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Exhibit 99.1

 

 

Steakholder Foods Ltd. (formerly known as MeaTech 3D Ltd.)

Unaudited Consolidated Interim Financial Statements As At June 30, 2022

 

Financial Information of Steakholder Foods Ltd.

Page

 

 

Contents:

 

Unaudited Condensed consolidated interim statements of financial position

F-2

Unaudited Condensed consolidated interim statement of Income and of Comprehensive Loss

F-3

Unaudited Condensed consolidated interim statements of changes in equity

F-5

Unaudited Condensed consolidated interim statements of cash flows

F-6

Notes to the condensed consolidated interim financial statements

F-7

 

 
Unaudited Condensed consolidated interim statements of financial position
 
         
June 30
    
June 30
    
December 31
  
         
2022
    
2021
    
2021
  
         
USD thousands
    
USD thousands
    
USD thousands
  
Current assets
                        
                         
Cash and cash equivalents
  
4
      
8,434
      
30,637
      
19,176
  
Other investment
          
137
      
147
      
154
  
Receivables
  
5
      
2,237
      
1,174
      
2,782
  
Total current assets
          
10,808
      
31,958
      
22,112
  
                               
Non-current assets
                              
                               
Restricted deposits
          
380
      
388
      
405
  
Other investment
          
1,209
      
1,264
      
1,355
  
Right-of-use asset
  
15
      
3,612
      
306
      
407
  
Intangible assets
          
12,360
      
9,930
      
13,453
  
Fixed assets, net
          
4,653
      
2,206
      
2,922
  
                               
Total non-current assets
          
22,214
      
14,094
      
18,542
  
                               
Total Assets
          
33,022
      
46,052
      
40,654
  
                               
Current liabilities
                              
                               
Trade payables
          
779
      
359
      
382
  
Other payables
  
6
      
2,174
      
1,573
      
2,239
  
Current maturities of lease liabilities
  
15
      
428
      
210
      
165
  
                               
Total current liabilities
          
3,381
      
2,142
      
2,786
  
                               
Non-current liabilities
                              
                               
Long-term lease liabilities
  
15
      
3,247
      
102
      
246
  
                               
Total non-current liabilities
          
3,247
      
102
      
246
  
                               
Capital
                              
                               
Share capital and premium on shares
          
70,476
      
65,283
      
69,610
  
Capital reserves
          
3,943
      
4,383
      
3,708
  
Currency translation differences reserve
          
(1,898
)
    
857
      
1,275
  
Accumulated deficit
          
(46,127
)
    
(26,715
)
    
(36,971
)
                               
Total capital
          
26,394
      
43,808
      
37,622
  
Total liabilities and capital
          
33,022
      
46,052
      
40,654
  
 

F - 2

 
Unaudited Condensed consolidated interim of Income and of Comprehensive Loss
 
         
Six months
ended June 30,
    
Six months
ended June 30,
    
Year ended
December 31,
  
         
2022
    
2021
    
2021
  
         
USD thousands,
except share data
    
USD thousands,
except share data
    
USD thousands,
except share data
  
                         
Research and development expenses
  
9
      
4,427
      
2,910
      
7,594
  
Marketing expenses
  
10
      
1,959
      
605
      
1,628
  
General and administrative expenses
  
11
      
3,687
      
4,159
      
8,010
  
Operating loss
          
10,073
      
7,674
      
17,232
  
                               
Financing income
  
12
      
(1,062
)
    
(401
)
    
(509
)
Financing expenses
          
145
      
493
      
1,299
  
Total financing (income) expenses
          
(917
)
    
92
      
790
  
                               
Loss for the period
          
9,156
      
7,766
      
18,022
  
                               
Currency translation differences loss (income) that might be transferred to profit or loss over ILS
          
2,326
      
(293
)
    
(1,942
)
Currency translation differences loss (income) that might be transferred to profit or loss over EUR
          
847
      
216
      
1,447
  
                               
Total comprehensive loss for the period
          
12,329
      
7,689
      
17,527
  
                               
Loss per ordinary share, no par value (USD)
                              
Basic and diluted loss per share (USD)
          
