Otaq [AQSE:OTAQ] the marine technology services company operating in the aquaculture and marine energy industries announced this week that it had signed a contract with Bord Iascaigh Mhara, the Republic of Ireland’s Seafood Development Agency, to install two of its Live Plankton Analysis Systems (LPAS) in Irish waters.
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The Bord Iascaigh Mhara will initially rent Otaq’s LPAS units until the end of the year. Otaq’s LPAS is designed to identify phytoplankton (an organic soup of microscopic single-celled plants, protists and bacteria that inhabit the upper sunlit layer of marine and freshwater bodies of water on earth) around marine aquaculture sites that could potentially form toxic Harmful Algal Blooms. These algal blooms can have a negative impact on the health of fish and other marine organisms falling under the bloom. The system allows fishery operators to get early warning of an oncoming algal bloom and take steps to mitigate the potential damage.
AI-powered algal analysis
The backbone of the system is a deep-learning AI technology that Qtaq developed in partnership with Blue Lion Labs that automatically analyses water-samples on a dynamic basis to identify species of phytoplankton that could become a concern. The results are then relayed through Qtaq proprietary software programme to the end-user to alert of a potential threat.
One of the LPAS units will be installed at an aquaculture complex operated by a global food company that had reported previous instances of Harmful Algal Bloom on-site, which led to significant stock losses.
Otaq’s chief commercial officer, Richard Beesley said: “The Aquaculture industry is increasingly challenged by the threat of Harmful Algal Blooms, which can devastate fish populations and lead to significant financial losses for farms worldwide. While daily monitoring has been the traditional response, it presents notable challenges. Since 2021, we have worked closely with farmers, industry bodies and academia to identify and develop a viable solution to address these challenges.”
Otaq took the decision in 2022 to migrate from the London Stock Exchange to the Aquis Growth Market. At the time, a spokesperson for the company said that: “given Otaq’s size and general market liquidity concerns, management decided that the Aquis Growth Exchange was a more appropriate listing for the company and would support the company’s growth plans in a more efficient way.”
As previously reported, the Lancaster-based company, with a market capitalization of GBP4.5m, manufactures marine technology products. One of its main products areas is in aquaculture, where it produces sensory and software products for the salmon farming industry (and other aquaculture systems). These create a robust marine acoustic barrier that deters predator attacks on fish farms from seals and sealions. They are used in Scotland, Chile, Finland and Russia. The company also produces low-optics, underwater cameras and real time plankton/algal bloom monitors for finfish and shellfish production sites, a sonar device to scan shrimp in ponds, and water quality monitoring systems that help aquaculture operators maximize welfare and production yields.
Offshore oil and gas sector
Otaq also manufactures products for the offshore sector – oil and gas and wind farms. That includes subsea leak and cement detection, laser measurement systems, underwater imagery & telemetry solutions, as well as subsea survey solutions, using optics, electronics, video processing, machine vision and artificial intelligence to sense changes in subsea structures. Additionally, Otaq provides seabed survey devices and subsea electrical connectors and penetrators.
In its latest trading update to the end-December 2023, published last month, Otaq’s management said that the company was marginally ahead of expectations, and anticipated that it would accrue revenues of at least GBP4.4m, up 10% year-on-year. Although not yet in profit, Otaq expects that it will shave a bit more off its EBITDA loss, going down from GBP331,000 in 2022 to GBP311,000 in 2023, albeit a higher loss than guided, due to a number of non-recurring items. The company is also making efforts to reduce its net debt, which is down to GBP875,000. As Otaq moved into the new year, it said revenues were up 19% for 1Q24 y-o-y.
Convertible Loan placement
At the same time Otaq announced plans to raise between GBP1.5m and GBP2m through a conditional placement of convertible loan notes, redeemable after three years, paying 10% per annum paid quarterly in cash. The company said it has already taken in expressions of interest in the fundraise for GBP1.5m. The new funds will be used to pay off the company’s existing bank debt, for R&D and to support Otaq’s working capital.
Otaq CEO Phil Newby said that the company is feeling confident, and sees plenty of opportunity in aquaculture in emerging markets, as well as for its subsea electrical connector and penetrator products in the offshore oil and gas sector. He was especially pleased with the launch of LPAS.
The company’s shares opened trading at 3.5p on 11th June. Over one-year the company’s shares are down 36%, over the year-to-date, shares are down 22% with share price ranging from 6p to 0.75p over a 52-week period.
