Yasir Abdul: The Mysterious Buyer of Meati’s Fungi-Fueled Alt Meat Business

Yasir Abdul, the executive behind the infomercial company InvenTel, has emerged as the potential buyer for the fungi-based alternative meat company Meati. This acquisition transition is being facilitated through a vehicle called Meati Holdings, with assistance from Ryan Bethencourt, CEO of Wild Earth and an early-stage investor in alternative proteins.

Bethencourt, whose company Wild Earth was acquired out of bankruptcy by InvenTel, informed AgFunderNews that negotiations between Meati, its main secured creditor Trinity Capital, and prospective buyer Meati Holdings have recently taken place. The proposed deal, however, remains pending court approval, with additional interest from plant protein brand LiveComplete.

“Yasir Abdul is involved personally, so InvenTel is not part of the deal. However, he’s in talks with other investors for additional capital,” Bethencourt stated. “I’m on the transition team supporting Meati to ensure operations continue smoothly and that both customers and employees are cared for.”

“The plant is operational, and we are working to align expenses to provide lower-cost products in the future. Right now, Meati’s pricing is considered ultra-premium, and we hope to make it more competitive,” he added.

The ABC Process: Navigating Financial Challenges

Based in Colorado, Meati has been facing significant financial challenges since February when lender Trinity Capital seized two-thirds of its available funds due to a technical default.

Meati, known for its fungi-based cutlets and steaks available in thousands of US stores, issued a WARN notice on March 7, indicating that production would halt on May 6 unless new funds could be secured, putting 150 employees at risk of termination.

Despite some key personnel changes, including the recent departure of CEO Phil Graves, the company continues to operate as it navigates the Assignment for the Benefit of Creditors (ABC) process—an alternative to bankruptcy.

Pending Court Approval for the Deal

Meati, operating under Emergy Inc, filed an ABC agreement with the Adams County District Court on May 2.

This ABC process allows a financially struggling business to transfer assets to a third-party fiduciary—an attorney named Aaron Garber in this case—who oversees the sale of assets or conducts the business under the best interests of its creditors.

According to court filings mentioned by BusinessDen, Meati claimed to hold $158 million in assets. This figure significantly surpasses the $4 million valuation noted last month, highlighting a disparity between asset value and liquidation potential, as remarked by Bethencourt. He also mentioned that the $4 million price tag may not be accurate.

“Many aspects of this deal are confidential due to ongoing legal proceedings. Our immediate goal is to stabilize Meati. While other parties expressed interest, Meati Holdings was chosen by Trinity Capital for managerial support during the ABC process with the trustee,” Bethencourt explained.

Finding Pathways to Profitability

“Our goal is to break even; however, this will require multiple strategies rather than a single solution,” Bethencourt mentioned regarding profitability concerns for Meati.

On whether the company had lost significant retail distribution amid turmoil, he noted, “Unexpectedly little distribution has been lost, and the sales and marketing teams remain intact. Yasir believes in the product and sees great potential, particularly in upscale grocery stores.”

Industry insiders have voiced concerns regarding Meati’s financial health, indicating that the Thornton, Colorado plant operates at considerable losses, reportedly in the seven-figure range monthly. Several factors contribute to these losses, including fermentation costs related to strains, media, and downstream operations.

Despite these challenges, some experts remain optimistic. “The ability to create mycelium in bioreactors at competitive food prices has been demonstrated, albeit with extensive R&D,” noted one source.

The Crisis Unfolds: A Technical Default

The financial crisis for Meati escalated earlier this year when the company breached a technical default linked to revenue and gross profit, despite being current on all payments. A source revealed that the lender assured company officials in late January that cash would not be seized unless fraud was suspected.

The sudden cash sweep caused considerable alarm, especially since Meati had anticipated obtaining term sheets shortly thereafter. “In my career, I have never witnessed a lender take such drastic action over a technical default without proper discussion. It was a gut-wrenching experience,” said the source.

While recent rounds of layoffs had previously raised concerns, Meati’s staff had remained optimistic about the company’s trajectory, buoyed by improving retail distribution and revenue growth. The abrupt cash sweep was unexpected and disheartening for many employees.

With over $365 million in funding from esteemed investors like Grosvenor Food & AgTech and Prelude Ventures, Meati has undergone several workforce reductions to streamline operations and enhance profitability potential. However, former CEO Phil Graves expressed confidence in the company’s direction earlier this year, noting a new line of breakfast patties launched successfully during a period of declining sales for meat alternatives.

Meati’s strategy seeks to capitalize on consumer demand for minimally processed products with fewer ingredients, navigating the complexities of a challenging market.