MeaTech Ltd. Reports First Half 2021 Financial Results


NESS ZIONA, Israel, Aug. 16, 2021 — MeaTech Ltd. (Nasdaq: MITC) (“MeaTech”), a technology company developing a suite of advanced manufacturing technologies to produce cultured meat products, today announced its financial results for the half-year ended June 30, 2021, and provided an update on recent business developments.

First Half 2021 Summary and Recent Developments

  • Completed acquisition of Belgian foodtech innovator, Peace of Meat, to lead MeaTech’s avian cell culture technologies
  • Established MeaTech Europe to advance food technology development activities, with initial focus on cultured fat production for hybrid foods
  • Announced plans to establish and operate a pilot plant to commence pre-commercial cultured chicken fat production in 2022
  • Filed provisional patent application for novel bioprinting method
  • Initiated pork cell research and development activities for establishing scaled production capabilities of cultured pork-based products
  • Signed a letter of intent with Tiv Ta’am Holdings to develop, produce, and distribute cultured meat products
  • Completed H1 2021 with a cash position of over $30 million

Management Comment

Sharon Fima, MeaTech’s Chief Executive Officer, commented, “We are thrilled with our progress so far in 2021 and are excited to continue developing our capabilities. During the first half of 2021, we expanded our bovine and avian cell product lines, and initiated research and development activities for cultured porcine cell technologies. Establishing MeaTech Europe, which is initially focusing on hybrid foods, lays the company groundwork for further development of cultured meats. We look forward to establishing a pilot plant in Belgium during 2022 to commence pre-commercial cultured chicken fat production.”

“Our goal is to lead the upcoming agricultural revolution by making tomorrow’s meat safe, abundant and sustainable. MeaTech is developing a broad range of cultured meat technologies as a potential alternative to conventionally factory farmed beef, chicken, and now, pork. We intend to continue leveraging our 3D bioprinting technologies, which we believe to be the optimal technology to create structured meat tissues, such as steaks, under lab conditions. We believe developing additional cultured meat product lines has the potential to expand our addressable markets, generating additional revenue potential. Our goal is delivering meat experiences comparable to livestock-farmed meat, while using a significantly more sustainable production method.”

Unaudited Financial Results Summary

  • R&D expenses totaled $2.1 million in the first half of 2021, compared to $0.9 million in the same period in 2020. This reflects MeaTech’s increased investment in research and development to expand its cultured meat technology capabilities.
  • Operating loss reached $6.7 million in the first half of 2021, compared to $13.0 million in the same period in 2020, which also included $10.1 million in public listing expenses that did not affect cash flow, in connection with MeaTech’s reverse merger into a TASE-listed shell company in 2020. The operating loss increased mainly due to increased R&D expenses, up from $0.9 million in the first half of 2020 to $2.1 million, as well as an increase in general and administrative expenses from $2.0 million to $4.0 million, primarily due to an increase in share-based payment and insurance expenses.
  • Non-cash flow share-based payment totaled $2.3 million in the first half of 2021, compared to $1.6 million in the same period in 2020.
  • Total comprehensive loss was $7.7 million in the first half of 2021, or $0.06 per ordinary share, compared to $13.2 million, or $0.26 per ordinary share, in the same period in 2020.
  • Cash flow used in operating activities was $5.0 million in the first half of 2021, compared to $1.5 million in the same period in 2020.
  • Cash and equivalents at June 30, 2021 increased to $30.6 million, up from $13.6 million at year-end 2020, driven mainly by the Nasdaq IPO in March 2021.
  • Non-current assets increased to $14.1 million at June 30, 2021, up from $3.6 million at year-end 2020, driven mainly by the initial consolidation of the financial results of wholly-owned subsidiary Peace Of Meat.
  • Total assets increased to $46.0 million at June 30, 2021, up from $17.5 million at year-end 2020.
  • Total capital reached $43.8 million at June 30, 2021, up from $15.6 million at year-end 2020.

Business Highlights and Recent Developments

LOI with Tiv Ta’am Holdings Group to Develop and Distribute Cultured Meat Products

In July 2021, MeaTech signed a non-binding letter of intent with Tiv Ta’am, a leading food retailer and meat producer in Israel, to cooperate in the joint development of cultured meat products. MeaTech anticipates that the goals of the partnership will initially be research cooperation for the development of cultured meat production facilities and subsequently, if those efforts are successful, shared responsibilities for future production, marketing and distribution activities. MeaTech believes this move reflects the established meat producers’ confidence in MeaTech’s vision, potential future technology and product development capabilities and the expected synergies between the cultivated meat industry and existing industrial food production.

