AQUABOUNTY TECHNOLOGIES INC Debt Disclosure

The current terms and conditions of long-term debt outstanding as of December 31, 2025 and 2024 for continuing operations, are as follows:

Principal payments due on the long-term debt are as follows:

ACOA Atlantic Innovation Fund Grant

In January 2009, the Canadian Subsidiary was awarded an Atlantic Innovation Fund (“AIF”) grant from the Atlantic Canada Opportunities Agency (“ACOA”) to provide a contribution towards the funding of a research and development project. Contributions under the grant were made through 2014 and were to be repaid in the form of a 10% royalty on any products that were commercialized out of this research project until the loan was fully repaid.

On February 14, 2025, ACOA terminated the outstanding loan with the Company’s Canadian Subsidiary and forgave the outstanding balance of C$2.9 million ($2.0 million).

Senior Notes

On October 28, 2025, the Company entered into Note Purchase Agreements with certain investors providing for the issuance and sale of senior notes (“Senior Notes”) in an aggregate principal amount of $4.0 million in a private placement transaction. The Senior Notes have the following characteristics and terms: (i) unsecured, (ii) nonconvertible, (iii) bear interest at 18% per annum, (iv) scheduled maturity date of 18 months from closing, and (v) principal and interest payable at maturity, or earlier if accelerated pursuant to an event of default. The Senior Notes provide for certain restrictive covenants of the Company, as well as events of default including, but not limited to, (a) non-payment, (b) breach of covenants, (c) insolvency, (d) unauthorized changes to board composition, (e) failure to maintain Nasdaq listing compliance, (f) delayed SEC filings, and (g) financial restatements with material adverse effect. The Company anticipates it will receive a notice from Nasdaq in early 2026 regarding the Company’s deficiency in Nasdaq’s minimum book equity compliance, which could result in an event of default if the deficiency is not cured. Among other remedies, the Senior Notes provide the Investors the right to nominate an additional director to the Board upon the occurrence of an event of default, subject to certain conditions. The Agreements required certain resignations from and appointments to the Board at the time of the transaction closing date and upon the occurrence of certain events and criteria.

The net proceeds from the issuance of the Senior Notes are to be used for general corporate purposes, including working capital and operational funding, as well as the repayment of certain debts.

Term Note

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

Vendor Note