Meatech 3D Ltd.

11/24/2021 | Press release | Distributed by Public on 11/24/2021 16:03

Current Report by Foreign Issuer (Form 6-K)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a‑16 OR 15d‑16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF NOVEMBER 2021
COMMISSION FILE NUMBER 001-40173
MeaTech 3D Ltd.
(Translation of registrant's name into English)
MeaTech 3D Ltd.
18 Einstein St., P.O. Box 4061
Ness Ziona 7414001 Israel
+972 -77-541-2206
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20‑F or Form 40‑F:

Form 20‑F ☒ Form 40‑F ☐
Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6‑K in paper as permitted by Regulation S‑T Rule 101(b)(7): ☐




MeaTech 3D Ltd. Reports Interim Financial Results for the Nine
Months Ended September 30, 2021 and Recent Business Developments

NESS ZIONA, Israel, November 24, 2021 - MeaTech 3D 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 nine months ended September 30, 2021, and provided an update on recent business developments.
Third Quarter 2021 Developments


•
Partnered with BlueSoundWaves, led by visionary investors Ashton Kutcher and Guy Oseary;

•
Manufactured over half a kilogram of cultivated fat biomass in a single production run;

•
Held several tasting events at key European food trade shows;

•
Filed a provisional patent application for differentiation of stem cells to produce cultured fat;

•
Completed Q3 2021 with a cash position of $25.4 million;
Management Comment
Sharon Fima, MeaTech's Chief Executive Officer, commented, "Strong strategic and operational progress continued in the third quarter. From a strategic perspective, we are very pleased to welcome Ashton Kutcher, Guy Oseary and their highly entrepreneurial team to the MeaTech story. We are building a close working relationship and leveraging their strong experience and network to advance on our vision of sustainable, clean meat production."

"From an operational standpoint, we achieved a key milestone, cultivating and growing 700 grams of pure chicken fat biomass in a single production run. This is a historic achievement on a global scale, and to our knowledge is the first public demonstration of cultivating pure fat-cell biomass entirely outside of an animal. It was also a key step within our strategic plan to develop a pilot plant for cultivated fat production, which is on track and planned for 2022.

Concluded Mr. Fima, "We continue to advance our 3D bioprinting technologies, which are designed to the ability to build structured meat such as steak tissues, from various lab grown cells. We believe our recent successes bring us closer to our long-term goal of changing human diets and bringing about an agricultural revolution toward more sustainable, yet equally savory, food choices."

Summary of Unaudited Third Quarter Financial Results

•
Research and Development expenses totaled $4.9 million in the nine months ending September 30, 2021, compared to $1.7 million in the same period in 2020. The 188% increase is mainly driven by the addition of the Company's Belgian plant, and reflects MeaTech's growing investment in research and development as it achieves milestones and expands its cultured meat technology capabilities.


•
General and Administrative expenses totaled $6.0 million in the nine months ending September 30, 2021, compared to $3.9 million in the same period in 2020. The 54% increase is mainly driven by higher insurance, legal and other corporate expenses since the Company's Nasdaq listing, totaling $2.6 million in the nine months ending September 30, 2021, compared to $0.7 million in the same period in 2020. This is partially offset by lower non-cash share-based payments in the amount of $2.1 million in the nine months ending September 30, 2021, compared to $2.5 million in the same period in 2020.

•
Marketing expenses totaled $0.9 million in the nine months ending September 30, 2021, compared to $0.3 million in the same period in 2020. The 171% increase reflects the Company's growing investment in marketing activities.


•
Operating loss totaled $11.8 million in the nine months ending September 30, 2021, compared to $16.0 million in the same period in 2020. Net of the $10.2 million non-cash public listing expense that the Company recorded in 2020 in connection with its reverse merger into a TASE-traded shell company, the operating loss in the nine months ending September 30, 2020 was $5.9 million. The $5.9 million net increase in the operating loss reflects a 100% increase, driven mainly by increased research and development and general and administrative expenses.


•
Total comprehensive loss was $12.0 million in the nine months ending September 30, 2021, or 10 cents per ordinary share, ($1.04 per ADS), compared to $16.4 million, or 29 cents per ordinary share ($2.89 per ADS), in the same period in 2020.


•
Cash flow used in operating activities was $9.6 million in the nine months ending September 30, 2021, compared to $2.7 million in the same period in 2020, reflecting a 262% increase driven mainly by a $5.9 million increase in cash-based operating loss in the first nine months of 2021, compared to the same period in 2020.


