MITC: MeaTech 3D announces 1st quarter results and provides updates on technology and business developments.
NASDAQ:MITC
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MeaTech 3D (NASDAQ:MITC) reported 1st quarter 2022 financial results on May 31, 2022 and results were largely in-line with expectations. Quarterly EPS was a loss of ($0.04) which matched our estimates.
Research and development expenses came in at $2.1 million during the quarter which was below our estimates of closer to $3.0 million. The 90% increase from the prior year quarter was due to the addition of the company’s Belgian subsidiary (Peace of Meat) as well as MeaTech’s higher level of investment in its cultured meat technology capabilities.
Marketing expenses totaled $1.1 million which was above our estimates largely due to higher levels of stock compensation. General and administrative expenses were $2.1 million in the quarter which was a 23% decrease from the prior year quarter. The decrease was primarily due to lower stock compensation expenses which was offset by higher Director & Officer insurance expenses.
Operating loss was ($5.3) million compared to ($4.2) million in the prior year period due to the increase in operating expenses mentioned above. Cash flow used in operations came in at ($2.8) million and capital expenditures totaled $800,000.
Cash and cash equivalents totaled $15.3 million compared to $19.2 million at the end of the 2021 fiscal year. The company has no outstanding debt and no major liabilities with the exception of ongoing lease obligations.
During the quarter, MeaTech made significant announcements and updates regarding the company’s technologies and other business development progress.
In February, the company announced the successful development of a new technology process where 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. MeaTech has filed a provisional patent application with the USPTO.
In March, the company moved to new headquarters with state-of-the-art laboratories in Rehovot, Israel. That area is considered the epicenter of Israel’s food-tech sector. The new space allows the company to improve on its cultured meat R&D and 3D bioprinting technology as well as continue to grow the biology and engineering teams. The new headquarters also features a tasting kitchen.
During the quarter, 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 start in 2022. The new facility will expand and accelerate the company’s cultured avian technology and R&D capabilities.
In March, MeaTech hosted a major tasting event at the company’s headquarters with its Israeli anchor investors and other 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.
Subsequent to quarter end, the company made the following announcements in May 2022:
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 through a wholly owned private MeaTech subsidiary to create an additional revenue stream in order to accelerate commercialization.
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 innovative hybrid alternative meat products that better resemble the flavor, aroma, texture, and nutritional value of conventional meat.
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. The company plans to support UN goals and issues embodied in the UN’s Sustainable Development Goals (SDGs).
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