Cellect Biotechnology Reports Second Quarter 2019 Financial and Operating Results

TEL AVIV, Israel, Aug. 13, 2019 /PRNewswire/ -- Cellect Biotechnology Ltd. (NASDAQ: APOP), a developer of innovative technology which enables the functional selection of stem cells, today reported financial and operating results for the second quarter ended June 30, 2019 and provided a corporate update.

"We are making solid clinical progress in Israel and we are optimistic as we move closer to commencing our first clinical trial in the U.S.," commented Dr. Shai Yarkoni, Chief Executive Officer. "In Israel, we successfully transplanted the 9(th) patient earlier this quarter and we received the independent safety board approval to escalate to the final dose. We are optimistic that we will complete the final cohort later this year."

"In the U.S., the signing of the Accelerated Clinical Trial Agreement with Washington University and the approval of the WU scientific committee were significant achievements, and upon obtaining the regulatory approvals, and subject to sufficient funding and the outcome of the strategic review process, we plan to ramp up our activities later this year and begin enrolling patients in the first half of 2020."

Strategic Review Progress Update

In May 2019, the Company commenced plans to explore strategic alternatives to maximize shareholder value. Potential strategic alternatives that may be evaluated include, but are not limited to, an acquisition, merger, business combination, in-licensing, or other strategic transaction involving the Company or its assets. The Company continues to evaluate strategic opportunities and plans to keep shareholders informed as they mature or warrant disclosure.

Complementing the strategic review, the Company initiated a cost reduction plan, including a reduction in workforce, lowering its quarterly cash usage to advance its ongoing clinical trial in Israel and work towards initiating the clinical trial in the United States. The Company's cash and cash equivalents were $7.64 million as of June 30, 2019.

"On the corporate side, our actions have significantly reduced our monthly cash burn and we believe that based on our current anticipated cash needs, our current cash burn rate gives us over 18 months of cash, sufficient to achieve our primary objective of reaching clinical results," said Eyal Leibovitz, Chief Financial Officer.

Second Quarter 2019 Financial Results:

    --  Research and development (R&D) expenses for the second quarter of 2019
        were $0.99 million compared to $0.99 million in the first quarter of
        2019 and to $0.69 million in the second quarter of 2018. There was no
        difference between the first and second quarters of 2019. In the first
        quarter of 2019, we incurred expenses related to the establishment of
        our US clinical site while in the second quarter we incurred further
        expenses related to our current clinical activity.
    --  General and administrative (G&A) expenses for the second quarter of 2019
        were $0.76 million compared to $0.66 million in the first quarter of
        2019 and to $1.01 million in the second quarter of 2018. The increase
        was mainly due to an increase in stock-based compensation.
    --  Finance income for the second quarter of 2019 was $1.53 million compared
        to finance income of $0.22 million in the first quarter of 2019 and to
        $0.03 million in the second quarter of 2018. The increase was primarily
        due to changes related to fair value of the tradable and non-tradable
        warrants issued in prior fundraisings.
    --  Net loss for the second quarter of 2019 was $0.23 million, or $0.001 per
        share and $0.02 per ADS, compared to $1.43 million, or $0.008 per share
        and $0.16 per ADS, in the first quarter of 2019 and to $1.64 million, or
        $0.013 per share and $0.26 per ADS, in the second quarter of 2018.

* For the convenience of the reader, the amounts above have been translated from NIS into U.S. dollars, at the representative rate of exchange on June 30, 2019 (U.S. $1 = NIS 3.566).

About Cellect Biotechnology Ltd.

Cellect Biotechnology (APOP) has developed a breakthrough technology, for the selection of stem cells from any given tissue, that aims to improve a variety of stem cell-based therapies.

The Company's technology is expected to provide researchers, clinical community and pharma companies with the tools to rapidly isolate stem cells in quantity and quality allowing stem cell-based treatments and procedures in a wide variety of applications in regenerative medicine. The Company's current clinical trial is aimed at bone marrow transplantations in cancer treatment.