•
Cash flow used in investment activities was $7.5 million in the nine months ending September 30, 2021, compared to $0.3 million in the same period in 2020, reflecting a 2,404% increase, driven mainly by the $5.7 million cash component paid in the acquisition of our Belgian subsidiary and $1.1 million investments in fixed assets.


•
Cash flow from financing activities was $29.1 million in the nine months ending September 30, 2021, compared to $10.1 million in the same period in 2020, reflecting a 188% increase, driven mainly by the initial public offering on the Nasdaq in March 2021.


•
Cash and cash equivalents were $25.4 million at September 30, 2021, compared to $13.6 million at year-end 2020, an increase of 88%. The increase was driven mainly by the net proceeds from the Company's Nasdaq IPO.


•
Current assets increased 99% to $27.5 million at September 30, 2021 from $13.8 million at year-end 2020, driven mainly by increase in cash and cash equivalents.


•
Non-current assets increased 335% to $15.8 million at September 30, 2021 from $3.6 million at year-end 2020, driven mainly by the acquisition of the Company's Belgian subsidiary.


•
Total assets increased 148% to $43.4 million at September 30, 2021, up from $17.5 million at year-end 2020, driven mainly by the acquisition of the Company's Belgian subsidiary and the cash proceeds from the Nasdaq IPO.


•
Total capital increased 161% to $40.8 million at September 30, 2021, up from $15.6 million at year-end 2020. The increase was mainly driven by proceeds from the Nasdaq IPO and partially offset by the $11.7 million accumulated loss for the period.

Business Highlights and Recent Developments

Partnered with Ashton Kutcher and Guy Oseary of BlueSoundWaves
BlueSoundWaves collective, led by Ashton Kutcher and Guy Oseary together with leading strategic players such as Effie Epstein, partnered with MeaTech to work to accelerate the Company's growth in developing and potentially commercializing MeaTech's proprietary cultured meat production technologies. The collective intends to work closely with management to propel its strategy, go-to-market activities and brand forward by leveraging the collective's marketing, strategic expertise and network.
Manufactured 700g of Cultivated Fat Biomass
MeaTech's Belgian plant cultivated just over 700 grams of pure chicken fat biomass in a single production run. The Company believes that producing this quantity of pure cultured material in one run is a breakthrough toward potentially manufacturing cultivated chicken fat at an industrial scale and cost parity.
While many consumers currently enjoy fully plant-based meat alternatives, many find it falls short of replicating the 'meatiness' of conventional meat. MeaTech believes that real cultured animal fats can potentially deliver the signature flavors, aromas, and textures currently derived from conventional farmed meat, thus delivering an enhanced consumer experience, and these products are known as hybrid products. MeaTech believes hybrid products will provide initial revenue streams while the Company develops and scales an industrial process for achieving its vision of offering pure cultivated meat products.
Tasting Events at Key European Food Trade Shows
MeaTech held several selective in-person tasting events featuring its hybrid meat products across Europe during October 2021, including at the Anuga Global Trade Fair for the Food and Beverage Industry, the largest food and beverage fair in Europe, the New Food Conference, Europe's largest alternative protein conference, and the Food Annual Partner Event and Venture Summit of EIT, Europe's leading food innovation initiative.
Filed Provisional Patent Application for Stem-Cell Differentiation to Produce Cultured Fat
MeaTech filed a provisional patent application with the United States Patent and Trademark Office (USPTO) relating to methods that use purely plant-sourced inputs to guide targeted differentiation of embryonic mesenchymal stem cells (eMSCs) into adipocytes, which are fat cells. MeaTech's goal for the novel technology covered by this provisional patent application is to allow for production of intramuscular fat as is typically found in marbled meat, such as Wagyu beef.



MeaTech 3D Ltd.
Consolidated Interim Financial Statements As At September 30, 2021

Financial Statements of MeaTech 3D Ltd.
Page
Contents:
Unaudited Condensed consolidated interim statements of financial position
2
Unaudited Condensed consolidated interim of Income and of Comprehensive Loss
3
Unaudited Condensed consolidated interim statements of changes in equity
4
Unaudited Condensed consolidated interim statements of cash flows
5
Notes to the condensed consolidated interim financial statements
6

