3D Printing Financials: Steakholder Foods Balances Losses and 3D Printed Tech Advances in 2023

A pioneer in the field of 3D printed meat and fish, Steakholder Foods (Nasdaq: STKH) disclosed its 2023 financial results, a year highlighted by technological progress but overshadowed by financial hurdles. The Israeli-based company says it has not generated any revenue yet and attributes its financial struggles mainly to the costs associated with pioneering new technologies in the up-and-coming field of alternative meats.

Operating without revenue, Steakholder continues to invest heavily in research and development (R&D) to refine its innovative products. This strategic focus, aimed at disrupting the traditional meat industry, promises significant technological breakthroughs but has yet to translate into financial gains, reflecting the complex journey from lab innovation to market-ready solutions in the niche yet cutting-edge industry of alternative proteins.

According to its latest report, Steakholder saw its R&D expenses rise to $7 million in 2023 from $6.5 million the previous year, and total operating losses increased to $15.5 million from $14.5 million. Notably, the loss from continuing operations experienced a slight decrease due to lowered marketing expenditures. Cash flow from operations improved marginally, yet the company’s cash reserves dipped to $4.2 million by year-end.

Despite these challenges, the company raised roughly $11.2 million through equity offerings, a significant increase from the previous year’s $5.8 million. This capital influx, however, was offset by a reduction in total assets, which declined from $15.8 million at the end of 2022 to $10.8 million at the end of 2023, and total capital dropped from $9.4 million to $5.8 million, indicating a challenging financial landscape.

Printing a steak. Image courtesy of Steakholder Foods.

Even with these challenges, Steakholder remained focused on innovation and technological progress. In 2023, the company achieved several key milestones. It moved forth its 3D printing technologies, namely Drop Location in Space (DLS) for seafood textures and Fused Paste Layering (FPL) for fibrous meat textures. These innovations are key to its SHMeat and SHFish product lines, which include a variety of plant-based meat and fish alternatives designed to mimic traditional flavors and textures. These products cater to a broad audience, appealing to culinary enthusiasts, eco-conscious consumers, and people with diverse dietary preferences while also aligning with ethical considerations such as animal welfare and sustainability.

Moreover, the company emphasized its strategic direction by unveiling its commercial-scale 3D meat and fish printers and initiating the supply of the SHMeat and SHFish plant-based premixes, marking a giant step toward commercialization.

SHMeat alternative beef steak meat blend mixing kit. Image courtesy of Steakholder Foods.

The company also announced the closure and liquidation of its Belgian subsidiary, Peace of Meat, which began bankruptcy proceedings, leading to the end of operations and the termination of employment for its Belgian workforce. Steakholder’s focus is to advance its core 3D printing technology for cultivated meat products, so the Belgian subsidiary was no longer part of the plan. With this closure, Steakholder will reduce annual expenses by $4.5 million.

Moving on to 2024, Steakholder signed an agreement with Wyler Farm, Israel’s largest tofu producer and one of its leading alternative protein producers. As part of the deal, Steakholder aims to sell and install a commercial-scale 3D meat printer between the last quarter of 2024 and the first quarter of 2025 with a production capacity of up to 500 kg per hour of plant-based beef steaks. This is the first private-sector deal for Steakholder and is expected to be valued at several million dollars over the coming years.

Other partnerships include international expansions, such as with the regional Arab union known as the Gulf Cooperation Council (GCC), which signal potential future revenue streams. Plus, the company secured a $1 million grant from the Singapore-Israel Industrial R&D Foundation, a joint research funding organization.

Yet, the company’s financial health remains uncertain. Steakholder is classified as an “emerging growth company” under the JOBS (Jumpstart Our Business Startups) Act, designed to support early-stage businesses with relaxed reporting and regulatory requirements. Despite these advantages, the firm has consistently incurred losses since its inception and has funded its operations through equity sales, accumulating a total loss of approximately $69.8 million by the end of 2023.

DropJet 3D Bioprinter for fish and seafood. Image courtesy of Steakholder Foods.

The company’s financial information provided in the latest Form 20-F filed with the U.S. Securities and Exchange Commission (SEC) explicitly notes concerns about its “ability to continue as a going concern,” highlighting “ongoing significant losses” and the “need for further funding to sustain operations.”

From its latest fling on April 30, 2024: “We anticipate that we will continue to incur significant losses for the foreseeable future as our operating expenses and capital expenditures increase substantially due to our continued investment in our research and development activities and as we hire additional employees over the coming years. These activities may prove more expensive than we anticipate. We incur significant expenses in developing our technologies. Accordingly, we may not be able to achieve or sustain profitability, and we expect to incur significant losses for the foreseeable future.”

Steakholder has shown promise in innovation and strategy, yet its financial instability poses risks. Success depends on turning tech into revenue while managing costs. The challenges reflect those in the alternative protein and 3D printed food sectors, where market acceptance and scalability are key. As Steakholder moves forward, balancing tech with financial management will be essential for long-term success in this nascent industry.