GlobeNewswire Inc | Mar 29, 2021 09:29AM EDT

March 29, 2021

TEL AVIV, Israel, March 29, 2021 (GLOBE NEWSWIRE) -- Cellect Biotechnology Ltd. (NASDAQ: APOP), a developer of innovative technology that enables the functional selection of stem cells, today reported financial and operating results for the fourth quarter and full year ended December 31, 2020 and provided a corporate update.

On March 24, the Company announced a strategic merger agreement with privately held Quoin Pharmaceuticals, a U.S. based specialty pharmaceutical company focused on rare and orphan diseases. Under the terms of the merger agreement, Quoin has secured $25 million in committed funding from a highly regarded, institutional healthcare investor. Current Cellect shareholders will retain approximately 25% of the combined shares before investment. The merger is expected to close by the end of the second quarter of 2021. Cellect has also signed an agreement to sell its wholly-owned subsidiary company, Cellect Biotherapeutics, to EnCellX, Inc. - a newly founded biotechnology company based in San-Diego, CA. - to continue the development of Cellects products.

Recent Clinical Highlights

-- Due to the COVID-19 pandemic and the Company decision to shift attention and resources to the U.S. Phase I clinical trial, which is expected to enroll the first patient soon, the Company has elected to close the Phase 1/2 clinical trial being performed in Israel earlier than expected, since recruitment of the 12th and final patient was not assured in a timely manner. -- To date, Data from the open label Israel Phase 1/2 clinical trial supports the Companys optimism as it extends its clinical program to the U.S. The Company expects to publish the top line results of the Israel trial in Q2.

Concurrent with our plans to seek strategic alternatives to maximize shareholder value, we also remained focus on advancing our clinical interests in the U.S., commented Dr. Shai Yarkoni, Chief Executive Officer. We have signed a compelling business proposition with Quoin and a privately-held U.S. biotechnology company that allows our current shareholders to benefit from Quoins promising technology and the fruits of continued progress of our clinical programs as they reach critical inflections points through the issuance of contingent value rights to our shareholders in connection with the sale of Cellect Biotherapeutics.

Fourth Quarter and Full Year 2020 Financial Results:

-- Research and development (R&D) expenses for the fourth quarter and for the full year of 2020 were $0.53 million and $1.83 million respectively, compared to $0.80 million in the fourth quarter of 2019 and $3.77 million for the full year of 2019. The decrease in R&D expenses for the full year of 2020 as compared to the full year of 2019 resulted from the reduction in our research and development activities, as we decreased the number of our employees engaged in research and related activities. -- General and administrative (G&A) expenses for the fourth quarter and for the full year of 2020 were $0.67 million and $2.52 million respectively, compared to $0.74 million in the fourth quarter of 2019 and $3.18 million for the full year of 2019. The decrease in G&A expenses for the full year of 2020 as compared to the full year of 2019 resulted from the reduction in the company activities resulting from a decrease in the number of employees. -- Finance expenses for the fourth quarter of 2020 were $0.38 million, and financial expenses were $1.27 million for the full year of 2020, compared to finance expenses of $0.35 million in the fourth quarter of 2019 and financial income of $1.72 million for the full year of 2019, respectively. The financial expenses in the full year of 2020 as compared to the financial income in the full year of 2019 is primarily due to the change in the fair value of the listed warrants granted in our U.S. initial public offering in 2016 and of the unregistered warrants granted in our registered direct offerings in 2019. -- Total Comprehensive loss for the fourth quarter and for the full year of 2020 was $1.58 million and $5.62 million respectively, or $0.004 per share for the fourth quarter and $0.015 per share for the full year of 2020, respectively, compared to $1.89 million, or $0.008 per share, in the fourth quarter of 2019 and $5.23 million, or $0.025 per share, for the full year 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 December 31, 2020 (U.S. $1 = NIS 3.215).

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 Companys technology is expected to provide researchers, clinicians and pharmaceutical 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 Companys current clinical trial is aimed at bone marrow transplantations in cancer treatment.

Forward Looking Statements

This press release contains forward-looking statements about the Companys 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. 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 Companys 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 Companys ability to continue as a going concern; or maintain its current operations; uncertainties involving any strategic transaction the Company may decide to enter into as the result of its current efforts to explore new strategic alternatives; uncertainties of cash flows and inability to meet working capital needs; the Companys ability to obtain regulatory approvals; the Companys ability to obtain favorable pre-clinical and clinical trial results; the Companys technology may not be validated and its methods may not be accepted by the scientific community; difficulties enrolling patients in the Companys clinical trials; the ability to timely source adequate supply of FasL; risks resulting from unforeseen side effects; the Companys 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 Companys industry; unforeseen scientific difficulties may develop with the Companys technology; and the Companys ability to retain or attract key employees whose knowledge is essential to the development of its products. 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, 2020 filed with the U.S. Securities and Exchange Commission, or SEC, which is available on the SECs website, www.sec.gov, and in the Companys periodic filings with the SEC.

