20-F: Steakholder Foods Reports Initial Revenues in 2024 Amidst Strategic Shift

Steakholder Foods generated initial revenues in 2024 while focusing on commercializing 3D printers and plant-based ingredient blends, alongside cost-reduction measures and strategic collaborations.

Summary

• Steakholder Foods, a deep-tech food company, reported its 20-F filing for the fiscal year ended December 31, 2024.
• The company initiated activities in 2019 and is listed on the Nasdaq Capital Market under the ticker STKH.
• In 2024, Steakholder Foods generated initial revenues from the sale of plant-based premix blends.
• The company is focusing on alternative protein machinery production, initially for three-dimensional printing of meat and seafood analogs, followed by hybrid meats that combine cultivated and plant-based elements.
• The company's net loss for the year was approximately USD 8.5 million.
• Research and development expenses decreased by approximately $3.6 million, or 50.4%, to approximately $3.5 million for the year ended December 31, 2024.
• Marketing expenses decreased by approximately $1.3 million, or 49.1%, to approximately $1.4 million for the year ended December 31, 2024.
• General and administrative expenses decreased by approximately $0.8 million, or 18.6%, to approximately $3.6 million for the year ended December 31, 2024.
• As of December 31, 2024, the company had approximately $1.3 million in cash and cash equivalents.
• The company is implementing cost-reduction measures, including restructuring a lease agreement.
• The company is pursuing strategic collaborations, such as with UMAMI Bioworks and Wyler Farm Ltd.
• The company is developing hybrid meat blends for its printers, combining plant-based ingredients and cultivated animal cells.
• The company is developing cell lines and methods for working with growth media and differentiation media to support the production of cells such as fat and muscle cells as well as undifferentiated biomass.
• The company is using software-controlled bioreactors to foster cell proliferation for hybrid meats, and eventually cultivated meats.
• The company is seeking patent protection for its products, processes, and technologies.
• The company is subject to risks related to its financial condition, business strategy, competition, operations, government regulation, intellectual property, and operations in Israel.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company is generating initial revenues and pursuing strategic collaborations, it is also incurring significant losses and faces substantial risks and uncertainties. The auditor's concern about the company's ability to continue as a going concern further dampens the sentiment.

Positives

• The company generated initial revenues in 2024.
• The company is implementing cost-reduction measures.
• The company is pursuing strategic collaborations.
• The company is developing hybrid meat blends for its printers.
• The company has a portfolio of 15 patents and provisional and non-provisional patent applications pending with the USPTO, WIPO and in various countries worldwide.

Negatives

• The company incurred a net loss of approximately USD 8.5 million in 2024.
• The company has limited cash reserves of approximately $1.3 million as of December 31, 2024.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.

Risks

• The company may require substantial additional funds to complete its research, development, and commercialization activities.
• The company has a limited operating history and an unproven business model.
• The company faces competition in the alternative protein market.
• The company's products are subject to government regulations.
• The company's intellectual property rights may be challenged or infringed.
• Political, economic, and military conditions in Israel could have an adverse impact on the company's business.
• The ADS price may be volatile, and investors may lose all or part of their investment.
• The company may be a passive foreign investment company for U.S. income tax purposes, which could have adverse tax consequences for U.S. investors.

Future Outlook

The company expects to increase revenue as it successfully commercializes its technologies and establishes revenue-generating collaborations. The company also aims to provide ingredient blends that include cultivated cells for the printing of hybrid meat and seafood.

Management Comments

• The company aims to provide production technology and associated supplies needed to commercially produce structured alternative protein products.
• The company believes that its alternative protein and cultivated meat technologies hold significant potential to reduce the environmental impact of food production, improve the supply chain, and offer consumers a range of new product offerings.

Industry Context

The alternative protein market is expected to be highly competitive, with numerous brands and products competing for limited retailer shelf space, foodservice and restaurant customers and consumers. The company is competing with plant-based meat analog manufacturers and machinery providers.

Comparison to Industry Standards

• The company competes with plant-based meat analog manufacturers such as Redefine Meat, Chunk Foods and Juicy Marbles.
• Unlike these competitors, Steakholder Foods has a business-to-business focus, aiming to sell manufacturing machines rather than the food itself.
• The company is developing printer technologies as a platform to biomimic a wide variety of species, rather than one specific type of meat or seafood.
• The company also competes with other food machinery providers, but has not yet identified any food production machines utilizing similar technologies being developed to produce textured products in high throughput with digital control and development product capabilities.

Legal Proceedings

• In April 2021, the Company agreed to settle an administrative proceeding with the ISA for USD 192 thousand (NIS 700 thousand), for which the Company recorded a loss contingency.
• In February 2021, a civil claim was lodged against the fund that was set up at the time of the merger with MeaTech to settle claims relating to Ophectra's activities prior to the merger, in an amount of approximately USD 700 thousand (NIS 2,695 thousand).

Related Party Transactions

• Messrs. Kaufman and Kaiser are directors of BlueOcean Kayomot Ltd. and founding partners of BlueSoundWaves, which provides the Company with marketing, consulting, and investor engagement services in the U.S.
• In the years ended December 31, 2024, 2023 and 2022, the Company incurred net expenses of USD 172 thousand, USD 745 thousand and USD 2,210 thousand, respectively in marketing expenses with this related party.

Stakeholder Impact

• Shareholders may experience dilution due to future equity offerings.
• Employees may be affected by cost-reduction measures.
• Customers may benefit from innovative plant-based products.
• Suppliers may be affected by changes in the company's operations.
• Creditors face increased risk due to the company's financial difficulties.

Next Steps

• The company plans to continue securing sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships.
• The company will continue to develop and commercialize its alternative protein manufacturing technologies.
• The company will monitor developments at the FDA and USDA in connection with the MOU to determine whether any specific requirements or recommendations are published with specific regard to cultivated meat equipment manufacturers.

Key Dates

Keywords

alternative protein, 3D printing, cultivated meat, financial results, risk factors, Steakholder Foods, commercialization, technology, patents, Israel