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

Published: Aug 12, 2020

 

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

 

Cision View original content:http://www.prnewswire.com/news-releases/cellect-biotechnology-reports-second-quarter-financial-and-operating-results-first-half-2020-strategic-developments-create-long-term-revenue-catalysts-301110743.html

SOURCE Cellect Biotechnology Ltd.

  
 
Company Codes: NASDAQ-SMALL:APOP		  

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