Cellect Biotechnology Reports Third Quarter Financial and Operating Results; Recent Developments Position Company to Accelerate Progress in 2021

Promising Progress on Clinical Development Progress, Collaborations and Partnering

Mutually Ended Discussion on Medical Cannabis Commercial and Merger Agreements

TEL AVIV, Israel, Nov. 20, 2020 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2020. Subsequent to the end of the third quarter, the Company announced several other key achievements subsequent to the end of the third quarter that position it for continued success in 2021, including clinical and operational objectives:

  • Initiated its clinical trial in the U.S. The trial is being performed at Washington University School of Medicine in St. Louis, Missouri, which is among the leading medical centers in the U.S. The Principal Investigator for the clinical trial is Zhifu Xiang, M.D., of Washington University. He is an Associate Professor in the Division of Oncology's Bone Marrow Transplantation & Leukemia Section in the Department of Medicine. John Dipersio M.D, Ph.D., will act as co-Principal Investigator for the study. He is the chief of the Division of Oncology in the Department of Medicine at Washington University.
  • Entered into a collaborative agreement with the Swedish XNK Therapeutics, enabling it to leverage Cellect’s technology in Natural Killer cell therapies. XNK is a clinical stage Swedish company working with the Karolinska Institute.

“In spite of the COVID-19 challenges we expedited our clinical and business development activities as we successfully achieved several objectives,” commented Dr. Shai Yarkoni, Chief Executive Officer. “Specifically, we recently initiated our U.S. clinical trial and entered into a partnership with a clinical stage biotech company that will leverage our functional cell selection technology. I believe these results reflect our steadfast determination and success progressing our clinical trials, which also includes the trial in Israel, combined with the latest collaboration agreement with XNK Therapeutics gives us multiple shots on goal to maximize shareholder value. We believe, based on our internal evaluation and assessment, that each of these opportunities could potentially represent significant revenue streams in the coming years.”

Separately, Cellect and Canndoc Ltd. have mutually agreed to end previously announced commercial and merger discussions. The Company will continue to pursue a partner that can bring value to its shareholders and progress the development of the Company’s platform technology.

The Company's cash and cash equivalents totaled $6.07 million as of September 30, 2020. The Company will use its resources to progress clinical and business development efforts to advance its functional cell selection technology. The Company has sufficient funds to operate in the next 15 months. Reference is made to Note 1. C (Going Concern) in the Interim Consolidated Financial Statements as of June 30th, 2020, which were filed as an exhibit to a Form 6-K dated August 12, 2020.

Third Quarter 2020 Financial Results:

  • Research and development (R&D) expenses for the third quarter of 2020 were $0.37 million, compared to $0.72 million in the third quarter of 2019. The decrease in the R&D expenses is primarily due to decrease in clinical activities as a result of the COVID-19.
  • General and administrative (G&A) expenses for the third quarter of 2020 were $0.36 million compared to $0.80 million in the third quarter of 2019. The decrease in G&A expenses was primarily due to the decrease in professional expenses.
  • Finance income for the third quarter of 2020 were $0.26 million, compared to finance income of $0.12 million in the third quarter of 2019. 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 third quarter of 2020 was $0.47 million, or $0.001 per share compared to $1.40 million, or $0.006 per share in the third 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 September 30, 2020 (U.S. $1 = NIS 3.441).

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 cell based therapies.

The Company's technology is expected to provide researchers, clinical community, and pharma companies with the tools to rapidly isolate specific cells in quantity and quality allowing 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.
Eyal Leibovitz, Chief Financial Officer


Michael Polyviou
(732) 933-2754

Cellect Biotechnology Ltd
Consolidated Statement of Operation

  Nine months
 Nine months ended Three months ended
  September 30, September 30, September 30,
  2020 2020 2019 2020 2019
  Unaudited Unaudited
  U.S. dollars NIS
  (In thousands, except share and per share data)
Research and development expenses 1,218 4,190 9,551 1,289 2,465
General and administrative expenses 1,727 5,944 7,832 1,241 2,768
Operating loss 2,945 10,134 17,383 2,530 5,233
Financial expenses (income) due to warrants exercisable into shares 790 2,717 (8,020) (1,090) (910)
Other financial expenses, net 40 138 1,369 193 489
Total comprehensive loss 3,775   12,989 10,732 1,633 4,812
Loss per share:          
Basic and diluted loss per share 0.010 0.036 0.051 0.004 0.021
Weighted average number of shares outstanding used to compute basic and diluted loss per share 390,949,079 390,949,079 208,771,303 390,949,079 224,087,799

