STKH: Steakholder diversifies revenue sources by selling 3D bio-printers to other food companies.
NASDAQ:STKH
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On May 25th, 2023 Steakholder Foods (NASDAQ:STKH) announced that it has refocused its business model to target B2B meat manufacturers and cultivated meat producers. The company plans to offer these food companies the technical ability to produce a cultivated meat product that aims to closely mimic the taste, texture, and appearance of traditional meat. The company intends to monetize its 3D printers and bio-inks that are needed to support printer operations by selling these products to cultivated meat producers.
The company’s competitive advantage lies in its advanced expertise in 3D bio-printing technology and its ability to create highly sophisticated, structured end products that aim to closely mimic real meat.
The products it plans to offer include:
3D Bio-Printers
Steakholder Food’s 3D printers utilize state-of-the-art technology designed to produce cultivated meat products that mimic the texture, taste, and appearance of conventional meat. The company is developing two types of printer platforms:
1) Ready to Cook (RTC) printer
The flagship product, the RTC printer, produces a hybrid cultivated meat product made from a mixture of cultivated and plant-based ingredients.
The company plans to offer lab-sized and industrial-scale printers using one of two versions of proprietary technology to produce different end products. The first is DropJet technology, based on drops of gel-based materials to create a 3D structure, which is ideal for producing fish and seafood products. The second is Fusion technology which extrudes paste materials through a narrow nozzle, enabling the creation of fiber texture that best simulates conventional meat fibers.
2) 3D printer for incubated products
The company’s research and development team are developing a 3D printer for an incubated product, such as tissue-engineered steak, which is considered to be a major goal and accomplishment of the industry. This printer is expected to be a future value proposition for the company when economies of scale support a market for fully cultivated products. This printer is designed to produce a fully matured, cultivated, printed meat product. This will require live cells to grow, differentiate, and mature, forming complex fibrous tissue that resembles the texture and taste of conventional meat.
Bio-inks
Bio-inks are an important part of the company’s 3D printing technology. Steakholder Foods’ bio-inks are made of plant-based ingredients and cultivated cells. They are developed to ensure the production of tasty, safe, and consistent cultivated meat products. The company plans to offer customization options intended to allow clients to create bio-inks for any type of species they would like to produce, tailored to their specific needs and preferences. The bio-inks will be available for purchase alongside the 3D printers.
Arik Kaufman, CEO of Steakholder Foods stated, “By offering 3D printing production methodologies to B2B clients, Steakholder Foods has the opportunity to become a backbone supplier that enables the production of products that consumers seek and expect. Our 3D bio-printing technology and customized bio-inks reflect our commitment to revolutionizing the food industry.”
Subsequent to the initial announcement, on June 9th, the company announced that it has completed the upgrade of its industrial-scale 3D bio-printer. The integration of electronic cards and printheads with a fully digital ink delivery system now enables high-throughput printing for a variety of species through hundreds of printhead nozzles, with the potential to print tons of meat per month.
High-throughput 3D printing can be used to create complex meat structures at a commercial scale. The complete upgrade includes hundreds of nozzles that work simultaneously on a carousel to allow the high-throughput volume, with a modular structure that is expected to enable the addition of printheads per specifications of Steakholder Foods’ customers. The printheads are controlled and managed through a DropJet printed circuit board (PCB).
In the final part of the upgrade, printheads were connected to Steakholder Foods’ proprietary, in-house software, which models and reads design files and creates the slicing that manages printing through the printheads. This software enables the printing of complex 3D structures with extreme precision. The system’s adaptability is expected to allow the printing of almost any species, as the printer systems keep cells alive and undamaged throughout the printing process.
Future development is expected to include further automation capabilities, cost optimization, and validations for commercialization. Additional development may also include modification and customization for partner needs.
Itamar Atzmony, VP of Engineering at Steakholder Foods stated, “Steakholder Foods’ 3D printer cutting-edge technology is fully developed in-house. From the mechanical design to the software and electronics, this upgrade brings us one step closer to mass production, creating sophisticated meat and fish structures for the cultivated meat industry.”
The company is not abandoning its original goal of producing cultivated meat products themselves for distribution to various food related outlets. However, this is not the primary business focus at this time.
Valuation and Estimates
The company is changing its financial reporting to six month periods and will report financial results for the six month period June 30th, 2023 in July or August of 2023.
We are maintaining our current EPS estimates and our price target of $5.00 per share at this time. We will re-evaluate our price target and earnings estimates after the release of the six-month financial results as well as further clarification of the company’s new manufacturing business model.
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