Unaudited Condensed Consolidated Interim Statements Of Financial Position
September 30
December 31
2021
2020
USD thousands
USD thousands
Current assets
Cash and cash equivalents
4
25,441
13,556
Other investment
6
149
149
Receivables
5
1,890
131
Total current assets
27,480
13,836
Non-current assets
Restricted deposits
391
51
Other investment
6
1,287
2,513
Right-of-use asset
328
168
Intangible assets
14
11,362
-
Fixed assets, net
2,467
906
Total non-current assets
15,835
3,638
Total Assets
43,315
17,474
Current liabilities
Trade payables
313
351
Other payables
7
1,837
996
Current maturities of lease liabilities
251
180
Derivative instrument
-
316
Total current liabilities
2,401
1,843
Non-current liabilities
Long-term lease liabilities
81
-
Total non-current liabilities
81
-
Capital
Share capital and premium on shares
68,348
30,481
Capital reserves
2,653
3,319
Currency translation differences reserve
519
780
Accumulated deficit
(30,687
)
(18,949
)
Total capital
40,833
15,631
Total liabilities and capital
43,315
17,474

2
Unaudited Condensed Consolidated Interim Of Income And Of Comprehensive Loss
Nine month ended
September 30,
Nine month ended September 30,
Year ended
December 31,
2021
2020
2020
USD thousands, except share data
USD thousands, except share data
USD thousands, except share data
Research and development expenses
10
4,928
1,703
2,491
Marketing expenses
11
872
322
506
General and administrative expenses
12
5,961
3,859
5,380
Public listing expenses
-
10,164
10,164
Operating loss
11,761
16,048
18,541
Financing expenses (income), net
13
(23
)
(33
)
(17
)
Loss for the period
11,738
16,015
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
(456
)
18
(758
)
Currency translation differences loss (income) that might be transferred to profit or loss
717
-
-
Total comprehensive loss for the period
11,999
16,367
18,100
Loss per ordinary share, no par value (USD)
Basic and diluted loss per share (USD)
0.104
0.289
0.308
Weighted-average number of shares outstanding - basic and diluted (shares)
112,891,686
55,343,639
60,112,197

3
Unaudited Condensed Consolidated Interim Statements Of Changes In Equity (Deficit)
Share and capital premium
Fair value of
financial assets
reserve
Transactions
with related
parties reserve
Currency
translation
differences
reserve
Share-based
payments
reserve
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
-
-
-
-
2,829
-
2,829
Issuance of shares and warrants, net
31,176
-
-
-
-
-
31,176
Exercise of options - Share-Based Payment
6,691
(3,495
)
3,196
Other comprehensive income )loss)
-
-
-
(261
)
-
-
(261
)
Loss for the period
-
-
-
-
-
(11,738
)
(11,738
)
Balance as at September 30, 2021
68,348
(334
)
14
519
2,973
(30,687
)
40,833
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
7,384
-
-
-
-
-
7,384
Share-Based Payment
-
-
-
-
2,973
-
2,973
Exercise of options
2,592
-
-
-
(185
)
-
2,407
Other comprehensive income (loss)
-
(334
)
-
(18
)
-
-
(352
)
Loss for the period
-
-
-
-
-
(16,015
)
(16,015
)
Balance as at September 30, 2020
23,295
(334
)
14
4
2,788
(16,440
)
9,327
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

4
Unaudited Condensed Consolidated Interim Statements Of Cash Flows


Nine months
ended
September 30,
2021
Nine months
ended
September 30,
2020
Year ended
December 31,
2020


USD thousands
USD thousands
USD thousands
Cash flows - operating activities


Net Loss for the period


(11,738
)
(16,015
)
(18,524
)


Adjustments:


Depreciation and amortization


479
130
213
Change in fair value of derivative


(312
)
(6
)
(36
)
Change in fair value of other investment
6
(138
)
(48
)
(74
)
Changes in net foreign exchange expenses

411
Share-based payment expenses

2,829
2,973
3,958
Public listing expenses

-
10,164
10,164
Changes in asset and liability items:

Decrease (increase) in receivables

(1,523
)
9
5
Increase (decrease) in trade payables

(309
)
(8
)
126
Increase (decrease) in other payables

682
142
336
Net cash from (used in) operating activities

(9,619
)
(2,659
)
(3,832
)

Cash flows - investment activities

Acquisition of fixed assets

(1,124
)
(269
)
(681
)
Decrease (increase) of restricted deposit

(337
)
(31
)
(6
)
Loan provided

(367
)
Acquisition of other investments, net of cash acquired
14
(5,685
)
-
(1,188
)

Net cash used in investing activities

(7,513
)
(300
)
(1,875
)