0.072
      
0.072
      
0.155
  
                               
Weighted-average number of shares outstanding - basic and diluted (shares)
          
126,385,924
      
107,189,837
      
115,954,501
  

 

F - 3

 

Unaudited Condensed consolidated interim of Income and of Comprehensive Loss

 
         
Three months
ended June 30,
    
Three months
ended June 30,
  
         
2022
    
2021
  
         
USD thousands,
except share data
    
USD thousands,
except share data
  
                   
Research and development expenses
  
9
      
2,285
      
1,783
  
Marketing expenses
  
10
      
908
      
285
  
General and administrative expenses
  
11
      
1,569
      
1,399
  
Operating loss
          
4,762
      
3,467
  
                       
Financing income
  
12
      
(678
)
    
(24
)
Financing expenses
          
85
      
664
  
Total financing (income) expenses
          
(593
)
    
640
  
                       
Loss for the period
          
4,169
      
4,107
  
                       
Currency translation differences loss (income) that might be transferred to profit or loss over ILS
          
1,811
      
(898
)
Currency translation differences loss (income) that might be transferred to profit or loss over EUR
          
600
      
33
  
                       
Total comprehensive loss for the period
          
6,580
      
3,242
  
                       
Loss per ordinary share, no par value (USD)
                      
Basic and diluted loss per share (USD)
          
0.033
      
0.033
  
                       
Weighted-average number of shares outstanding - basic and diluted (shares)
          
126,533,200
      
123,665,142
  

 

F - 4

 
Unaudited Condensed consolidated interim statements of changes in equity
 
   
Premium and
Capital Share
    
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, 2022
    
69,610
      
(334
)
    
14
      
1,275
      
4,028
      
(36,971
)
    
37,622
  
                                                         
Share-based payments
    
-
      
-
      
-
      
-
      
1,048
      
-
      
1,048
  
Exercise of options
    
866
       -       -       -      
(813
)
     -      
53
  
Other comprehensive income (loss)
    
-
      
-
      
-
      
(3,173
)
    
-
      
-
      
(3,173
)
Loss for the period
    
-
      
-
      
-
      
-
      
-
      
(9,156
)
    
(9,156
)
                                                         
Balance as at June 30, 2022
    
70,476
      
(334
)
    
14
      
(1,898
)
    
4,263
      
(46,127
)
    
26,394
  
                                                         
Balance as at January 1, 2021
    
30,481
      
(334
)
    
14
      
780
      
3,639
      
(18,949
)
    
15,631
  
                                                         
Share-Based Payment
     -       -       -       -      
2,313
       -      
2,313
  
Issuance of shares and warrants, net
    
30,357
       -       -       -       -       -      
30,357
  
Exercise of options
    
4,445
       -       -       -      
(1,249
)
     -      
3,196
  
Other comprehensive income (loss)
     -       -       -      
77
       -       -      
77
  
Loss for the period
     -       -       -      
-
       -      
(7,766
)
    
(7,766
)
                                                         
Balance as at June 30, 2021
    
65,283
      
(334
)
    
14
      
857
      
4,703
      
(26,715
)
    
43,808
  
                                           
Balance as at January 1, 2021
    
30,481
      
(334
)
    
14
      
780
      
3,639
      
(18,949
)
    
15,631
  
                                                         
Share-based payments
    
-
      
-
      
-
      
-
      
3,965
      
-
      
3,965
  
Issuance of shares and warrants, net
    
32,330
      
-
      
-
      
-
      
-
      
-
      
32,330
  
Exercise of options
    
6,799
       -       -       -      
(3,576
)
     -      
3,223
  
Other comprehensive income (loss)
    
-
      
-
      
-
      
495
      
-
      
-
      
495
  
Loss for the period
    
-
      
-
      
-
      
-
      
-
      
(18,022
)
    
(18,022
)
                                                         
Balance as at December 31, 2021
    
69,610
      
(334
)
    
14
      
1,275
      
4,028
      
(36,971
)
    
37,622
  

 

F - 5

 

Unaudited Condensed consolidated interim statements of cash flows
 
   
Six months
ended June 30,
2022
    
Six months
ended June 30,

2021*

    
Year ended

December 31,

2021

  
   

