Cellect Biotechnology Reports Second Quarter Financial and Operating Results; First Half 2020 Strategic Developments Create Long-Term Revenue Catalysts

TEL AVIV, Israel, Aug. 12, 2020 /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, 2020. The Company's six-month progress includes the development of several strategic initiatives, including growth-oriented opportunities in pain management and COVID-19 related therapeutics.

"Despite the COVID-19 pandemic business disruptions and the near-term delays to completing and commencing our clinical programs in Israel and the U.S., respectively, we acted swiftly over the past few months to leverage our sought-after technology to create several long-term business initiatives to enhance our value," commented Dr. Shai Yarkoni, Chief Executive Officer. "In addition to pursuing a potential merger with a global leader in the high growth medical-grade cannabis market, which is being delayed due to COVID-19, we have either initiated or are contemplating other business development activities that will greatly benefit from our innovation, technology and know-how. I believe each of these opportunities represents meaningful catalysts for Cellect in multi-billion-dollar markets, subject to resolution of the COVID-19 pandemic and return to normal course of business."

Notwithstanding the continued delays due to COVID-19, the Company remains focused on the following operational and clinical objectives:

    --  Recruit the final patient in the Israel trial, as soon as practically
        allowed, and publish the primary endpoint results six months later
    --  Commence the U.S. trial immediately upon resumption of normal business
        practices since the Company has already received the regulatory and
        institutional approvals to proceed
    --  Highlight its stem cell thought leadership by presenting at two upcoming
        prestigious conferences - the Cell & Gene Meeting on the Mesa (October)
        and the International Congress on Autoimmunity (November), both being
        held virtually
    --  Progress the scale-up process to complete robust, automated, close
        compartment Apograft process through clinically approved medical devices

The Company's cash and cash equivalents totaled $7 million as of June 30, 2020, which includes the approximately $1.5 million (gross before expenses) resulting from several investors exercising certain warrants that were issued in February 2019.

Second Quarter 2020 Financial Results:

    --  Research and development (R&D) expenses for the second quarter of 2020
        were $0.39 million, compared to $0.44 million in the first quarter of
        2020 and $1.03 million in the second quarter of 2019. The decrease in
        the second quarter of 2020 as compared to the first quarter of 2020 was
        primarily due decrease in clinical activities as a result of the
    --  General and administrative (G&A) expenses for the second quarter of 2020
        were $0.61 million, compared to $0.75 million in the first quarter of
        2020 and $0.78 million in the second quarter of 2019. The decrease in
        the second quarter of 2020 as compared to the first quarter of 2020 was
        primarily due to the decrease in professional expenses.
    --  Finance expenses for the second quarter of 2020 was $1.54 million,
        compared to finance income of $0.45 million in the first quarter of
        2020. The change was primarily due to changes related to the fair value
        of the tradable and non-tradable warrants issued in a prior fundraising.
    --  Net loss for the second quarter of 2020 was $2.54 million, or $0.007 per
        share, compared to $0.74 million, or $0.002 per share, in the first
        quarter of 2020, and $0.24 million, or $0.001 per share, in the second
        quarter of 2019.

* 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, 2020 (U.S. $1 = NIS 3.466).

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 timing of the commencement of its planned U.S. clinical trial and its plan to reduce operating costs. 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 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; the Company's ability to retain or attract key employees whose knowledge is essential to the development of its products; and the Company's ability to pursue any strategic transaction or that any transaction, if pursued, will be completed. 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, 2019 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,

                                                                          2020                                                2020                      2019        2020        2019


         U.S. dollars                             

              (In thousands, except share and per

              share data)

            Research and development expenses                             837                                               2,901                     7,086       1,364       3,564

            General and administrative expenses                         1,356                                               4,703                     5,064       2,116       2,709

            Operating loss                                              2,193                                               7,604                    12,150       3,480       6,273

            Financial expenses (income) due to                          1,098                                               3,807                   (7,111)      4,697     (5,919)
     warrants exercisable into shares

            Other financial expenses (income), net                       (15)                                               (55)                      880         627         462

            Total comprehensive loss                                    3,276                                              11,356                     5,919       8,804         816

            Loss per share:

            Basic and diluted loss per share                            0.010                                               0.034                     0.029       0.024       0.004

            Weighted average number of shares                     338,182,275                                         338,182,275               200,942,871 365,428,101 224,087,799
      outstanding used to compute basic and
      diluted loss per share

        Cellect Biotechnology Ltd.