Cash flows - financing activities

Proceeds from issuance of shares and warrants

27,143
7,750
14,887
Issuance costs

(1,145
)
(366
)
(819
)
Repayment of liability for lease

(222
)
(87
)
(140
)
Proceeds on account of other investment
6
111
35
71
Proceeds on account of capital issuance

-
222
222
Proceeds with regard to derivative

-
151
348
Proceeds from exercise of share options

3,196
2,407
2,776

Net cash from financing activities

29,083
10,112
17,345

Increase in cash and cash equivalents

11,951
7,153
11,638
Effect of exchange differences on cash and cash equivalents

(66
)
(65
)
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

25,441
8,362
13,556
Non cash activities

Purchase of fixed assets

188
48
143
Issue of shares and options against intangible asset

5,178
-
-

5

Note 1 - General

A.
MeaTech 3D Ltd. (formerly Ophectra Real Estate and Investments Ltd. and Meat-Tech 3D Ltd.) (the "Company") was incorporated in Israel on July 22, 1992 as a private company limited by shares in accordance with the Companies Ordinance, 1983, and later a publicly-traded company whose ordinary shares were listed for trade on the Tel Aviv Stock Exchange. The Company's official address is 18 Einstein Street, Ness Ziona, Israel.
The Company's foodtech activities were commenced in July 2019 by a company called MeaTech Ltd., which merged with the Company in January 2020 and became a fully-owned subsidiary, now called MeaTech MT Ltd. The Company was the surviving entity of the merger, and continued the pre-merger business operations, utilizing the pre-merger management and employees, of MeaTech Ltd.
In February 2021, the Company acquired Belgian cultured fat developer Peace of Meat BV, For further details, see Note 14 below.
On March 17, 2021, the Company completed its U.S. initial public offering of 2,721,271 ADSs, each representing ten ordinary shares of the Company (in total, 27,212,710 ordinary shares), at a public offering price of $10.30 per ADS, resulting in gross proceeds of $28 million and net proceeds of $24.7 million. The ADSs trade on the Nasdaq Capital Market under the symbol "MITC." On August 5, 2021, the Company completed the voluntary de-listing of its ordinary shares from the TASE. A number of ordinary shares remain traded over the counter (OTC:MTTCF).
The Company is developing a suite of advanced high-throughput manufacturing technologies to produce cell-based alternative protein products for cultivated, sustainable meat production, and focused on developing premium, center-of-plate meat products, including development of high-throughput bioprinting systems.

B.
In March 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic. To date, the impact of the pandemic on the Company's operations has been mainly limited to a temporary facility closure in the context of a government-mandated general lockdown, which temporary delayed certain development activities. The Company estimates that as of the date of approval of the financial statements, the COVID-19 pandemic is not expected to affect the Company's operations. However, the Company is unable to assess with certainty the extent of future impact, in part due to the uncertainty regarding the duration of the COVID-19 pandemic, its force and its effects on the markets in which the Company operates and the effects of possible government measures to prevent the spread of the virus.
C.
Definitions:
In these financial statements:
(1) The Company - MeaTech 3D Ltd.
(2) The Group - The Company and its subsidiaries, MeaTech MT Ltd., formerly known as MeaTech Ltd, Meatech Europe BV and Peace of Meat BV (hereafter "Peace Of Meat" OR "POM")
(3) Related Party - as defined in IAS 24 (revised).
(4) USD - United States Dollar
(5) NIS - New Israeli Shekel
(6) EUR - Euro
(7) ADS - American Depositary Shares
6
Note 2 - Basis of preparation of the Financial Statements

A.
Statement of compliance with IFRS
These interim condensed consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and do not include all of the information required in full annual financial statements. They should be read in conjunction with the financial statements as at and for the year ended December 31, 2020.
The interim condensed consolidated financial statements were approved by the Company's Board of Directors on November 24, 2021.
The main accounting policy and calculation methods applied in the preparation of these Consolidated Interim Financial Statements are consistent with those applied in the preparation of the Annual Financial Statements.
B.
Use of estimates and judgments
The preparation of these interim condensed consolidated financial statements in conformity with IFRS requires management to make judgments for preparing the assessments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. It should be clarified that actual results may differ from such estimates.
The judgments made by management, when applying the Group's accounting policies and the key assumptions used in assessments that involve uncertainty, are consistent with those applied in the preparation of the annual financial statements.
C.
Functional currency and presentation currency
The NIS is the currency that represents the primary economic environment in which the Company and its Israeli subsidiary operate, and is therefore the functional currency of their operations. The Euro is the currency that represents the primary economic environment in which the Company's European subsidiaries operate, and is therefore the functional currency of their operations. Nonetheless, for reporting purposes, the consolidated financial statements, which were prepared on the basis of the functional currencies, were translated into US Dollars, which the Company selected as its presentation currency, as its securities are traded on the Nasdaq Capital Markets, and in order to make the Company's financial statements more accessible to U.S.-based investors.
Assets and liabilities were translated at the exchange rate of the end of the period; expenses and income were translated at the exchange rate at the time they were generated. Exchange rate differentials generated due to such translation are attributed to theCurrency translation differences reserve.