USD thousands

    

USD thousands

    

USD thousands

  
Cash flows - operating activities
                  
Net Loss for the period
    
(9,156
)
    
(7,766
)
    
(18,022
)
                         
Adjustments:
                        
Depreciation and amortization
    
722
      
278
      
680
  
Change in fair value of derivative
    
-
 
    
(311
 )    
(316
 )
Change in fair value of other investment
    
(80
)
    
(90
 )    
(193
 )

Changes in net foreign exchange expenses

     (982 )     485       1,279  

Expenses of interest over liability of lease

     137       1       9  
Share-based payment expenses
    
1,048
      
2,313
      
3,965
  
Changes in asset and liability items:
                        
Decrease (increase) in receivables
    
257
      
(782
)
    
(2,351
)
Increase (decrease) in trade payables
    
224
      
3
      
(97
 )
Increase (decrease) in other payables
    
382
      
821
      
1,095
  
Net cash from (used in) operating activities
    
(7,448
)
    
(5,048
)
    
(13,951
 )
                         
Cash flows - investment activities
                        
Acquisition of fixed assets
    
(2,341
)
    
(902
)
    
(1,828
)

Increase in restricted deposit

    
(20
)
    
(337
)
    
(337
 )

Loan provided

    
-
 
    
(367
 )    
(367
 )

Proceeds on account of other investment*

     73       73       149  

Acquisition of other investments, net of cash acquired

    
(188
 )    
(4,848
)
    
(6,808

)

 

                        
Net cash used in investing activities
    
(2,476
)
    
(6,381
)
    
(9,191
)
                         
Cash flows - financing activities
                        
Proceeds from issuance of shares and warrants
    
-
      
29,281
      
29,281
  
Issuance costs
    
-
 
    
(3,283
)
    
(3,283
 )
Repayment of liability for lease
    
(230
)
    
(134
)
    
(346
 )

Repayment of interest over liability of lease

    
(137
 )    
(1
 )    
(9
 )
Proceeds from exercise of share options
    
53
      
3,196
      
3,222
  
                         
Net cash from financing activities
    
(314
 )    
29,059
      
28,865
  
                         
Increase in cash and cash equivalents
    
(10,238
 )    
17,630
      
5,723
  
Effect of exchange differences on cash and cash equivalents
    
(504
 )    
(549

)

    
(103

)
Cash and cash equivalents at the beginning of the period:
    
19,176
      
13,556
      
13,556
  
                         
Cash balance and cash equivalents at end of period
    
8,434
      
30,637
      
19,176
  
                         
Non-cash activities
                        

Purchase of fixed assets yet to be paid    

    
237
      
21
      
57
  
Issue of shares and options against intangible asset
    
-
      
4,359
      
6,332
  

 

*Reclassified

 

F - 6

 
Note 1 – General
 

Steakholder Foods Ltd. (formerly Ophectra Real Estate and Investments Ltd., Meat-Tech 3D Ltd. and MeaTech 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 (TASE). In March 2021, the Company completed an initial public offering on the Nasdaq Capital Market, listing American Depositary Shares (ADSs) for trade under the ticker STKH, and later voluntarily de-listed its ordinary shares from the TASE. The Company’s official address is 5 David Fikes St., Rehovot, Israel. In August 2022, the Company changed its name from MeaTech 3D Ltd. to Steakholder Foods Ltd.

 

The Company’s foodtech activities 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 Steakholder Innovation Ltd. As 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., the transaction was treated as a reverse acquisition that does not constitute a business combination. 

 

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. 

 

Since inception the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of USD 46.1 million. The Company has financed its operations mainly through fundraising from various investors.    

 

The Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flows and cash balances as of June 30, 2022, management is of the opinion that its existing cash will be sufficient to fund operations until Q2 2023. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.


Management’s plans include the continue securing sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships. Additional funds may not be available when the Company needs them on terms that are acceptable to it, or at all. If the Company is unsuccessful securing sufficient financing, it may need to cease operations.


The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.