       Consolidated Balance Sheet Data



             June 30,                            June 30,   December 31,

                                                                                                                                           2020                                2020           2019

             Unaudited                           Unaudited     Audited

             U.S. dollars                   

                                                                                                                                   (In thousands, except share and per

             share data)

              CURRENT ASSETS:

              Cash and cash equivalents                                                                                                  7,002                              24,269         18,106

              Other receivables                                                                                                            277                                 960            469

                                                                                                                                          7,279                              25,229         18,575

              NON-CURRENT ASSETS:

              Restricted cash                                                                                                               95                                 330            328

              Right of use - Assets under operating lease                                                                                  262                                 908          1,035

              Other long-term receivables                                                                                                   22                                  76             94

              Property, plant and equipment, net                                                                                           314                               1,087          1,288

                                                                                                                                            693                               2,401          2,745

                                                                                                                                          7,972                              27,630         21,320


              Trade payables                                                                                                               121                                 420            158

              Other payables                                                                                                               622                               2,158          3,080

              Current maturities of lease liability                                                                                        120                                 416            396

                                                                                                                                            863                               2,994          3,634


              Warrants to ADS                                                                                                              666                               2,307          2,172

              Lease liability                                                                                                              155                                 538            677

                                                                                                                                            821                               2,845          2,849


              Ordinary shares of no par value:                                                                                               -

              Authorized: 500,000,000 shares at December 31, 2019
      and June 30, 2020; Issued and outstanding:
      224,087,799*) and 390,949,079*) shares as of
      December 31, 2019 and June 30, 2020, respectively.

                 Additional Paid in Capital                                                                                             36,595                             126,839        108,598

                Share-based payments                                                                                                     4,789                              16,597         16,528

                 Treasury shares                                                                                                       (2,719)                            (9,425)       (9,425)

                 Accumulated deficit                                                                                                  (32,377)                          (112,220)     (100,864)

                                                                                                                                          6,288                              21,791         14,837

                                                                                                                                          7,972                              27,630         21,320

              *)         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,

                                                                                                       2020                                        2020                  2019       2020        2019


           U.S. dollars               

                (In thousands)

                  Cash flows from operating activities:


              Total comprehensive loss                                                             (3,276)                                   (11,356)              (5,919)   (8,804)      (816)

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

              Exchange rate difference                                                                   1                                           5                             700

              Net financing expenses                                                                    11                                          37                   815         18         443

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

              Depreciation                                                                              49                                         170                   192         84          94

              Changes in fair value of traded and not                                                1,098                                       3,807               (8,442)     4,697     (5,895)
      traded warrants

              Share-based payment                                                                      239                                         829                   529        468         744

              Decrease (increase) in other receivables                                               (136)                                      (473)                  145      (544)         75

              Increase (decrease) in other payables                                                  (217)                                      (753)                (715)   (1,621)      (730)

              Decrease in right-of-use assets                                                           53                                         183                   314         92         200

              Interest received during the period                                                       10                                          35                  (46)        23        (46)

                Net cash used in operating activities                                   (2,168)                                    (7,516)             (13,121)   (4,887)    (5,929)

                  Cash flows from investing activities:


              Restricted cash, net                                                                     (1)                                        (2)                              2

              Sale (Purchase) of property, plant and equipment                                           9                                          31                 (120)       (3)

                Net cash provided by investing activities                                     8                                          29                 (120)       (1)

                  Cash flows from financing activities:


              Exercise of warrants and stock options into                                            1,358                                       4,707                           4,684

              Leases liabilities                                                                      (61)                                      (212)                (278)     (108)      (178)

              Issue of share capital and warrants, net of                                            2,652                                       9,194                23,723         71     (1,114)
     issue costs

                Net cash provided (used) by financing                                     3,949                                      13,689                23,445      4,647     (1,292)

              Exchange differences on balances of cash                                                (11)                                       (39)                (769)     (721)      (397)
     and cash equivalents

              Increase (decrease) in cash and cash                                                   1,778                                       6,163                 9,435      (962)    (7,618)

              Balance of cash and cash equivalents at the                                                                                      18,106                17,809     25,231      34,862
     beginning of the period

                Balance of cash and cash equivalents at                                                                             24,269                27,244     24,269      27,244
      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.