MeaTech Reports Financial Results for Q1 2022 and Provides Business Update
MeaTech 3D Ltd. (MITC) reported its Q1 2022 financial results, showing R&D expenses of $2.1 million, a 90% increase from $1.1 million in Q1 2021, primarily due to its Belgian subsidiary's development. Operating loss rose to $5.3 million, a 26% increase year-over-year. Cash and equivalents fell by 20% to $15.3 million. Despite these losses, the company is making strides in cultured meat technology, including a successful muscle cell differentiation process and a new US office. It also unveiled a multi-nozzle 3D bioprinting system aimed at commercialization.
- Successful muscle stem cell differentiation technology development.
- Plans to expand R&D and marketing efforts with a new US office.
- Development of a multi-nozzle 3D bioprinting system for cultured meat.
- Operating loss increased to $5.3 million, up 26% YoY.
- Cash and cash equivalents decreased by 20% to $15.3 million.
- Total comprehensive loss rose to $5.7 million compared to $4.4 million in Q1 2021.
The company continued to develop the technology, R&D and marketing infrastructure necessary to accelerate toward commercialization of cultured meat
REHOVOT, Israel, May 31, 2022 /PRNewswire/ -- MeaTech 3D Ltd. (Nasdaq: MITC) ("MeaTech") today reported its financial results for Q1 2022 and provided a business update. MeaTech is an international group of deep-tech food companies at the forefront of the cultured meat industry. MeaTech Group uses science and technology to develop high-quality real meat products made from cells rather than farm-raised animals that are delicious, nutritious and safer than conventional meat.
Q1 2022 Financial Results Summary
- Research and development expenses totaled
$2.1 million in the three months ending March 31, 2022, compared to$1.1 million in the same period in 2021. The90% increase is mainly due to the addition of the company's Belgian subsidiary and reflects MeaTech Group's growing investment in research and development as it achieves its milestones and expands its cultured meat technology capabilities.
- General and administrative expenses totaled
$2.1 million in the three months ending March 31, 2022, compared to$2.7 million in the same period in 2021. The23% decrease is driven by lower share-based payment expenses, partially offset by higher D&O insurance expenses in the three months ending March 31, 2022.
- Marketing expenses totaled
$1.1 million in the three months ending March 31, 2022, compared to$0.3 million in the same period in 2021. The228% increase is mainly the result of share-based payment expenses of$0.5 million , and the company's growing investment in marketing activities.
- Operating loss totaled
$5.3 million in the three months ending March 31, 2022, compared to$4.2 million in the same period in 2021. The26% increase in the operating loss reflects the growing investment of MeaTech Group in research and development as well as marketing activities.
- Total comprehensive loss totaled
$5.7 million in the three months ending March 31, 2022, or 40 cents per ordinary share ($4.00 per ADS), compared to$4.4 million , or 40 cents per ordinary share ($4.00 per ADS), in the same period in 2021.
- Cash flow used in operating activities totaled
$2.8 million in the three months ending March 31, 2022, compared to$1.2 million in the same period in 2021, reflecting a137% increase, driven mainly by increased research and development expenditures of MeaTech Group.
- Cash flow used in investment activities totaled
$1.0 million in the three months ending March 31, 2022, compared to$5.4 million in the same period in 2021, reflecting an81% decrease. This resulted mainly from the$4.8 million cash component paid in the acquisition of Peace of Meat in Q1 2021.
- Cash flow from financing activities was
$0.0 million in the three months ending March 31, 2022, compared to$28.2 million in the same period in 2021, during which the company completed its Nasdaq initial public offering.
- Cash and cash equivalents were
$15.3 million on March 31, 2022, compared to$19.2 million at year-end 2021, a decrease of20% . The decrease was mainly due to the company's ongoing operations.
- Current assets decreased by
23% to$16.9 million on March 31, 2022 from$22.1 million at year-end 2021, as a result of ongoing operations.
- Non-current assets increased by
25% to$23.2 million on March 31, 2022 from$18.5 million at year-end 2021, due mainly to a$4.1 million long-term lease asset of its new premises, offset by the recognition of a lease liability in the same amount in accordance with IFRS requirements.
- Total capital decreased
13% to$32.6 million on March 31, 2022, down from$37.6 million at year-end 2021. The decrease was mainly the result of ongoing operations.