Forward Looking Statements

This press release contains forward-looking statements about the Company's expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. For example, forward-looking statements are used in this press release when we discuss Cellect's expectations regarding its clinical trials and cash position. These forward-looking statements and their implications are based on the current expectations of the management of the Company only and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition, historical results or conclusions from scientific research and clinical studies do not guarantee that future results would suggest similar conclusions or that historical results referred to herein would be interpreted similarly in light of additional research or otherwise. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the Company's history of losses and needs for additional capital to fund its operations and its inability to obtain additional capital on acceptable terms, or at all; the Company's ability to continue as a going concern; uncertainties of cash flows and inability to meet working capital needs; the Company's ability to consummate a strategic alternative that enhances shareholder value; the Company's ability to remain listed on the Nasdaq Capital Market; the Company's ability to obtain regulatory approvals; the Company's ability to obtain favorable pre-clinical and clinical trial results; the Company's technology may not be validated and its methods may not be accepted by the scientific community; difficulties enrolling patients in the Company's clinical trials; the ability to timely source adequate supply of FasL; risks resulting from unforeseen side effects; the Company's ability to establish and maintain strategic partnerships and other corporate collaborations; the scope of protection the Company is able to establish and maintain for intellectual property rights and its ability to operate its business without infringing the intellectual property rights of others; competitive companies, technologies and the Company's industry; unforeseen scientific difficulties may develop with the Company's technology; and the Company's ability to retain or attract key employees whose knowledge is essential to the development of its products. Any forward-looking statement in this press release speaks only as of the date of this press release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in Cellect Biotechnology Ltd.'s Annual Report on Form 20-F for the fiscal year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission, or SEC, which is available on the SEC's website, www.sec.gov, and in the Company's periodic filings with the SEC.

            Cellect Biotechnology Ltd

            Consolidated Statement of Operation



         Six months                                    Six months ended      Three months ended


         June 30,                     
              June 30,      
          June 30,

                                                                           2019                                              2019                     2018        2019        2018


         U.S. dollars                          

              (In thousands, except share and per

              share data)

         Research and development expenses                               1,987                                             7,086                    5,348       3,564       2,491

         General and administrative expenses                             1,420                                             5,064                    7,072       2,709       3,620

         Operating loss                                                  3,407                                            12,150                   12,420       6,273       6,111

         Financial expenses (income) due to                            (1,994)                                          (7,111)                 (1,615)    (5,919)        609
      warrants exercisable into shares

         Other financial expenses (income), net                            247                                               880                  (1,241)        462       (731)

         Total comprehensive loss                                        1,660                                             5,919                    9,564         816       5,989

         Loss per share:

         Basic and diluted loss per share                                0.008                                             0.029                    0.074       0.004       0.046

         Basic and diluted loss per ADS                                   0.17                                              0.58                     1.48        0.08        0.92

         Weighted average number of shares                         200,942,871                                       200,942,871              128,600,812 224,087,799 130,192,799
            outstanding used to compute basic and
      diluted loss per share

          Cellect Biotechnology Ltd.

         Consolidated Balance Sheet Data




           June 30,                            June 30,   December 31,

                                                                                                                                          2019                                2019           2018

           Unaudited                           Unaudited     Audited

           U.S. dollars                 

                                                                                                                                  (In thousands, except share and per

           share data)

           CURRENT ASSETS:

           Cash and cash equivalents                                                                                                    7,640                              27,244         17,809

           Other receivables                                                                                                              193                                 690            816

                                                                                                                                         7,833                              27,934         18,625


           Restricted cash                                                                                                                 93                                 331            337

           Right-of-use assets                                                                                                            364                               1,299

           Other long-term receivables                                                                                                     32                                 113            132

           Property, plant and equipment, net                                                                                             413                               1,472          1,544

                                                                                                                                           902                               3,215          2,013

                                                                                                                                         8,735                              31,149         20,638

                LIABILITIES AND

                SHAREHOLDERS' EQUITY


           Trade payables                                                                                                                 279                                 994            887

           Other payables                                                                                                                 894                               3,190          4,012

           Current maturities of lease liability                                                                                          131                                 468

                                                                                                                                         1,304                               4,652          4,899


           Warrants                                                                                                                     1,044                               3,722          1,816

           Lease liability                                                                                                                243                                 867

                                                                                                                                         1,287                               4,589          1,816


           Ordinary shares of no par value:                                                                                                 -
              Authorized: 500,000,000 shares at December 31, 2018
      and June 30, 2019; Issued and outstanding:
      130,414,799*) and  224,087,799*) shares as of
      December 31, 2018 and June 30, 2019, respectively.