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

Or

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

Cellect Biotechnology LtdConsolidated Statement of Operation

Convenience translation Twelve months Twelve months ended Three months ended ended December 31, December 31, December 31, 2020 2020 2019 2020 2019 Unaudited Audited Audited Unaudited Unaudited U.S. dollars NIS (In thousands, except share and per share data) Research anddevelopment 1,830 5,883 12,122 1,693 2,571 expenses General andadministrative 2,523 8,111 10,210 2,167 2,378 expenses Operating loss 4,353 13,994 22,332 3,860 4,949 Financialexpenses(income) due 846 2,721 (7,022 ) 4 998 to warrantsexercisableinto ADS Otherfinancial 424 1,362 1,498 1,224 129 expenses(income), net Totalcomprehensive 5,623 18,077 16,808 5,088 6,076 loss Loss per share: Basic anddiluted loss 0.015 0.049 0.079 0.013 0.027 per share Weightedaverage numberof sharesoutstanding 368,078,786 368,078,786 212,642,505 390,949,079 224,087,799 used tocompute basicand dilutedloss per share

Cellect Biotechnology LtdConsolidated Balance Sheet Data

Convenience translation December December December 31, 31, 31, 2020 2020 2019 Unaudited Audited Audited U.S. NIS dollars ASSETS (In thousands, except share and per share data)CURRENT ASSETS: Cash and cash equivalents 5,277 16,964 18,106 Other receivables 88 284 469 5,365 17,248 18,575 NON-CURRENT ASSETS: Restricted cash 100 322 328 Right of use - Assets under 219 705 1,035 operating leaseOther long-term assets 22 72 94 Property, plant and equipment, 384 1,232 1,288 net 725 2,331 2,745 6,090 19,579 21,320 LIABILITIES AND SHAREHOLDERS? EQUITYCURRENT LIABILITIES: Trade payables 121 389 158 Leases liabilities 115 369 396 Other payables 693 2,228 3,080 929 2,986 3,634 NON-CURRENT LIABILITIES: Warrants to ADS 380 1,222 2,172 Leases liabilities 122 391 677 502 1,613 2,849 EQUITY: Ordinary shares of no par value: Authorized: 500,000,000 shares atDecember31, 2019 and December 312020; Issued and outstanding:224,087,799*) and 390,949,079*) - - - shares as of December 31, 2019and December 31, 2020,respectively.Additional Paid In Capital 39,452 126,838 108,598 Share-based payments 5,135 16,508 16,528 Treasury shares (2,932 ) (9,425 ) (9,425 )Accumulated deficit (36,996 ) (118,941 ) (100,864 ) 4,659 14,980 14,837 6,090 19,579 21,320

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

Cellect Biotechnology LtdConsolidated Cash Flow Data

Convenience translation Twelve months Twelve months ended Three months ended ended December December 31, December 31, 31, 2020 2020 2019 2020 2019 Unaudited Audited Audited Unaudited Unaudited U.S. NIS dollars (In thousands) Cash flowsfrom operatingactivities:Totalcomprehensive (5,623 ) (18,077 ) (16,808 ) (5,088 ) (6,076 )loss Adjustmentsto reconcilenet loss to net cash usedin operatingactivities:Exchange rate (412 ) (1,326 ) 1,036 (1,115 ) (50 )differenceLoss (gain)fromrevaluationof financialassets - - - - (8 )presented atfair valuethroughprofit andlossDepreciationof Right ofuse - Assets 115 369 433 97 (24 )underoperatingleaseDepreciation 109 350 373 94 88 Finance 27 88 128 40 128 expensesIssuance - - 1,621 - 1,621 expensesChanges infair value oftraded and 847 2,722 (8,643 ) 4 708 non tradedwarrants toADSShare-based 229 738 2,708 262 807 paymentDecrease(increase) in 65 207 385 417 239 otherreceivablesIncrease(decrease) in (193 ) (621 ) (1,663 ) 528 192 otherpayablesInterest 20 64 93 8 168 receivedNet cash usedin operating (4,816 ) (15,486 ) (20,337 ) (4,753 ) (2,207 )activities Cash flowsfrom investingactivities:Restricted 2 6 9 7 9 deposit, netProceedsreceived from 11 35 6 - 6 the sale offixed assets(Purchase)Sales ofmarketablesecuritiesmeasured at - - - - - fair valuethroughprofit andlossPurchase ofproperty, (103 ) (329 ) (123 ) (170 ) (3 )plant andequipmentNet cashprovided by (90 ) (288 ) (108 ) (163 ) 12 investingactivitiesCash flowsfrom financingactivities:Exercise ofwarrants and 1,435 4,615 - - - stock optionsinto sharesRepayment onaccount of (137 ) (441 ) (522 ) (117 ) (101 )leaseliabilitiesIssue ofshare capitaland warrants, 2,860 9,194 22,393 - (1,330 )net of issuecostsNet cashprovided(used) by 4,158 13,368 21,871 (117 ) (1,431 )financingactivitiesExchangedifferenceson balances 393 1,264 (1,129 ) 1,108 (117 )of cash andcashequivalentsIncrease(decrease) in (355 ) (1,142 ) 297 (3,925 ) (3,743 )cash and cashequivalentsBalance ofcash and cashequivalents 5,632 18,106 17,809 20,889 21,849 at thebeginning ofthe periodBalance ofcash and cashequivalents 5,277 16,964 18,106 16,964 18,106 at the end ofthe period