Business Context and Reporting Period
This Form 6-K, filed November 24, 2021, reports MeaTech 3D Ltd.’s unaudited consolidated interim results for the nine months ended September 30, 2021. The company develops cultured-meat production technologies, including cultivated fat production and 3D bioprinting. The filing identifies the registrant as MeaTech 3D Ltd.; the request metadata refers to Steakholder Foods Ltd.
Financial Results and Position
| Metric | Nine months ended September 30, 2021 | Comparable 2020 period |
|---|---|---|
| Revenue | The filing does not report revenue. | The filing does not report revenue. |
| Research and development expense | $4.9 million | $1.7 million |
| Marketing expense | $0.9 million | $0.3 million |
| General and administrative expense | $6.0 million | $3.9 million |
| Operating loss | $11.8 million | $16.0 million |
| Loss for the period | $11.7 million | $16.0 million |
| Total comprehensive loss | $12.0 million | $16.4 million |
| Basic and diluted loss per ordinary share | $0.104, or $1.04 per ADS | $0.289, or $2.89 per ADS |
| Cash flow used in operating activities | $9.6 million | $2.7 million |
| Cash flow used in investing activities | $7.5 million | $0.3 million |
| Cash flow from financing activities | $29.1 million | $10.1 million |
Cash and cash equivalents were $25.4 million at September 30, 2021, compared with $13.6 million at December 31, 2020. Current assets were $27.5 million and total assets were $43.3 million. Current liabilities were $2.4 million and total liabilities were approximately $2.5 million. The filing reports lease liabilities but no material conventional debt balance.
Total capital was $40.8 million, including an accumulated deficit of $30.7 million. The company completed a Nasdaq IPO in March 2021, raising $28.0 million gross and $24.7 million net. Weighted-average shares outstanding increased to approximately 112.9 million from 55.3 million in the comparable period.
Material Changes Versus the Prior Comparable Period
- Research and development expense increased 188% to $4.9 million, primarily due to the addition of the Belgian plant and expanded technology development.
- General and administrative expense increased 54% to $6.0 million, driven by higher insurance, legal and corporate costs following the Nasdaq listing. Non-cash share-based compensation decreased to $2.1 million from $2.5 million.
- Marketing expense increased 171% to $0.9 million.
- The reported operating loss declined because the 2020 period included a $10.2 million non-cash public-listing expense. Excluding that item, the 2020 operating loss was $5.9 million, indicating a $5.9 million increase in the comparable underlying operating loss in 2021.
- Operating cash use increased to $9.6 million, while investing cash use increased to $7.5 million, principally reflecting the Belgian acquisition and fixed-asset investments.
- Non-current assets increased to $15.8 million from $3.6 million, primarily because of the acquisition of Peace of Meat BV. Total assets increased to $43.3 million from $17.5 million.
Guidance, Outlook, Risks, and Unusual Items
- Management stated that a pilot plant for cultivated-fat production was on track and planned for 2022; no quantitative revenue, earnings, margin, or cash-burn guidance was provided.
- The company reported producing just over 700 grams of pure chicken-fat biomass in one production run and described this as a step toward industrial-scale production and potential cost parity.
- MeaTech partnered with BlueSoundWaves, led by Ashton Kutcher and Guy Oseary, to support strategy, marketing, go-to-market activities, and commercialization efforts. The subsequent arrangement included warrants for up to 621,577 ADSs and RSUs representing 124,315 ADSs, subject to vesting and milestones.
- The company completed the acquisition of Peace of Meat for consideration of up to approximately $19.9 million, including contingent cash and equity tied to technological milestones. As of approval of the statements, the first milestone had been fully achieved and the second partially achieved.
- A provisional U.S. patent application was filed covering methods for differentiating stem cells into fat cells using plant-sourced inputs.
- An Israeli Securities Authority administrative matter was agreed to be settled for approximately $0.2 million, subject to Enforcement Committee approval. A related $0.8 million civil claim against the settlement fund was assessed by the company as having a low probability of an adverse final ruling.
- The company remains pre-commercial and expects significant additional research and development before potential commercial sales. Key risks include technology and scale-up execution, regulatory approval, intellectual-property protection, commercialization, financing needs, milestone obligations, foreign-exchange exposure, and COVID-19-related uncertainty.
Facts Investors Should Verify
- Whether and when the planned 2022 cultivated-fat pilot plant becomes operational, including achieved production scale, yield, cost, and regulatory status.
- The company’s ability to generate commercial revenue, since this filing provides no revenue and no profitability guidance.
- Cash runway relative to the reported $9.6 million nine-month operating cash burn and the company’s continuing investment requirements.
- The timing and amount of contingent consideration payable under the Peace of Meat acquisition milestones.
- The dilutive effect of outstanding options, RSUs, warrants, and the BlueSoundWaves compensation arrangement.
- Resolution of the Israeli Securities Authority settlement and related civil claim.