Arik Kaufman, MeaTech's Chief Executive Officer: "In just the first quarter of 2022, we have shown our rapid pace of progress toward commercialization. Our recent technological and scientific advancements and business activities have put us firmly on a path toward scaling our unique solution for the sustainable production of a wide variety of cultured meat products."
Business highlights and developments during Q1 2022
- Promising results with muscle stem cell differentiation: In February, MeaTech announced the successful development of a novel technology process in which muscle cells are fused into significant muscle fibers that better resemble those in whole cuts of meat. Bovine stem cells were isolated, proliferated in the lab, and differentiated into matured muscle cells with improved muscle fiber density, thickness and length. Based on these improvements, MeaTech has filed a provisional patent application with the USPTO.
- New headquarters to widen R&D activity: In March, the company moved to new, more spacious headquarters with state-of-the-art laboratories in Rehovot, Israel, the epicenter of the country's food-tech sector. The new space allows the company to enhance its cultured meat R&D and 3D bioprinting technology and continue growing the biology and engineering teams with a more expansive lab facility. The new headquarters also features a tasting kitchen.
- Expansion of cultivated meat operation into the US to accelerate go-to-market strategy: In March 2022, MeaTech announced that it will be opening a US office. The new space will include activities in research and development, investor relations, and business development. MeaTech US will be another indication of the company's rapid growth and scaling efforts.
- Peace of Meat pilot plant and R&D facility in Belgium: In March, MeaTech announced that its wholly owned Belgian subsidiary, Peace of Meat, will build an R&D facility and pilot plant in Belgium, with construction expected to commence in 2022. The new facility will expand and accelerate the MeaTech Group's cultured avian technology and R&D capabilities and help propel the company's market entry.
- First-of-its-kind tasting event with Israeli anchor investors: In March, MeaTech hosted a tasting event at the company's headquarters with its Israeli anchor investors, including prominent food industry investors. Guests toured the labs and R&D facilities, observed the company's 3D printing capabilities, and tasted hybrid chicken nuggets made with plant protein combined with cultured chicken developed by Peace of Meat.
- Breakthrough in 3D bioprinting capabilities: In May, MeaTech announced the development of a unique, multi-nozzle 3D bioprinting system for industrial scale production of complex cultured meat products without impacting cell viability. The company plans to offer the technology to third parties via a wholly owned private MeaTech subsidiary as an additional revenue stream and to accelerate commercialization.
- Strategic agreement between Peace of Meat and ENOUGH: In May, Peace of Meat signed a strategic agreement with ENOUGH, a leader in the field of mycoprotein, a fungi-based fermented food ingredient, to accelerate commercialization. This innovative initiative is expected to create game-changing hybrid alternative meat products that better resemble the flavor, aroma, texture, and even nutritional value of conventional meat.
- MeaTech joins the United Nations Global Compact: In May, the company joined the UN Global Compact initiative, committing to ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption and to act in support of UN goals and issues embodied in the UN's Sustainable Development Goals (SDGs).
Unaudited Condensed Consolidated Interim Information on the Financial Position | |||||||||||||
As of | As of | As of | |||||||||||
2022 | 2021 | 2021 | |||||||||||
USD | USD | USD | |||||||||||
Current assets | |||||||||||||
Cash and cash equivalents | 15,257 | 35,971 | 19,176 | ||||||||||
Other investment | 151 | 144 | 154 | ||||||||||
Receivables and prepaid expenses | 1,513 | 391 | 2,782 | ||||||||||
Total current assets | 16,921 | 36,506 | 22,112 | ||||||||||
Non-current assets | |||||||||||||