1 USD = 3.229 NIS and 3.215 NIS and 3.441 NIS as of September 30, 2021, December 31, 2020, and September 30, 2020 correspondingly.

The average USD exchange rate was 3.255 NIS and 3.479 NIS and 3.442 NIS for the nine months ended at September 30, 2021 and September 30, 2020 and the year ended December 31, 2020, correspondingly.

1 USD = 0.8643 EUR as of September 30, 2021, and the average USD exchange rate was 0.8357 EUR for the nine months ended at September 30, 2021.

7
Note 3 - Material Events in the reporting period

A.
In February 2021, MeaTech finalized its acquisition of Peace of Meat BV, a Belgian producer of cultured avian products, for up to USD 19.9 million in cash and equity, depending on milestone achievement, see further details in Note 14.

B.
In March 2021, the Company completed an initial public offering of ADS representing ordinary shares on the Nasdaq Capital Market, with aggregate gross proceeds of USD 28 million. For further details see Note 1(A).
Note 4 - Cash and Cash Equivalents

September 30
December 31
2021
2020
USD thousands
USD thousands
Cash in USD
19,574
1,021
Cash in NIS
4,667
7,627
Cash in Euro
1,200
4,908
Total cash and cash equivalents
25,441
13,556

Note 5 - Receivables and Prepaid Expenses

September 30
December 31
2021
2020
USD thousands
USD thousands
Institutions
571
102
Prepaid expenses
1,245
20
Other
74
9
1,890
131

8

Note 6 - Other Investments

Developments in Other investment
USD thousands
As at January 1, 2021
2,662
Initial investment in POM transferred to intangible asset
(1,223
)
Effect of changes in exchange rates
(25
)
Therapin investment as of January 1, 2021
1,414
Proceeds from Therapin asset
(111
)
Profit from increase in fair value
138
Effect of changes in exchange rates
(5
)
As at September 30, 2021(1)
1,436


(1)
USD 149 thousand are classified as a current asset.
The fair value was measured using discount rates that reflect the risks in the projected repayments. The estimated capitalization interest was based on Therapin's financial statements, cash balances and liabilities, repayment dates, and analysis of the market in which Therapin operates. The expected additional payment event is 5 years, and the interest rate for capitalization of the debt is 10.6%-11.3%.
Note 7 - Other Payables

September 30
December 31
2021
2020
USD thousands
USD thousands
Accrued expenses
418
263
Employee benefits
842
503
Contingent liability
217
217
Subsidiary government grant
266
0
Others
94
13
1,837
996

9
Note 8 - Capital and Reserves

Thousands of
Ordinary Shares
September 30, 2021
Issued and paid-in share capital as at January 1, 2021
79,866
Exercise of share options during the period - Investor-related
3,010
Exercise of share options during the period - Share-Based Payment-related
2,030
Issued not - for cash during the period
10,822
Issued for cash during the period
28,588
Issued and paid-in share capital as at September 30, 2021
124,316
Authorized share capital
1,000,000