Cultured Pork Development

In July 2021, MeaTech initiated research and development activities focusing on cell lines and technologies for the potential future mass production of cultured pork. This expansion is part of the strategy to develop a broad cellular agriculture technology offering, complementing existing research and development activities for beef and chicken cell lines. As pork is currently the most consumed meat across the globe, porcine cellular agriculture, if successfully developed, has the potential to significantly expand MeaTech’s addressable markets.

US Patent Filing

In June 2021, MeaTech filed a provisional patent application with the United States Patent Office for a novel bioprinting method with the potential to provide exceptional control of bio-ink printing during multi-layered bioprinting processes. MeaTech believes this could improve bioprinting resolutions in premium, meat-emulating products.

Initiation of Food Technology Development Activities in Europe

In April 2021, MeaTech commenced food technology development activities through its European subsidiary, MeaTech Europe, with an initial focus on hybrid foods using MeaTech’s cultured fat. Hybrid foods are food offerings composed of both plant and cultured meat ingredients, which have the potential to offer a meatier product to consumers as compared to purely plant-based meat alternatives.

Cultured Chicken Fat Pilot Plant

In May 2021, MeaTech announced its intention to establish a pilot plant in Belgium in 2022 to commence pre-commercial cultured chicken fat production. The cultured fat production process is expected to be designed to deploy technologies developed by Peace of Meat with the goal of producing cultured chicken fat for use in potential industry collaborations. By leveraging its cultured chicken fat technologies, MeaTech aims to expedite its market entry while it develops, in tandem, an industrial process for cultivating and producing real meat cuts, such as steak or chicken breast, using 3D bioprinting technology.

$28 Million Nasdaq Listing and Voluntary Delisting from the Tel Aviv Stock Exchange

In March 2021, MeaTech raised $28 million in an initial public offering of American Depository Shares (ADSs), each representing ten ordinary shares, on the Nasdaq Capital Market, making MeaTech the first cultured meat company to be publicly traded in the USA.

In August 2021, MeaTech completed the process to voluntarily delist its ordinary shares from the Tel Aviv Stock Exchange (TASE), with its ADSs continuing to trade on the Nasdaq Capital Market. The decision to delist from the TASE was taken as MeaTech’s board of directors and management focus MeaTech’s investor and public relations efforts globally.

Acquisition of Peace of Meat

In February 2021, MeaTech finalized its acquisition of Peace of Meat BV, a Belgian producer of cultured avian products, for up to $17.7 million in cash and equity, depending on milestone achievement. MeaTech intends to leverage Peace of Meat’s cultured avian technologies to diversify its own bovine-oriented technologies and expedite its entry into the market for cultured products.

The Peace of Meat acquisition broadened the MeaTech portfolio by adding chicken fat and other cultured avian products to the MeaTech family of potential offerings. The cultured avian meat products, and the technologies used to make them, are expected to initially be marketed to food processing companies looking to add more meatiness to their plant-based offerings. Under the terms of the acquisition agreement, Peace of Meat’s management continues to lead the development process at its headquarters in Belgium.

Conference call

MeaTech will host a conference call today at 9:00 am ET. Management will host the call and will be available to answer questions after providing a business update and presenting the results. To participate, please call one of the following telephone numbers a few minutes before the start of the call:

US: 1-866-860-9642 at 9:00 am Eastern Time  
Israel: 03-918-0609 at 4:00 pm Israel Time  
International: +972-3-918-0609    

A live webcast of the conference call can also be accessed on the MeaTech website at: https://meatech3d.com/events-presentations/

Unaudited Condensed Consolidated Interim Information on the Financial Position
 
 
    As of June 30     As of June 30     As of
December 31
 
    2021     2020     2020  
    USD
thousands
    USD
thousands
    USD
thousands
 
Current assets                  
                   
Cash and cash equivalents     30,637       5,201       13,556  
Other investment     147       134       149  
Receivables     1,174       73       131  
Total current assets     31,958       5,408       13,836  
                         
Non-current assets                        
                         
Restricted deposits     388       72       51  
Other investment     1,264       1,164       2,513  
Right-of-use asset     306       143       168  
Intangible assets     9,930              
Fixed assets, net     2,206       277       906  
                         
