GlobeNewswire Inc | Nov 20, 2020 08:00AM EST

November 20, 2020

Promising Progress on Clinical DevelopmentProgress, Collaborations and Partnering

MutuallyEnded 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 Cellects 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 Companys 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 Companys 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.

ContactCellect Biotechnology Ltd. Eyal Leibovitz, Chief Financial Officerwww.cellect.co+972-9-974-1444

Or

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

Cellect Biotechnology LtdConsolidated Statement of Operation

Convenience translation Nine months Nine months ended Three months ended ended September September 30, September 30, 30, 2020 2020 2019 2020 2019 Unaudited Unaudited U.S. dollar NIS s (In thousands, except share and pershare data) Research anddevelopment 1,218 4,190 9,551 1,289 2,465expenses General andadministrative 1,727 5,944 7,832 1,241 2,768expenses Operating loss 2,945 10,134 17,383 2,530 5,233 Financialexpenses(income) due 790 2,717 (8,020) (1,090) (910)to warrantsexercisableinto shares Otherfinancial 40 138 1,369 193 489expenses, net Totalcomprehensive 3,775 12,989 10,732 1,633 4,812loss Loss per share: Basic anddiluted loss 0.010 0.036 0.051 0.004 0.021per share Weightedaverage numberof sharesoutstanding 390,949,079 390,949,079 208,771,303 390,949,079 224,087,799used tocompute basicand dilutedloss per share

Cellect Biotechnology Ltd.Consolidated Balance Sheet Data

Convenience translation September September December 30, 30, 31, 2020 2020 2019 Unaudited Unaudited Audited U.S. dollar NIS s (In thousands, except share and per share data)CURRENT ASSETS: Cash and cash equivalents 6,071 20,889 18,106 Other receivables 205 707 469 6,276 21,596 18,575 NON-CURRENT ASSETS: Restricted cash 96 329 328 Right-of-use assets 238 819 1,035 Other long-term receivables 19 66 94 Property, plant and equipment, net 379 1,304 1,288 732 2,518 2,745 7,008 24,114 21,320

CURRENT LIABILITIES: Trade payables 71 243 158 Other payables 579 1,994 3,080 Current maturities of lease liability 136 468 396 786 2,705 3,634 NON-CURRENT LIABILITIES: Warrants to ADS 354 1,218 2,172 Lease liability 112 386 677 466 1,604 2,849 EQUITY: Ordinary shares of no par value: Authorized: 500,000,000 shares atDecember31, 2019 and September 30,2020; Issued and outstanding: - - - 390,949,079*) and 224,087,799*)shares as of December 31, 2019 andSeptember 30, 2020, respectively.Additional Paid in Capital 36,861 126,839 108,598 Share-based payments 4,721 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 LtdConsolidated Cash Flow Data

Convenience translation Nine months Nine months ended Three months ended ended September September 30, September 30, 30, 2020 2020 2019 2020 2019 Unaudited Unaudited U.S. dollar NIS s (In thousands)Cash flows fromoperating activities:Totalcomprehensive (3,775 ) (12,989 ) (10,732 ) (1,633 ) (4,812 )loss Adjustments toreconcile netloss to net cash used inoperatingactivities:Exchange rate (61 ) (211 ) - (216 ) - differenceNet financing 14 48 1,087 11 272 expensesLoss (gain) fromrevaluation offinancial assetspresented at - - 8 - 2 fair valuethrough profitand lossDepreciation 75 256 285 86 93 Changes in fairvalue of traded 790 2,718 (9,351 ) (1,089 ) (910 )and not tradedwarrantsShare-based 138 476 1,901 (353 ) 1,371 paymentDecrease(increase) in (61 ) (210 ) 146 263 - otherreceivablesDecrease in (334 ) (1,149 ) (1,855 ) (396 ) (1,138 )other payablesDepreciation ofRight of use - 79 272 457 89 143 Assets underoperating leaseInterestreceived during 16 56 (75 ) 21 (29 )the periodNet cash used inoperating (3,119 ) (10,733 ) (18,129 ) (3,217 ) (5,008 )activities Cash flows frominvesting activities:Restricted - (1 ) - 1 - deposit, netSales (Purchase)of property, (36 ) (124 ) (120 ) (155 ) - plant, andequipmentNet cashprovided by (36 ) (125 ) (120 ) (154 ) - investingactivities Cash flows fromfinancing activities:Exercise ofwarrants and 1,341 4,615 - (92 ) - stock optionsinto sharesLeases (94 ) (324 ) (422 ) (112 ) (143 )liabilitiesIssue of sharecapital and 2,672 9,194 23,723 - - warrants, net ofissue costsNet cashprovided (used) 3,919 13,485 23,301 (204 ) (143 )by financingactivitiesExchangedifferences onbalances of cash 45 156 (1,012 ) 195 (243 )and cashequivalentsIncrease(decrease) in 809 2,783 4,040 (3,380 ) (5,394 )cash and cashequivalentsBalance of cashand cashequivalents at 5,262 18,106 17,809 24,269 27,243 the beginning ofthe periodBalance of cashand cashequivalents at 6,071 20,889 21,849 20,889 21,849 the end of theperiod