10
Note 9 - Share-based payments

New allotments during the nine months ended September 30, 2021 that remain outstanding are set out below. All granted options and restricted stock units (RSU) are non-tradable and physically-settled:
Date of grant and eligible recipients
Terms of the instrument
No. of ordinary shares (thousands)
Vesting Conditions
Contractual duration of the instrument (years)
Options awarded to employees of the Company and subsidiaries on March 25, 2021
Options exercisable for ordinary shares without par value of the Company
2,600
1/3 after one year and the balance in 8 quarterly tranches
4 years
RSUs awarded to directors on March 25, 2021
The RSUs vest automatically at no exercise price
90
1/3 after one year and the balance in 8 quarterly tranches
4 years
Options awarded to employees of the Company and subsidiaries on April 19, 2021
Options exercisable for ordinary shares without par value of the Company
800
1/3 after one year and the balance in 8 quarterly tranches
4 years
Options awarded to employees of the Company and subsidiaries on July 22, 2021
Options exercisable for ordinary shares without par value of the Company
1,362.5
1/3 after one year and the balance in 8 quarterly tranches
4 years
RSUs awarded to directors on September 14, 2021
The RSUs vest automatically at no exercise price
287.5
1/3 after one year and the balance in 8 quarterly tranches
4 years
Options awarded to board directors on September 14, 2021
Options exercisable for ordinary shares without par value of the Company
785.6
1/3 after one year and the balance in 8 quarterly tranches
4 years
Options awarded to the deputy CEO on September 14, 2021
Options exercisable for ordinary shares without par value of the Company
250
1/3 after one year and the balance in 8 quarterly tranches
4 years
Total options/RSUs exercisable/vesting into shares granted in the period of nine months ended September 30, 2021
6,175.6

11
Note 9 - Share-based payments (cont.)

The fair value at the dates the options and RSUs were awarded was estimated using a binomial option pricing model.
Breakdown of the parameters used for measuring fair value at the date the share-based payment plans were awarded:
Options/RSUs
Fair value at date awarded
NIS 10.2 (USD 3.1) million
Parameters taken into account in the fair value calculation:
Share price (NIS at date awarded)
2.05-3.53
Exercise price (NIS unlinked)
0-3.68
Expected volatility (weighted average)
73.84%-82.42%
Expected useful life (weighted average)
4 years
Risk-free interest rate
0.23%-0.64%
Expected rate of dividend
0%

The expected volatility was determined on the basis of share price volatility in similar companies, due to the Company's limited share price performance history since the date of the merger in January 2020 described in Note 1A above. The simplified method was used for estimating the expected useful life of the employee stock options. The estimated useful life of the options for consultants and officers is the full contractual life of the option. The risk-free interest rate was based on NIS-linked Israeli Government bonds until the time of the Company's Nasdaq listing, and US Treasury notes thereafter, with time to maturity equivalent to the expected useful life of the options. Share price was used based on share prices on the TASE until the time of the Company's Nasdaq Capital Markets listing, and on Nasdaq thereafter,.
The total non-cashflow expense recorded during the nine months ended September 30, 2021, amounted to approximately USD 2.8 million (NIS 9.2 million).
12

Note 10 - Research and Development Expenses

Nine months ended
September 30,
Nine months ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
Salaries, wages and related expenses(1)
2,254
914
1,369
Share-based payment(1)
643
357
476
Materials
1,132
210
319
Professional services
236
79
89
Registration, drafting and filing of patents
0
15
25
Maintenance, office and software fees
106
101
116
Depreciation and amortization
262
20
59
D&O insurance
231
0
0
Others
64
7
38
Total Research and Development Expenses
4,928
1,703
2,491

(1) Including expenses in respect of related parties - see Note 16.

Note 11 - Marketing Expenses

Nine month ended
September 30,
Nine month ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
Salaries, wages and related expenses
360
175
255
Share-based payment
84
108
139
PR and advertisement
386
27
91
Maintenance, office and software fees
16
10
13
Depreciation and amortization
12
2
3
Others
14
-
5
Total Marketing Expenses
872
322
506

13
Note 12 - General and Administrative Expenses

Nine months ended
September 30,
Nine months ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
Salaries, wages and related expenses(1)
897
340
556
Share-based payment(1)
2,102
2,508
3,343
Legal and professional services(1)
1,066
632
991
Contingent liability expenses
-
203
217
D&O insurance
1,266
-
-
Corporate costs
266
44
60
Maintenance, office and software fees
87
29
38
Depreciation and amortization
205
95
151
Others
72
8
24
Total General and Administrative Expenses
5,961
3,859
5,380

(1) Including expenses in respect of related parties - see Note 16.