Cellect Biotechnology Ltd.
Consolidated Balance Sheet Data

 September 30, September 30, December 31, 
 2020  2020  2019
 Unaudited Unaudited Audited
 U.S. dollars NIS
 (In thousands, except share and per share data)
Cash and cash equivalents6,071  20,889  18,106 
Other receivables205  707  469 
 6,276  21,596  18,575 
Restricted cash96  329  328 
Right-of-use assets238  819  1,035 
Other long-term receivables19  66  94 
Property, plant and equipment, net379  1,304  1,288 
 732  2,518  2,745 
 7,008  24,114  21,320 
Trade payables71  243  158 
Other payables579  1,994  3,080 
Current maturities of lease liability136  468  396 
 786  2,705  3,634 
Warrants to ADS354  1,218  2,172 
Lease liability112  386  677 
 466  1,604  2,849 
Ordinary shares of no par value:      
Authorized: 500,000,000 shares at December 31, 2019 and September 30, 2020; Issued and outstanding: 390,949,079*) and 224,087,799*) shares as of December 31, 2019 and September 30, 2020, respectively.-  -  - 
Additional Paid in Capital36,861  126,839  108,598 
Share-based payments4,721  16,244  16,528 
Treasury shares(2,739) (9,425) (9,425)
Accumulated deficit(33,087) (113,853) (100,864)
 5,756  19,805  14,837 
 7,008  24,114  21,320 

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

Cellect Biotechnology Ltd
Consolidated Cash Flow Data

 Nine months
Nine months ended Three months ended
 September 30,September 30, September 30,
 2020 2020  2019  2020  2019
 U.S. dollarsNIS
 (In thousands)
Cash flows from operating activities:        
Total comprehensive loss(3,775)(12,989) (10,732) (1,633) (4,812)
Adjustments to reconcile net loss to net cash used in operating activities:        
Exchange rate difference(61)(211) -  (216) - 
Net financing expenses14 48  1,087  11  272 
Loss (gain) from revaluation of financial assets presented at fair value through profit and loss- -  8  -  2 
Depreciation75 256  285  86  93 
Changes in fair value of traded and not traded warrants790 2,718  (9,351) (1,089) (910)
Share-based payment138 476  1,901  (353) 1,371 
Decrease (increase) in other receivables(61)(210) 146  263  - 
Decrease in other payables(334)(1,149) (1,855) (396) (1,138)
Depreciation of Right of use - Assets under operating lease79 272  457  89  143 
Interest received during the period16 56  (75) 21  (29)
Net cash used in operating activities(3,119)(10,733) (18,129) (3,217) (5,008)
Cash flows from investing activities:        
Restricted deposit, net- (1) -  1  - 
Sales (Purchase) of property, plant, and equipment(36)(124) (120) (155) - 
Net cash provided by investing activities(36)(125) (120) (154) - 
Cash flows from financing activities:        
Exercise of warrants and stock options into shares1,341 4,615  -  (92) - 
Leases liabilities(94)(324) (422) (112) (143)
Issue of share capital and warrants, net of issue costs2,672 9,194  23,723  -  - 
Net cash provided (used) by financing activities3,919 13,485  23,301  (204) (143)
Exchange differences on balances of cash and cash equivalents45 156  (1,012) 195  (243)
Increase (decrease) in cash and cash equivalents809 2,783  4,040  (3,380) (5,394)
Balance of cash and cash equivalents at the beginning of the period5,262 18,106  17,809  24,269  27,243 
Balance of cash and cash equivalents at the end of the period6,071 20,889  21,849  20,889  21,849 

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