Total non-current assets     14,094       1,656       3,638  
                         
Total Assets     46,052       7,064       17,474  
                         
Current liabilities                        
                         
Trade payables     359       61       351  
Other payables     1,573       398       996  
Current maturities of lease liabilities     210       109       180  
Derivative instrument           3       316  
                         
Total current liabilities     2,142       571       1,843  
                         
Non-current liabilities                        
                         
Long-term lease liabilities     102       37        
                         
Total non-current liabilities     102       37        
                         
Capital                        
                         
Share capital and premium on shares     65,283       18,497       30,481  
Capital reserves     4,383       1,275       3,319  
Currency translation differences reserve     (91)       73       780  
Accumulated deficit     (25,767)       (13,389)       (18,949)  
                         
Total capital     43,808       6,456       15,631  
Total liabilities and capital     46,052       7,064       17,474  
Unaudited Condensed Consolidated Interim Information on Comprehensive Income
 
 
    6-month
period endedJune 30,
    6-month
period endedJune 30,
    Year endedDecember 31,  
    2021     2020     2020  
    USD
thousands,
except share
data
    USD
thousands,
except
share data
    USD
thousands,
except
share data
 
                   
 Research and development expenses     2,146       850       2,491  
 Marketing expenses     600             506  
 General and administrative expenses     3,983       2,006       5,380  
 Public listing expenses           10,164       10,164  
 Operating loss     6,729       13,020       18,541  
                         
Financing expenses (income), net     89       (56)       (17)  
                         
 Loss for the period     6,818       12,964       18,524  
                         
Capital reserve for financial assets at fair value that will not be 
     transferred to profit or loss
          334       334  
Currency translation differences loss (income) that will not be 
     transferred to profit or loss
    871       (51)       (758)  
                         
Total comprehensive loss for the period     7,689       13,247       18,100  
                         
 Loss per ordinary share, no par value (USD)                        
                         
 Basic and diluted loss per share (USD)     0.064       0.262       0.308  
                         
 Weighted-average number of shares outstanding – basic and diluted 
     (shares)
    107,189,837       49,476,813       60,112,197  
Unaudited Condensed Consolidated Interim Information on Changes in Equity (Deficit)
 
 
    Share and capital premium     Fair value offinancial assetsreserve     Transactionswith relatedparties reserve     Currencytranslationdifferencesreserve     Share-basedpaymentsreserve     Accumulated deficit     Total  
    USD thousands  
                                           
                                           
Balance as at January 1, 2021     30,481       (334)       14       780       3,639       (18,949)       15,631  
                                                         
Share-based payments                             2,313             2,313  
Issuance of shares and warrants, net     30,357                                     30,357  
Exercise of options – Share-Based Payment     4,445                               (1,249)               3,196  
Other comprehensive income )loss)                       (871)                   (871)  
Loss for the period                                   (6,818)       (6,818)  
                                                         
Balance as at June 30, 2021     65,283       (334)       14       (91)       4,703       (25,767)       43,808  
                                                         
Balance as at January 1, 2020     1,880             14       22             (425)       1,491  
                                                         
Reverse acquisition     11,439                                     11,439  
Issuance of shares and warrants, net     3,059                                     3,059  
Share-Based Payment                             1,595             1,595  
Exercise of options     2,119                                               2,119  
Other comprehensive income (loss)             (334)             51                   (283)  
Loss for the period                                   (12,964)       (12,964)  
                                                         
Balance as at June 30, 2020     18,497       (334)       14       73       1,595       (13,389)       6,456  
                                                         
Balance as at January 1, 2020     1,880             14       22             (425)       1,491  
                                                         
Share-based payments                             3,958             3,958  
Reverse acquisition     11,439                                     11,439  
Issuance of shares and warrants, net     14,067                                     14,067  
Exercise of options – Investors     2,753                                     2,753  
Exercise of options – Share-Based Payment     342                               (319)               23  
Other comprehensive income )loss)           (334)             758                   424  
Loss for the period                                   (18,524)       (18,524)  
                                                         
Balance as at December 31, 2020     30,481       (334)       14       780       3,639       (18,949)       15,631  
Unaudited Condensed Consolidated Interim Information on Cash Flows
 
 
    Six months
ended June 30,2021
    Six months
ended June 30,
2020
    Year endedDecember 31,2020  
    USD thousands     USD thousands     USD thousands  
Cash flows – operating activities                  
Net Loss for the period     (6,818)       (12,964)       (18,524)  
                         
