GlobeNewswire Inc | Aug 24, 2021 04:16PM EDT

August 24, 2021

Strategic Merger Transaction Remains on Track to Close During the 2021 Third Quarter

Tel Aviv, Israel, Aug. 24, 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 second quarter ended June 30, 2021, and provided an update on the proposed strategic merger with privately-held Quoin Pharmaceuticals and recent clinical news

On August 12, the Securities and Exchange Commission (SEC) declared effective the Companys Form F-4 in connection with the proposed strategic merger with Quoin Pharmaceuticals. Quoin is a specialty pharmaceutical company focused on rare and orphan diseases. Quoins leadership team is made up of industry veterans, with extensive relevant executive experience and proven records of recent success in the pharmaceutical industry. Additional information regarding the proposed strategic merger can be found in the proxy statement that was been filed with the SEC.

The Company has scheduled a Special General Meeting of Shareholders on September 19, 2021, to vote on the proposed strategic merger, and all shareholders and American Depositary Share (the ADSs) holders of Cellect Biotechnology Ltd. as of close of business on August 19, 2021, are entitled to vote at the special meeting.

Second Quarter and Recent Clinical Highlights

-- Reported positive data from the Company's open label Phase 1/2 clinical trial of its ApoGraft technology in Israel: All eleven patients enrolled for the trial were successfully transplantedThe primary objective, safety and tolerability was met and there was no procedure related adverse events (AEs) reported during the course of the study

I am pleased with the teams laser-like focus as we are executing a dual track effort to complete the transaction with Quoin and ensure the seamless transition of our intellectual property (IP) and clinical program to privately-held EnCellX, a U.S. based company that will aim to develop and commercialize our technology, commented Dr. Shai Yarkoni, Chief Executive Officer. We achieved important milestones during the quarter, including the F4 filing as it gets us one step closer to completing the transaction with Quoin. Additionally, the positive top line data we reported from the Israel study validated our technology and is generating momentum as we launch our U.S. clinical program.

Separately, Yaron Ben-Oz, CPA, will be joining the Company as Chief Financial Officer, effective September 1, 2021. Mr. Ben-Oz has over 20 years of financial executive positions in public and private companies and was previously at EY Israel. In June, the Company disclosed that Eyal Leibovitz, the current CFO, planned to leave on August 31, 2021. Following the closing of the strategic merger with Quoin, Mr. Ben-Oz will continue serving as the CFO of Cellect Biopharmaceuticals Ltd. the post-merger subsidiary of EnCellX Inc.

Second Quarter Financial Results:

-- Research and development (R&D) expenses for the second quarter were $0.42 million compared to $0.42 million in the second quarter of 2020. -- General and administrative (G&A) expenses for the second quarter were $0.86 million compared to $0.65 million in the 2020 second quarter. This years G&A expenses included higher professional services fees in connection with the proposed strategic merger with Quoin. -- Finance expenses for the second quarter of 2021 were $0.43 million compared to finance expenses of $1.63 million in the second quarter of 2020. -- Total comprehensive loss for the second quarter was $1.7 million, or $0.004 per share compared total comprehensive loss of $2.7 million, or $0.007 per share, in the second quarter of 2020.

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, 2021 (U.S. $1 = NIS 3.26).

About Cellect Biotechnology Ltd.

Cellect Biotechnology (APOP) is developing 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 products are 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 Company's lead product is currently in FDA approved 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. 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; 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 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; and the Company's 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 SEC's website, www.sec.gov, and in the Company's periodic filings with the SEC.

Contact

Cellect 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 Ltd.Consolidated Statement of Operation

Convenience translation Six months Six months ended Three months ended ended June 30, June 30, June 30, 2021 2021 2020 2021 2020 Unaudited Unaudited U.S. dollars NIS (In thousands, except share and per share data) Research anddevelopment 831 2,710 2,901 1,382 1,364 expenses General andadministrative 1,830 5,967 4,703 2,797 2,116 expenses Operating loss 2,661 8,677 7,604 4,179 3,480 Financialexpenses (income)due to warrants 430 1,401 3,807 1,167 4,697 exercisable intoshares Other financialexpenses (71 ) (233 ) (55 ) 233 627 (income), net Totalcomprehensive 3,020 9,845 11,356 5,579 8,804 loss Loss per share: Basic and diluted 0.008 0.025 0.034 0.014 0.024 loss per share Weighted averagenumber of sharesoutstanding used 391,486,542 391,486,542 338,182,275 392,024,006 365,428,101 to compute basicand diluted lossper share