              Additional Paid in Capital                                                                                               30,371                             108,305         95,085

             Share-based payments                                                                                                       3,647                              13,003         12,319

              Treasury shares                                                                                                         (2,643)                            (9,425)       (9,425)

              Accumulated deficit                                                                                                    (25,231)                           (89,975)      (84,056)

                                                                                                                                         6,144                              21,908         13,923

                                                                                                                                         8,735                              31,149         20,638

           *)         Net of 2,641,693 treasury shares of the Company held by the Company.

              Cellect Biotechnology Ltd

              Consolidated Cash Flow Data



            Six months                            Six months ended   Three months ended


            June 30,                                 June 30,            June 30,

                                                                                                       2019                                        2019                  2018       2019        2018


            U.S. dollars               

                (In thousands)

                  Cash flows from operating activities:


             Total comprehensive loss                                                              (1,660)                                    (5,919)              (9,564)     (816)    (5,989)

             Adjustments to reconcile net loss to net
        cash used in operating activities:

             Net financing expenses                                                                    229                                         815                 (837)       443       (314)

             Loss (gain) from revaluation of financial                                                   2                                           6                 (148)         2       (148)
        assets presented at fair value through
        profit and loss

             Depreciation                                                                               54                                         192                   215         94         110

             Changes in fair value of traded and not                                               (2,368)                                    (8,442)              (1,888)   (5,895)        608
        traded warrants

             Share-based payment                                                                       148                                         529                 2,184        744         937

             Decrease (increase) in other receivables                                                   40                                         145                  (87)        75       (150)

             Increase (decrease) in other payables                                                   (201)                                      (715)              (1,115)     (730)      (204)

             Decrease in right-of-use assets                                                            89                                         314                             200

             Interest received during the period                                                      (13)                                       (46)                 (15)      (46)       (15)

                Net cash used in operating activities                                    (3,680)                                   (13,121)             (11,255)   (5,929)    (5,165)

                  Cash flows from investing activities:


             Short term deposits, net                                                                                                                              (3,503)              (3,503)

             Restricted deposit, net                                                                                                                                  (28)                  135

             Sales of marketable securities measured at                                                                                                              8,498                 3,998
        fair value through profit and loss

             Purchase of property, plant and equipment                                                (34)                                      (120)                (228)                 (88)

                Net cash provided by investing activities                                   (34)                                      (120)                4,739                   542

                  Cash flows from financing activities:


             Exercise of warrants and stock options into                                                                                                               399

             Leases liabilities                                                                       (77)                                      (278)                          (178)

             Issue of share capital and warrants, net of                                             6,653                                      23,723                12,360    (1,114)        (5)
        issue costs

                Net cash provided (used) by financing                                      6,576                                      23,445                12,759    (1,292)        (5)

             Exchange differences on balances of cash                                                (216)                                      (769)                  852      (397)        329
        and cash equivalents

             Increase (decrease) in cash and cash                                                    2,646                                       9,435                 7,095    (7,618)    (4,299)

             Balance of cash and cash equivalents at the                                             4,994                                      17,809                13,734     34,862      25,128
        beginning of the period

                Balance of cash and cash equivalents at                                    7,640                                      27,244                20,829     27,244      20,829
        the end of the period


Cellect Biotechnology Ltd.
Eyal Leibovitz, Chief Financial Officer


Michael Polyviou
(732) 933-2754

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SOURCE Cellect Biotechnology Ltd.