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 COVID-19.
  • 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




Convenience











translation











Six months

ended


Six months ended


Three months ended



June 30,


June 30,


June 30,



2020


2020


2019


2020


2019



Unaudited


Unaudited



U.S. dollars


NIS



(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
 warrants exercisable into shares


1,098


3,807


(7,111)


4,697


(5,919)












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
  outstanding used to compute basic and
  diluted loss per share


338,182,275


338,182,275


200,942,871


365,428,101


224,087,799


 

 

 

Cellect Biotechnology Ltd.

Consolidated Balance Sheet Data



Convenience







translation







June 30,


June 30,


December 31,



2020


2020


2019



Unaudited


Unaudited


Audited



U.S. dollars


NIS



(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


 

CURRENT LIABILITIES:







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


NON-CURRENT LIABILITIES:







Warrants to ADS

666


2,307


2,172


Lease liability

155


538


677



821


2,845


2,849


EQUITY:







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




Convenience












translation












Six months

ended

Six months ended


Three months ended




June 30,

June 30,


June 30,




2020

2020


2019


2020


2019




Unaudited

Unaudited




U.S. dollars

NIS




(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
  assets presented at fair value through
  profit and loss


-

-


6


-


2


Depreciation


49

170


192


84


94


Changes in fair value of traded and not
  traded warrants


1,098

3,807


(8,442)


4,697


(5,895)


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
 shares


1,358

4,707


-


4,684


-


Leases liabilities


(61)

(212)


(278)


(108)


(178)


Issue of share capital and warrants, net of
 issue costs


2,652

9,194


23,723


71


(1,114)


Net cash provided (used) by financing
 activities


3,949

13,689


23,445


4,647


(1,292)


Exchange differences on balances of cash 
 and cash equivalents


(11)

(39)


(769)


(721)


(397)


Increase (decrease) in cash and cash
 equivalents


1,778

6,163


9,435


(962)


(7,618)


Balance of cash and cash equivalents at the
 beginning of the period


 

5,224

18,106


17,809


25,231


34,862


Balance of cash and cash equivalents at
  the end of the period


 

7,002

24,269


27,244


24,269


27,244


                  

Contact

Cellect Biotechnology Ltd.
Eyal Leibovitz, Chief Financial Officer
www.cellect.co
+972-9-974-1444

Or

EVC Group LLC  
Michael Polyviou
(732) 933-2754
mpolyviou@evcgroup.com

 

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SOURCE Cellect Biotechnology Ltd.

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