 

Definitions:
 

In these financial statements:

 

 

(1)

The Company - Steakholder Foods Ltd.
     

 

(2)

The Group – The Company and its subsidiaries, Steakholder Innovation Ltd. (formerly known as MeaTech Ltd.), Steakholder Foods Europe BV, Peace of Meat BV (hereafter “Peace Of Meat”) and Steakholder Foods USA, Inc.
     

 

(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
     
  (8)

GBP - British pound sterling

 

F - 7

 

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.
 
The interim condensed consolidated financial statements were approved by the Company’s Board of Directors on August 24, 2022.
 
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 of the year 2021.

 

  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 New Israeli Shekel ("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 the Currency translation differences reserve.
 
Currency
  
USD - ILS
    
USD - EUR
  
   
2022
    
2021
    
2022
    
2021
  
June 30
    
3.500
      
3.260
      
0.962
      
0.841
  
Average for six months ended June 30
    
3.272
      
3.265
      
0.915
      
0.830
  
Average for three months ended June 30
    
3.341
      
3.265
      
0.938
      
0.830
  
December 31
    
-
      
3.110
      
-
      
0.883
  
Average for twelve months ended December 31
    
-
      
3.230
      
-
      
0.845
  

 

Note 3 – Material Events in the reporting period

 

In January 2022, Messrs. Steven Lavin, Daniel Ayalon, Sharon Fima and Omri Schanin stepped down as directors of the Company, and Mr. Fima also resigned as Chief Executive Officer and Chief Technology Officer. At that time, Mr. Yaron Kaiser was appointed to the Board as its Chairman, and Mr. Arik Kaufman was appointed as the Company’s Chief Executive Officer. In April 2022, Mr. Schanin resigned as Deputy Chief Executive Officer.

 

In March 2022, the Company’s headquarters were relocated to new, more spacious premises with state-of-the-art laboratories in Rehovot, Israel. The new space, allows the Company to enhance its cultured meat research and development, including three-dimensional bioprinting technology, and to continue growing its biology and engineering teams.

 

For more information, see Note 15.

 

F - 8

 

Note 4 – Cash and Cash Equivalents
 
   

June 30

    

June 30

    

December 31

  
   

2022

    
2021
    
2021
  
   

USD thousands

    
USD thousands
    
USD thousands
  
                         
Cash in USD
     4,260      
22,756
      
15,596
  
Cash in NIS
     3,059      
6,225
      
1,688
  
Cash in Euro
     1,110      
1,656
      
1,892
  
Cash in GBP     5       -       -  
Total cash and cash equivalents
     8,434      
30,637
      
19,176
  

 

Note 5 – Receivables 
 
    June 30    

June 30

    

December 31

  
    2022    
2021
    
2021
  
   

USD thousands

    
USD thousands
    
USD thousands
  
                 
Institutions
     320      
548
      
301
  
Prepaid expenses
     854      
605
      
743
  
Other
     1,063      
21
      
1,738
  
      2,237      
1,174
      
2,782
  

 

Note 6 – Other Payables

 

 

  

June 30

    

June 30

    

December 31

  

 

  

2022

    

2021

    

2021

  

 

  

USD thousands

    

USD thousands

    

USD thousands

  

 

    

 

      

 

      

 

  

Accrued expenses

   

626

      

513

      

459

  

Employee benefits

    

1,081

      

532

      

1,122

  

Provision - see note 13 (a)

    

200

      

217

      

217

  

Subsidiary government grant advances

    

252

      

311

      

218

  

Others

    

15

      

-

      

223

  

 

    

2,174

      

1,573

      

2,239

  

 

F - 9

 

Note 7 – Capital and Reserves
 
   

Thousands of

Ordinary

Shares

  
   

June 30, 2022

  
         

Issued and paid-in share capital as at the beginning of the period

    

125,770

  
Exercise of share options during the period – Share-Based Payment-related
    
589
  

Issued not - for cash during the period*

    

176

  

Issued and paid-in share capital as at June 30

    
126,535
  
         
Authorized share capital
    
1,000,000
  

 

*Allocated to POM founders as part of original SPA

 

Note 8 – Share-based payments

 