Restricted deposits | 415 | 50 | 405 | ||||||||||
Other investment | 1,333 | 1,259 | 1,355 | ||||||||||
Right-of-use asset | 4,050 | 294 | 407 | ||||||||||
Intangible assets | 13,196 | 9,805 | 13,453 | ||||||||||
Fixed assets, net | 4,183 | 1,797 | 2,922 | ||||||||||
Total non-current assets | 23,177 | 13,205 | 18,542 | ||||||||||
Total Assets | 40,098 | 49,711 | 40,654 | ||||||||||
Current liabilities | |||||||||||||
Trade payables | 746 | 1,357 | 382 | ||||||||||
Other payables | 2,628 | 1,419 | 2,239 | ||||||||||
Current maturities of lease liabilities | 488 | 207 | 165 | ||||||||||
Total current liabilities | 3,862 | 2,983 | 2,786 | ||||||||||
Non-current liabilities | |||||||||||||
Long-term lease liabilities | 3,595 | 96 | 246 | ||||||||||
Total non-current liabilities | 3,595 | 96 | 246 | ||||||||||
Equity | |||||||||||||
Share capital and premium on shares | 70,059 | 67,243 | 69,610 | ||||||||||
Capital reserves | 4,026 | 2,004 | 3,708 | ||||||||||
Currency translation differences reserve | 515 | (8) | 1,275 | ||||||||||
Accumulated deficit | (41,959) | (22,607) | (36,971) | ||||||||||
Total Equity | 32,641 | 46,632 | 37,622 | ||||||||||
Total liabilities and Equity | 40,098 | 49,711 | 40,654 | ||||||||||
Unaudited Condensed Consolidated Interim Information on Comprehensive Income | ||||||||||||
3-month period ended March 31, | 3-month period ended March 31, | Year ended December 31, | ||||||||||
2022 | 2021 | 2021 | ||||||||||
USD thousands, except share data | USD thousands, except share data | USD thousands, except share data | ||||||||||
Research and development expenses | 2,142 | 1,126 | 7,594 | |||||||||
Marketing expenses | 1,051 | 320 | 1,628 | |||||||||
General and administrative expenses | 2,118 | 2,760 | 8,010 | |||||||||
Operating loss | 5,311 | 4,206 | 17,232 | |||||||||
Financing expenses (income), net | (323) | (548) | 790 | |||||||||
Loss for the period | 4,988 | 3,658 | 18,022 | |||||||||
Currency translation differences loss (income) that might be | 515 | 551 | (1,942) | |||||||||
Currency translation differences loss that might be transferred to | 245 | 237 | 1,447 | |||||||||
Total comprehensive loss for the period | 5,748 | 4,446 | 17,527 | |||||||||
Loss per ordinary share, no par value (USD) | ||||||||||||
Basic and diluted loss per share (USD) | 0.040 | 0.040 | 0.155 | |||||||||
Weighted-average number of shares outstanding - basic and | 126,235,376 | 90,346,518 | 115,954,501 | |||||||||
Unaudited Condensed Consolidated Interim Information on Changes in Equity (Deficit) | ||||||||||||||||||||||||||||
Share and capital | Fair value | Transactions | Currency | Share-based | Accumulated | Total | ||||||||||||||||||||||
USD thousands | ||||||||||||||||||||||||||||
Balance as of January 1, 2022 | 69,610 | (334) | 14 | 1,275 | 4,028 | (36,971) | 37,622 | |||||||||||||||||||||
Share-based payments | - | - | - | - | 714 | - | 714 | |||||||||||||||||||||
Exercise of options | 449 | (396) | 53 | |||||||||||||||||||||||||
Other comprehensive (loss) | - | - | - | (760) | - | - | (760) | |||||||||||||||||||||
Loss for the period | - | - | - | - | - | (4,988) | (4,988) | |||||||||||||||||||||
Balance as of March 31, 2022 | 70,059 | (334) | 14 | 515 | 4,346 | (41,959) | 32,641 | |||||||||||||||||||||
Balance as of January 1, 2021 | 30,481 | (334) | 14 | 780 | 3,639 | (18,949) | 15,631 | |||||||||||||||||||||
Share-Based Payment | - | - | - | - | 1,879 | - | 1,879 | |||||||||||||||||||||
Issuance of shares and warrants, net | 30,357 | - | - | - | - | - | 30,357 | |||||||||||||||||||||
Exercise of options | 6,405 | (3,194) | 3,211 | |||||||||||||||||||||||||
Other comprehensive (loss) | - | - | (788) | - | - | (788) | ||||||||||||||||||||||
Loss for the period | - | - | - | - | - | (3,658) | (3,658) | |||||||||||||||||||||
Balance as of March 31, 2021 | 67,243 | (334) | 14 | (8) | 2,324 | (22,607) | 46,632 | |||||||||||||||||||||
Balance as of January 1, 2021 | 30,481 | (334) | 14 | 780 | (3,639) | (18,949) | 15,631 | |||||||||||||||||||||
Share-based payments | - | - | - | - | 3,965 | - | 3,965 | |||||||||||||||||||||
Issuance of shares and warrants, net | 32,330 | 32,330 | ||||||||||||||||||||||||||