Note 13 - Financing Income and Expenses

Nine months ended
September 30,
Nine months ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
Financial Income
Net change in fair value of financial instruments mandatorily measured at fair value through profit or loss
457
55
110
Financial Expenses
Net foreign exchange loss
411
17
85
Interest expense on lease liabilities
13
2
5
Bank interest and commission expenses
10
3
3
Total Financial expenses
434
22
93
Net financing expenses (income) recognized in profit or loss
(23
)
(33
)
(17
)

14
Note 14 - Subsidiaries

In February 2021, the Company completed a purchase of all of the outstanding share capital not yet owned by the Company, of Belgian cultured fat developer Peace of Meat BV for total consideration of up to EUR 16.3 million (USD 19.9 million). The total consideration payable by the Company in the acquisition consists of both cash and equity instruments to be paid to Peace of Meat shareholders and in legal and finder's fees. The total consideration is to be paid part as of the closing of the acquisition and part upon the achievement of the defined milestones and sub-milestones.
Substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets (the "intangible asset"), thus the subsidiary is not considered a business and the acquisition is accounted as an asset acquisition.
Contingent consideration, dependent upon the achievement of technological milestones will be recognized at the time of the achievement of each milestone on the basis of the shares and cash that are payable.
The following summarizes the major classes of consideration assumed at the acquisition date:

Total consideration

USD thousands
Cash consideration at closing date
4,799
Initial cash investment in acquiree
1,223
Equity instruments issued (4,070,766 ordinary shares) (1)
4,359
Acquisition-related costs (2)
254
Total consideration as of consolidation date
10,635
Contingent consideration (3)
9,308
Total consideration subject to achievement of all milestones
19,943


(1)
Equity instruments issued
The fair value of the ordinary shares issued was based on the listed share price of the Group at February 10, 2021 of NIS 3.986 per share.


(2)
Acquisition-related costs
Including legal cost and finder's fee.


(3)
Contingent consideration
The company agreed to pay the selling shareholders and the finder an additional 4,070,766 rights to ordinary shares with a value of USD 4.4 million and cash consideration of USD 4.9 million upon the achievement of defined milestones related to Peace of Meat's biomass and bioreactor size, density, capacity and production. The acquisition agreement specified that each milestone must be reached within a six-month period, over a total of two years, which can be extended by up to nine additional months under circumstances set forth in the acquisition agreement. As of the date of approval of these financial statements, Peace of Meat had fully achieved the first such milestone, and partially achieved the second.

15
Note 14 - Subsidiaries (cont'd)

Identifiable assets acquired and liabilities assumed:

Peace Of Meat condensed Balance Sheet
USD thousands
Current assets
425
Non-current assets
588
Current liabilities
(578
)
Non-current liabilities
(16
)
Tangible assets net
419

IPR&D - Intangible asset

Intangible asset that was recognized as a result of the acquisition and additions made by September 30, 2021 as follows:

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
Additional contributions post consolidation date according to milestone achievement:
Cash consideration
837
Payment liabilities
78
Shares consideration
819
Total
11,950
FX rate effect
(588
)
Period end intangible asset balance
11,362

The aggregate cash flows for the Group as a result of the acquisition in the nine months ended September 30,2021
USD thousands
Cash and cash equivalents paid
(5,053
)
Cash and cash equivalents of the subsidiary
205
Cash consideration for milestone achievement during the period
(837
)
Net reduction of cash flow as of consolidation date
(5,685
)

16

Note 15 - Contingent Liabilities

From time to time, the Company may be party to litigation or other legal proceedings that it considers to be a part of the ordinary course of its business. The Company is not currently involved in any legal proceedings that could reasonably be expected to have a material adverse effect on its business, prospects, financial condition or results of operations.

A.
In November 2020, the Israeli Securities Authority, or ISA, initiated an administrative proceeding claiming negligent misstatement regarding certain immediate and periodic reports published by the Company's predecessor (Ophectra) during the years 2017 and 2018, prior to the merger with MeaTech and prior to establishment of the settlement fund in connection with the Merger. In February 2021, the trustee of the settlement fund informed the Company that the ISA views the Company as a party to this proceeding, notwithstanding the settlement and establishment of the settlement fund. This proceeding is of an administrative nature and carries a potential penalty in the form of a monetary fine which, under applicable Israeli law, could be as high as NIS 5 million. In April 2021, following negotiations with the ISA, the Company agreed to settle the matter for $0.2 million (NIS 0.7 million), for which the Company recorded a provision. The settlement is subject to approval of the ISA's Enforcement Committee.