New allotments during the six-month period ended June 30, 2022 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 CEO and Chairman on March 15, 2022
  
Options exercisable for ordinary shares
 
850
  
12 quarterly tranches
  
4 years
                 
Options awarded to employees of the Company and subsidiaries on March 24, 2022
  
Options exercisable for ordinary shares 
  
775
  
1/3 after one year and the balance in 8 quarterly tranches
  
4 years
                 
Options awarded to employees of the Company on June 10, 2022
  
Options exercisable for ordinary shares
 
2,180
  
1/3 after one year and the balance in 8 quarterly tranches
  
4 years
                 
Total options exercisable into shares
      
3,805
        
 

F - 10

 

Note 8 – Share-based payments (Cont.) 
 
The fair value at the dates the options 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
  
Fair value at date awarded
  
USD 1,107 thousand
  
 
      
Parameters taken into account in the fair value calculation:
      
Share price (USD at date awarded)
  
0.43-0.51
  
Exercise price (USD unlinked)
  
0.40-0.52
  
Expected volatility (weighted average)
  
94.87%-100.74%
  

Contractual term

  
4 years
  
Risk-free interest rate
  
2.03%-3.24%
  
Expected rate of dividend
  
0%
  
 

The expected volatility (standard deviation) was determined on the basis of share price volatility in similar companies, due to the Company’s limited historic share price performance since the date of the merger in January 2020 described in Note 1A above. The estimated Contractual Term of the options is the full contractual life of the option. The risk-free interest rate was based on US bonds, with time to maturity equivalent to the expected useful life of the options. Share price was used according to quoted share prices on Nasdaq.

 
The total expense over the six and three months ended June 30, 2022, amounted to approximately USD 1.0 million (NIS 3.4 million) and USD 0.3 million (NIS 1.0 million), respectively.

 

F - 11

 

Note 9 – Research and Development Expenses

 

   

Six months

ended June 30,

    

Six months

ended June 30,

    

Year ended
December 31,

  
   
2022
    
2021
    
2021
  
   
USD thousands
    
USD thousands
    
USD thousands
  
                   
Salaries, wages and related expenses(1)
    
2,356
      
1,354
      
3,425
  
Share-based payment(1)
    
218
      
463
      
911
  
Materials
    
689
      
514
      
1,875
  
Professional services
    
315
      
132
      
403
  
Maintenance, office and software fees
    
197
      
79
      
145
  
Depreciation and amortization
    
468
      
174
      
400
  
D&O insurance     112       119       332  
Others
    
72
      
75
      
103
  

Total Research and Development Expenses

    
4,427
      
2,910
      
7,594
  

 

(1)          Including expenses in respect of related parties - see Note 14.

 

   

Three months

ended June 30,

    

Three months

ended June 30,

  
   
2022
    
2021
  
   
USD thousands
    
USD thousands
  
             
Salaries, wages and related expenses(1)
    
1,206
      
830
  
Share-based payment(1)
    
193
      
200
  
Materials
    
295
      
342
  
Professional services
    
190
      
86
  
Maintenance, office and software fees
    
78
      
42
  
Depreciation and amortization
    
250
      
149
  
D&O insurance     32       66  
Others
    
41
      
68
  

Total Research and Development Expenses

    
2,285
      
1,783
  
 
(1)          Including expenses in respect of related parties - see Note 14.

 

F - 12

 

Note 10 – Marketing Expenses
 
   
Six months 
ended June 30,
    
Six months 
ended June 30,
    

Year ended
December 31,

  
   
2022
    
2021
    
2021
  
   
USD thousands
    
USD thousands
    
USD thousands
  
                   
Salaries, wages and related expenses(1)
    
445
      
243
      
494
  

Share-based payment(1)

    
528
      
76
      
570
  
PR and advertisement
    
817
      
269
      
507
  
Maintenance, office and software fees
    
41
      
7
      
22
  
Depreciation and amortization
    
54
      
5
      
17
  

D&O insurance

     43       0       -  
Others
    
31
      
5
      
18
  

Total Marketing Expenses

    
1,959
      
605
      
1,628
  

 

(1)          Including expenses in respect of related parties - see Note 14.