Exercise of options | 6,799 | - | - | - | (3,576) | - | 3,223 | |||||||||||||||||||||
Other comprehensive income | - | - | - | 495 | - | - | 495 | |||||||||||||||||||||
Loss for the period | - | - | - | - | - | (18,022) | (18,022) | |||||||||||||||||||||
Balance as of December 31, 2021 | 69,610 | (334) | 14 | 1,275 | 4,028 | (36,971) | 37,622 | |||||||||||||||||||||
Unaudited Condensed Consolidated Interim Information on Cash Flows | ||||||||||||
Three months | Three months | Year ended | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Cash flows – operating activities | ||||||||||||
Net Loss for the period | (4,988) | (3,658) | (18,022) | |||||||||
Adjustments: | ||||||||||||
Depreciation and amortization | 382 | 109 | 680 | |||||||||
Change in fair value of derivative | - | (304) | (316) | |||||||||
Change in fair value of other investment | (44) | (74) | (193) | |||||||||
Changes in net foreign exchange expenses | (340) | (174) | 1,279 | |||||||||
Share-based payment expenses | 714 | 1,879 | 3,965 | |||||||||
Changes in asset and liability items: | ||||||||||||
Decrease (increase) in receivables and prepaid expenses | 1,203 | (50) | (2,351) | |||||||||
Increase (decrease) in trade payables | (382) | 736 | (97) | |||||||||
Increase in other payables | 615 | 336 | 1,095 | |||||||||
Net cash (used in) operating activities | (2,840) | (1,200) | (13,960) | |||||||||
Cash flows – investment activities | ||||||||||||
Acquisition of fixed assets | (800) | (219) | (1,828) | |||||||||
Increase of restricted deposit | (19) | - | (337) | |||||||||
Loan provided | - | (367) | (367) | |||||||||
Acquisition of subsidiary, net of cash acquired | (188) | (4,848) | (6,808) | |||||||||
Net cash used in investing activities | (1,007) | (5,434) | (9,340) | |||||||||
Cash flows – financing activities | ||||||||||||
Proceeds from issuance of shares and warrants | - | 29,281 | 29,281 | |||||||||
Issuance costs | - | (3,283) | (3,283) | |||||||||
Repayment of liability for lease | (118) | (58) | (346) | |||||||||
Proceeds on account of other investment | 38 | 37 | 149 | |||||||||
Proceeds from exercise of share options | 53 | 3,211 | 3,222 | |||||||||
Net cash provided by (used in) financing activities | (27) | 29,188 | 29,023 | |||||||||
Increase (decrease) in cash and cash equivalents | (3,874) | 22,554 | 5,723 | |||||||||
Effect of exchange differences on cash and cash equivalents | (45) | (137) | (103) | |||||||||
Cash and cash equivalents at the beginning of the period: | 19,176 | 13,556 | 13,556 | |||||||||
Cash and cash equivalents at end of period | 15,257 | 35,973 | 19,176 | |||||||||
Noncash activities | ||||||||||||
Purchase of fixed assets | 756 | 222 | 57 | |||||||||
Issue of shares and options against intangible asset | - | 4,359 | 6,332 | |||||||||
About MeaTech
MeaTech is an international group of deep-tech food companies at the forefront of the cultured meat revolution. The company initiated activities in 2019 and is listed on the Nasdaq Capital Market under the ticker "MITC". MeaTech maintains facilities in Rehovot, Israel and Antwerp, Belgium and is in the process of expanding activities to the US. The company believes cultivated meat technologies hold significant potential to improve meat production, simplify the meat supply chain, and offer consumers a range of new product offerings.
MeaTech aims to provide an alternative to industrialized animal farming that dramatically reduces carbon footprint, minimizes water and land usage, and prevents the slaughtering of animals. With a modular factory design, MeaTech aims to offer a sustainable solution for producing a variety of beef, chicken and pork products, both as raw materials and whole cuts.
For more information, please visit: https://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, 2021, filed with the Securities and Exchange Commission on March 24, 2022. 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.
MeaTech Press Contact:
| MeaTech Investor Contacts:
| ||
Maissa Dauriac
| Joseph Green
| Ehud Helft
| |
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SOURCE MeaTech 3D Ltd.
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