B.
In February 2021, a civil claim was lodged against the settlement fund, relating to Ophectra's activities prior to establishment of the settlement fund, in an amount of USD $0.8 million (NIS 2.5 million). The Company believes that the probability is low of a final ruling against the settlement fund.
17

Note 16 - Related and Interested Parties


 A.
Balances with related parties

Nine months
ended
September 30,
Nine months
ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
Trade and other payables
138
113
117


B.
Expense amounts with respect to related parties

Nine months
ended
September 30,
Nine months
ended
September 30,
Year ended
December 31,
2021
2020
2020
USD thousands
USD thousands
USD thousands
General and administrative expenses
Salaries, wages and related expenses
360
278
316
Legal and professional services
208
280
281
Share-based payments
533
371
488
Research & Development expenses
Salaries, wages and related
205
120
121
Share-based payments
55
25
64


1.
Key Management Personnel

The Company recognizes four key management personnel as related parties, namely the Chief Executive Officer and Chief Technologies Officer (CEO and CTO), Deputy CEO, Chief Financial Officer (CFO) and the Vice President of Research and Development (VP R&D).
The CEO and CTO, who also serves as a director, Mr. Sharon Fima, has been employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) since September 1, 2019. Mr. Fima was entitled to a gross annual salary of NIS 0.5 million (USD 0.1 million) plus generally accepted social benefit contributions for senior executives and the use of a company car, including a related tax gross-up. Commencing August 1, 2021, Mr. Fima is entitled to an annual gross salary of NIS 0.6 million ($0.2 million). Mr. Fima was also allocated options valued at NIS 0.2 million (USD 0.1 million), recognized over the three-year vesting period commencing March 2020.
18

Note 16 - Related and Interested Parties (cont.)
The Deputy CEO, who also serves as a director, Mr. Omri Schanin, has been employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) since September 1, 2019. Mr. Schanin was entitled to a gross annual salary of NIS 0.4 million (USD 0.1 million) plus generally accepted social benefit contributions for senior executives. Commencing August 1, 2021, Mr. Schanin is entitled to an annual gross salary of NIS 0.5 million ($0.2 million). Mr. Schanin was also allocated options valued at an aggregate of NIS 0.8 million (USD 0.25 million), recognized over their three-year vesting periods commencing in 2021.
The CFO, Mr. Guy Hefer, has been employed by the Company since October 18, 2020. Mr. Hefer was entitled to a gross annual salary of NIS 0.4 million (USD 0.1) plus generally accepted social benefit contributions for senior executives. Commencing August 1, 2021, Mr. Hefer is entitled to an annual gross salary of NIS 0.5 million (USD 0.2 million). Mr. Hefer was also allocated options valued at an aggregate of NIS 0.75 million (USD 0.23 million). recognized over their three-year vesting periods commencing in 2021.
The VP R&D, Mr. Dan Kozlovski, has been employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) since December 5, 2019. Mr. Kozlovski was entitled to a gross annual salary of NIS 0.4 million (USD 0.1 million) plus generally accepted social benefit contributions for senior executives. Commencing August 1, 2021, Mr. Kozlovski is entitled to an annual gross salary of NIS 0.5 million (USD 0.2 million). Mr. Kozlovski was also allocated options valued at of NIS 0.07 million (USD 0.02 million). recognized over the three-year vesting period commencing in 2019.

2.
Directors

The Company recognizes its directors as related parties. Mr. Steve H. Lavin was appointed as active chairman of the Company's board of directors and he is entitled to annual monetary compensation of USD 0.2 million as well as share-based compensation.
Mr. Danny Ayalon is entitled to annual compensation of USD 0.03 million for his term of office as a director of the Company, as well as share-based compensation.
Additional non-executive directors were compensated in accordance with the terms of the Israeli Companies Regulations (Rules Regarding Payment and Expenses for External Directors), 2000, as amended until July 31, 2021 and are since entitled to annual compensation of USD 0.03 million as well as share-based compensation.
19

Note 17 - Subsequent Event

In October 2021, the Company announced that it had partnered with BlueSoundWaves, a collective led by Ashton Kutcher and Guy Oseary, together with leading strategic players such as Effie Epstein, to accelerate the Company's growth in developing and commercializing its proprietary cultured meat production technologies. In return for its services, BlueSoundWaves has received warrants exercisable into 621,577 ADSs, exercisable at a price at or above the closing price at the time of the agreement (the precise amount to be determined by the amount of increase in the ADS price by the time of exercise), and restricted stock units representing 124,315 ADSs, all vesting between one and three years from the date of the agreement and subject to acceleration upon milestone achievement.
20

Forward-Looking Statements
This announcement 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 announcement. 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.


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MeaTech 3D Ltd.
By:
/s/ Sharon Fima
Name: Sharon Fima
Title: Chief Executive Officer, Chief
Technology Officer and Director

Date: November 24, 2021