Adjustments:                        
Depreciation and amortization     278       73       213  
Change in fair value of derivative     (311)       (73)       (36)  
Change in fair value of other investment     (90)             (74)  
Expenses for share-based payments     2,313       1,592       3,958  
Expenses for public listing           10,164       10,164  
Changes in asset and liability items:                        
Decrease (increase) in receivables     (782)       (34)       5  
Increase (decrease) in trade payables     3       (7)       126  
Increase (decrease) in other payables     454       (232)       336  
Net cash from (used in) operating activities     (4,953)       (1,481)       (3,832)  
                         
Cash flows – investment activities                        
Acquisition of fixed assets     (902)       (168)       (681)  
Decrease (increase) of restricted deposit     (337)       (30)       (6)  
Acquisition of subsidiary, net of cash acquired     (4,848)             (1,188)  
                         
Net cash used in investing activities     (6,087)       (198)       (1,875)  
                         
Cash flows – financing activities                        
Proceeds from issuance of shares and warrants     27,143       3,300       14,887  
Issuance costs     (1,145)       (242)       (819)  
Repayment of liability for lease     (134)       (55)       (140)  
Proceeds on account of other investment     73       12       71  
Proceeds on account of capital issuance           338       222  
Proceeds with regard to derivative           74       348  
Proceeds from exercise of share options     3,196       2,118       2,776  
                         
Net cash from financing activities     29,133       5,545       17,345  
                         
Increase in cash and cash equivalents     18,093       3,866       11,638  
Effect of exchange differences on cash and cash equivalents     (1,012)       61       644  
Cash and cash equivalents at the beginning of the period:     13,556       1,274       1,274  
                         
Cash balance and cash equivalents at end of period     30,637       5,201       13,556  
                         
Non cash activities                        
Purchase of fixed assets     21             143  
Issue of shares and options against intangible asset     4,359              
Peace Of Meat BV Initial consolidation effect on Consolidated Balance Sheet
The following summarizes the consideration transferred, and the recognized
amounts of assets acquired and liabilities assumed at the acquisition date:
Peace Of Meat condensed Balance Sheet as at March 1, 2021   (USD thousands)  
Current assets     425  
Non-current assets     589  
Current liabilities     (578)  
Non-current liabilities     (16)  
Tangible assets net     419  
Peace Of Meat initial consolidation effect   (USD thousands)  
Closing cash consideration     5,053  
Closing shares consideration     4,359  
Previous investment     1,223  
Tangible assets, net     (419)  
Net addition to balance sheet as of consolidation date     10,216  
FX change     (286)  
June 30, 2021 balance     9,930  

About MeaTech

MeaTech commenced cultured meat operations in 2019 with the aim of developing proprietary three-dimensional bioprinting technologies, biotechnology processes, and cell-based manufacturing processes for food processors and food retail companies seeking to manufacture proteins more sustainably and without the need for animal slaughter. MeaTech is developing a novel, proprietary three-dimensional bioprinter to deposit layers of differentiated stem cells, scaffolding, and cell nutrients in a three-dimensions to produce structured cultured meat. The Company’s ADSs are listed on the Nasdaq Capital Market under the ticker symbol “MITC.”

For more information, please visit https://www.meatech3d.com/.

Forward-Looking Statements

This press release contains forward-looking statements concerning MeaTech’s business, operations and financial performance and condition as well as plans, objectives and expectations for MeaTech’s business operations and financial performance and condition. Any statements that are not historical facts may be deemed to be forward-looking statements. Forward-looking statements reflect MeaTech’s current views with respect to future events and are based on assumptions and subject to known and unknown risks and uncertainties, which change over time, and other factors that may cause MeaTech’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan” or words or phases of similar meaning and include, without limitation, MeaTech’s expectations regarding the success of its cultured meat manufacturing technologies it is developing, which will require significant additional work before MeaTech can potentially launch commercial sales; MeaTech’s research and development activities associated with technologies for cultured meat manufacturing, including three-dimensional meat production, which involves a lengthy and complex process; MeaTech’s ability to obtain and enforce its intellectual property rights and to operate its business without infringing, misappropriating, or otherwise violating the intellectual property rights and proprietary technology of third parties; and other risks and uncertainties, including those identified in MeaTech’s Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission on April 21, 2021. New risks and uncertainties may emerge from time to time, and it is not possible for MeaTech to predict their occurrence or how they will affect MeaTech. If one or more of the factors affecting MeaTech’s forward-looking information and statements proves incorrect, then MeaTech’s actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, MeaTech cautions you not to place undue reliance on its forward-looking information and statements. MeaTech disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

SOURCE MeaTech Ltd.