 

   
Three months 
ended June 30,
    
Three months 
ended June 30,
  
   
2022
    
2021
  
   
USD thousands
    
USD thousands
  
             
Salaries, wages and related expenses(1)
    
235
      
120
  

Share-based payment(1)

    
71
      
27
  
PR and advertisement
    
523
      
127
  
Maintenance, office and software fees
    
14
      
3
  
Depreciation and amortization
    
23
      
7
  

D&O insurance

     18       -  
Others
    
24
      
1
  

Total Marketing Expenses

    
908
      
285
  

 

(1)          Including expenses in respect of related parties - see Note 14.

 

F - 13

 

Note 11 – General and Administrative Expenses

 

   
Six months 
ended June 30,
    
Six months 
ended June 30,
    
Year ended
December 31,
  
   
2022
    
2021
    
2021
  
   
USD thousands
    
USD thousands
    
USD thousands
  
                   
Salaries, wages and related expenses(1)
    
969
      
556
      
1,328
  
Share-based payment(1)
    
302
      
1,774
      
2,484
  
Legal and professional services(1)
    
1,096
      
739
      
1,499
  

D&O insurance

    

665

      

680

      

1,837

  
Corporate costs
    
111
      
227
      
343
  
Maintenance, office and software fees
    
172
      
54
      
149
  
Depreciation and amortization
    
190
      
97
      
263
  
Others
    
182
      
32
      
107
  

Total General and Administrative Expenses

    
3,687
      
4,159
      
8,010
  
 

(1)          Including expenses in respect of related parties - see Note 14.

            
             
   

Three months 

ended June 30,

    

Three months

ended June 30,

  
   
2022
    
2021
  
   
USD thousands
    
USD thousands
  
             
Salaries, wages and related expenses(1)
    
494
      
227
  
Share-based payment(1)
    
75
      
208
  
Legal and professional services(1)
    
469
      
155
  
D&O insurance
     203       565  
Corporate costs
    
64
      
135
  
Maintenance, office and software fees
    
79
      
20
  
Depreciation and amortization
    
88
      
78
  
Others
    
97
      
11
  

Total General and Administrative Expenses

    
1,569
      
1,399
  

 

(1)        Including expenses in respect of related parties - see Note 14.

 

F - 14

 

Note 12 – Financing Income and Expenses
 
   
Six months 
ended June 30,
    
Six months 
ended June 30,
    
Year ended
December 31,
  
   
2022
    
2021
    
2021
  
   

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
    
80
      
401
      
509
  

Net foreign exchange income

     982       -       -  

Total Financial Income

     1,062       401       509  
                         
Financial Expenses
            
 
      
 
  
Net foreign exchange loss
    
-
      
485
      
1,279
  
Interest expense on lease liabilities
    
137
      
1
      
9
  
Bank interest and commission expenses
    
8
      
7
      
11
  
Total Financial Expenses
    
145
      
493
      
1,299
  
                     
 
  
Net financing expenses (income) recognized in profit or loss
    
(917
)
    
92
      
790
  
             
   
Three months 
ended June 30,
    
Three months 
ended June 30,
  
   
2022
    
2021
  
   

USD thousands 

    

USD thousands 

  
Financial Income
            
Net change in fair value of financial instruments mandatorily measured at fair value through profit or loss(1)
    
36
      
24
  

Net foreign exchange income

     642       -  

Total Financial Income

     678       24  
                 
Financial Expenses
            
 
  
Net foreign exchange loss
    
-
      

659

  
Interest expense on lease liabilities
    
81
      
-
  
Bank interest and commission expenses
    
4
      
5
  
Total Financial Expenses
    
85
      
664
  
                 
Net financing expenses (income) recognized in profit or loss
    
(593
)
    
640
  

 

F - 15

 

Note 13 – 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.
 
 
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. Similar proceedings were initiated with several other companies where the verdict, as of now, is that the companies are not to be held liable to the claims. There for, the Company initiated procedures to try and reclaim its innocence. As of now, due to lack of certainty, the Company keeps its provision stated above.
 