Cellect Biotechnology Ltd.Consolidated Balance Sheet Data

Convenience translation June 30, June 30, December31, 2021 2021 2020 Unaudited Unaudited Audited U.S. NIS dollars (In thousands, except share and per share data)CURRENT ASSETS: Cash and cash 2,673 8,714 16,964 equivalentsOther receivables 350 1,141 284 3,023 9,855 17,248 NON-CURRENT ASSETS: Restricted cash 99 322 322 Right of use - Assets 153 499 705 under operating leaseOther long-term 15 50 72 receivablesProperty, plant and 322 1,051 1,232 equipment, net 589 1,922 2,331 3,612 11,777 19,579 CURRENT LIABILITIES: Trade payables 150 490 389 Other payables 742 2,419 2,228 Lease liabilities 112 366 369 1,004 3,275 2,986 NON-CURRENT LIABILITIES:Warrants to ADS 791 2,577 1,222 Lease liability 62 202 391 853 2,779 1,613 EQUITY: Ordinary shares of nopar value:Authorized: 500,000,000shares at December31,2020 and June 30, 2021;Issued and outstanding: - - - 390,949,079*) and392,173,679*) shares asof December 31, 2020and June 30, 2021,respectively.Additional Paid in 38,955 126,996 126,838 CapitalShare-based payments 5,196 16,938 16,508 Treasury shares (2,891 ) (9,425 ) (9,425 )Accumulated deficit (39,505 ) (128,786 ) (118,941 ) 1,755 5,723 14,980 3,612 11,777 19,579

*) 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 Six months ended Three months ended ended June 30, June 30, June 30, 2021 2021 2020 2021 2020 Unaudited Unaudited U.S. NIS dollars (In thousands) Cash flowsfrom operatingactivities:Totalcomprehensive (3,020 ) (9,845 ) (11,356 ) (5,579 ) (8,804 )loss Adjustmentsto reconcilenet loss to net cash usedin operatingactivities:Exchange rate 72 232 5 (231 ) 700 differenceNet financing 8 25 37 16 18 expensesDepreciationof Right ofuse - Assets 63 206 183 101 92 underoperatingleaseDepreciation 56 181 170 89 84 Changes infair value of 430 1,403 3,807 1,169 4,697 warrantsShare-based 132 430 829 206 468 paymentDecrease(increase) in (256 ) (835 ) (473 ) 492 (544 )otherreceivablesIncrease(decrease) in 89 292 (753 ) (377 ) (1,621 )otherpayablesInterestreceived 3 8 35 3 23 during theperiodNet cash usedin operating (2,423 ) (7,903 ) (7,516 ) (4,111 ) (4,887 )activities Cash flowsfrom investingactivities:Restricted - - (2 ) - 2 cash, netSale(Purchase) ofproperty, - - 31 - (3 )plant andequipmentNet cashprovided by - - 29 - (1 )investingactivities

Cash flows fromfinancingactivities:Exercise ofwarrants and 34 110 4,707 110 4,684 stock optionsinto sharesLeases (66 ) (214 ) (212 ) (108 ) (108 )liabilitiesIssue ofshare capitaland warrants, - - 9,194 - 71 net of issuecostsNet cashprovided(used) by (32 ) (104 ) 13,689 2 4,647 financingactivitiesExchangedifferenceson balances (76 ) (243 ) (39 ) 228 (721 )of cash andcashequivalentsIncrease(decrease) in (2,531 ) (8,250 ) 6,163 (3,881 ) (962 )cash and cashequivalentsBalance ofcash and cashequivalents 5,204 16,964 18,106 12,595 25,231 at thebeginning ofthe periodBalance ofcash and cashequivalents 2,673 8,714 24,269 8,714 24,269 at the end ofthe period

Second Quarter Financial Results: