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR items 1 and 2.

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

(Items to be voted appear on reverse side)



  C Non-Voting Items



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