 
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 $0.7 million (NIS 2.5 million). The Company believes that it is more likely than not that no final ruling will be decided against the settlement fund.

 

F - 16

 

Note 14 – Related and Interested Parties
 
 
Balances with related parties
 
   

Six months 

ended

    

Six months

ended

    

Year ended

 
   

June 30,

    

June 30,

    

December 31,

  
   
2022
    
2021
    

2021

  
   
USD thousands
    
USD thousands
    

USD thousands

  
                   
Trade and other payables
    
165
      
106
       261  

 
 
Expense amounts with respect to related parties
 
   

Period ended

June 30,

    

Period ended

June 30,

    
Year ended
December 31,
  
   
2022
    
2021
    
2021
  
   
USD thousands
    
USD thousands
    
USD thousands
  
General and administrative expenses
                  
Salaries, wages and related expenses
    
307
      
242
      
588
  
Legal and professional services
    
222
      
135
      
301
  
Share-based payments
    
375
      
309
      
777
  
                         
Sales and Marketing expenses                        
Salaries, wages and related expenses      52       -       -  
Professional services     17       -       -  
Share-based payments     185       -       -  
                         

Research & Development expenses

                        

Salaries, wages and related

     133       138       338  

Share-based payments

     10       41       66  

  

 
Key Management Personnel
 

The Company recognizes three key management personnel as related parties, namely Mr. Arik Kaufman – Chief Executive Officer (CEO), Mr. Guy Hefer – Chief Financial Officer (CFO) and Mr. Dan Kozlovski – Chief Technologies Officer (CTO), who served as Vice President of Research and Development (VP R&D) until February 2022. In addition, Mr. Omri Schanin served as Deputy Chief Executive Officer until April 2022.

 

The CEO has been employed by the Company since January 24, 2022. He previously served as a director until May 2020 (including as interim chairman from March 2020) and a consultant of the Company until his appointment as CEO. Mr. Kaufman is entitled to a gross annual salary of NIS 0.6 million (USD 0.2 million), an annual bonus based primarily on milestone achievement, generally accepted social benefit contributions for senior executives and domestic travel expenses. Mr. Kaufman has also received options valued at an aggregate of NIS 0.46 million (USD 0.14 million) to be recognized over a three-year vesting period commencing in 2022.

 

F - 17

 

Note 14 – Related and Interested Parties (Cont.)

 

 
Mr. Kaufman is a founding partner of BlueOcean Sustainability Fund, LLC, a Delaware LLC doing business as BlueSoundWaves, led by Ashton Kutcher, Guy Oseary and Effie Epstein, which provides the Company with marketing and promotional, consulting, and partner and investor engagement services in the U.S., in return for which BlueSoundWaves received warrants to purchase ordinary shares, as well as restricted share units, the expenses for which are recognized as share-based payments.

 

The previous CEO and CTO, who also served as a director, Mr. Sharon Fima, was employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) between September 1, 2019 and January 24, 2022. Mr. Fima was entitled to an annual gross salary of NIS 0.6 million (USD 0.2 million). Mr. Fima also received options valued at NIS 0.2 million (USD 0.1 million) to be recognized over three-year vesting period commencing March 2020, some of which were forfeited upon his resignation.

 

The former Deputy CEO, Mr. Omri Schanin, who also served as a director until January 2022, has been employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) since September 1, 2019. Following his notice of resignation, he no longer serves as Deputy CEO, and his resignation took effect on May 31, 2022. Mr. Schanin was entitled to an annual gross salary of NIS 0.5 million (USD 0.2 million). 

 

The CFO has been employed by the Company since October 18, 2020. Mr. Hefer is entitled to an annual gross salary of NIS 0.5 million (USD 0.2 million). Mr. Hefer has also received options valued at an aggregate of NIS 0.75 million (USD 0.23 million) to be recognized over three-year vesting periods commencing in 2021.

 

The CTO (previously VP R&D), has been employed by the Company (including MeaTech Ltd. prior to the merger described in Note 1A above) since December 5, 2019. Mr. Kozlovski is entitled to an annual gross salary of NIS 0.5 million (USD 0.2 million). Mr. Kozlovski has also received options valued at of NIS 0.07 million (USD 0.02 million) to be recognized over three-year vesting period commencing in 2019.

 

 
Directors

 

Mr. Steve H. Lavin served as active chairman of the Company's Board of Directors between May 2020 and January 2022, and he was entitled to an annual compensation of USD 0.2 million as well as share-based compensation.

 

Mr. Yaron Kaiser has served as chairman of the Company’s Board of Directors since January 2022. He previously served as legal counsel to the Company and as a consultant until his appointment as Chairman. Mr. Kaiser is entitled to annual compensation of USD 0.15 million, an annual bonus equal to half the bonus awarded to the CEO, and re-imbursement of travel expenses. Mr. Kaiser is a founding partner of BlueSoundWaves, as described above.

 

F - 18

 

Note 14 – Related and Interested Parties (Cont.)

 

Mr. Danny Ayalon served as director between May 2020 and January 2022, and was entitled to annual compensation of USD 0.03 million as well as share-based compensation.

 

Additional non-executive directors are since entitled to annual compensation of USD 0.03 million for their service on the Board of Directors and USD 0.005 million for service on each Board committee, as well as share-based compensation.

 

Note 15 – Leases
 
 

Leases in which the Group is the lessee
 
  1.
Under the office leasing agreement dated May 18, 2021, the Company leased office space and parking spaces, for a monthly fee of USD 51 thousand (NIS 178 thousand) linked to the CPI, including management fees and insurance, for a period of 4 years, with an option to extend the term of the lease by an additional term of 4 years. On February 2022, after receiving the facilities, the Company initially recognized a long-term lease liability and a right-of-use asset in the amount of USD 3,625 thousand (NIS 12,687 thousand). The incremental interest rate used for estimating the liability is 8.77%.

 

   

As part of leasing these new facilities the company decided to terminate its previous leasing agreements in Israel.

 

  2.
Right-of-Use Asset
 
   
USD thousands
  
Balance as at January 1, 2020
    
168
  
Additions following the acquisition of POM     16  
Additions during the year
    
512
  
Amortization during the year
    
(286
)
Effect of changes in exchange rates     (3 )
Balance as at December 31, 2021
    
407
  
Additions during the year
    
4,127
  

Terminations during the year

     (239 )
Amortization during the year
    
(281
)
Effect of changes in exchange rates
    
(402

)
Balance as at June 30, 2022
    
3,612
  

  

F - 19

 

Note 15 – Leases (cont.)

 

  3.
Maturity analysis of for the Company’s lease liabilities
 
   
June 30,
    

June 30,

    
December 31,
  
   
2022
     2021    
2021
  
   
USD thousands
    

USD thousands

    
USD thousands
  
                   
Up to one year
    
428
       210      
165
  

1-8 years

    
3,247
       102      
246
  
Total
    
3,675
       312      
411
  
 
  4.
Amounts recognized in the statement of operation
 
   

Six months 

ended June 30,

    

Six months 

ended June 30,

    
Year ended
December 31,
  
   
2022
     2021    
2021
  
   
USD thousands
    

USD thousands

    
USD thousands
  
                   
Amortization of ROU asset
    
281
       131      
286
  
Interest expenses on lease liability
    
137
       1      
9
  
 
Total amounts paid for leasing of the offices in the period ended June 30, 2022 and  December 31, 2021, was USD 367 thousand and USD 355 thousand, respectively.

Note 16 – Subsequent Event

On July 5, 2022, the Company consummated a securities purchase agreement with a single U.S. institutional investor for the purchase and sale of 600,000 American Depositary Shares (“ADSs”), each representing ten (10) ordinary shares of no par value, at a price of $3.50 per ADS, pre-funded warrants to purchase 1,257,143 ADSs at a price of $3.4999 (that were already paid) with an exercise price of $0.0001 per ADS to be paid once exercised, and warrants to purchase 1,857,143 ADSs for five years with an exercise price of $3.50 per ADS. The securities were offered in the framework of a registered direct offering. The gross proceeds were approximately $6.5 million, and the net proceeds were approximately $5.8 million.
F - 20