Full Press Release Details
Biotechnology and Quoin Pharmaceuticals Announce Strategic Merger
to $25.25 million of funding at $75 million pre-money valuation to be available to the combined company concurrently with the
shareholders to retain approximately 25% of the combined Company pre-funding
Aviv, Israel and Ashburn, VA - March 24, 2021 - Cellect Biotechnology Ltd. (NASDAQ: APOP), a developer of innovative
technology that enables the functional selection of stem cells, and Quoin Pharmaceuticals Inc. ("Quoin"), a privately
held specialty pharmaceutical company, today announced that the Boards of Directors of the two companies have unanimously approved
a definitive Merger Agreement (the "Agreement").
the terms of the Agreement, Cellect shareholders will retain approximately 25% of the combined shares before investment while
the shareholders of Quoin will receive shares of Cellect common stock representing approximately 75% of the pre-investment number
of shares. Cassel Salpeter & Co., an independent investment banking firm, provided a fairness opinion with respect to the
1:3 ratio of shares between Cellect original shareholders and Quoin.
connection with the merger, Quoin has secured $25.25 million in committed equity funding from Altium Capital, a highly regarded
institutional healthcare investor. The merger agreement provides for certain dilution protections for the pre-closing Cellect
shareholders in connection with such equity financing.
is a specialty pharmaceutical company focused on rare and orphan diseases. Quoin's leadership team is made up of industry
veterans, with extensive relevant executive experience and proven records of recent success in the pharmaceutical industry.
strategic merger provides Quoin with additional capital and an exciting opportunity to continue advancing our innovative product
pipeline. As we work to build a strong foundation for growth, we remain committed to addressing the unmet medical needs of rare
disease communities. We look forward to accelerating the clinical development of our programs and delivering enhanced value to
our shareholders," stated Dr. Michael Myers, Chief Executive Officer of Quoin Pharmaceuticals.
has also signed an agreement to sell the entire share capital of Cellect's subsidiary company, Cellect Biotherapeutics Ltd.
(the "Subsidiary"), that will include all of the existing assets, to EnCellX Inc., a newly formed U.S. privately held
company based in San Diego, CA (the "Share Transfer"). The Share Transfer is intended to close concurrently with the
closing of the Cellect and Quoin merger. In consideration for the Share Transfer, the pre-closing Cellect shareholders will receive
a contingent value right ("CVR") entitling the holders to earnouts comprised of certain royalties, milestone payments
Mohanty, the former President & Chief Executive Officer at Lineage Cell Therapeutics (formerly BioTime Inc.) is the Chief
Executive Officer of EnCellX. Prior to joining Lineage, Mr. Mohanty served in various leadership positions of increasing responsibilities
at private and public biotechnology companies, including a long tenure at Shire plc,. Dr. Shai Yarkoni, Cellect's current
Chief Executive Officer, will join Mr. Mohanty as the Chief Technology Officer and a member of EnCellX's Board of Directors.
Dr. Yarkoni's compensation will include a significant component contingent upon the success of EnCellX. Further information
and detail will be provided in the materials that will be submitted to the SEC and the Proxy to be distributed to the shareholders
before Cellect's shareholders' meeting.
is a win-win for our shareholders and represents the best path forward to maximize their investment," commented Dr. Yarkoni,
Chief Executive Officer of Cellect Biotechnology. "Our Board has thoroughly reviewed several opportunities and believe that
Quoin's clinical program, coupled with its experienced leadership and the committed funding, has the potential to reward
our shareholders. In addition, the payments to be distributed to Cellect's pre-closing shareholders under the CVRs create
a unique opportunity to reap the benefits of the continued development of our cell and gene therapy assets. Current management
is fully committed to continue the development of Cellect's technology under EnCellX."
strongly believe in the potential of Cellect's programs, and I am committed to continue the development of these programs
through commercialization," commented Mr. Mohanty. "The expansion of the program with the upcoming U.S. trial is an
opportune time to pivot key operations to the U.S., and working alongside Dr. Yarkoni, I look forward to building and expanding
on previous achievements."
of the merger is subject to approval of the Cellect and Quoin shareholders and certain other conditions and the merger is expected
to close by the end of the second quarter of 2021. Following the completion of the merger. Cellect will be renamed Quoin Pharmaceuticals
and will begin trading on NASDAQ under the symbol 'QNRX.'
Current Report on Form 6-K containing more detailed information regarding the merger transaction will be filed with the Securities
and Exchange Commission.
Securities is acting as exclusive advisor to Quoin Pharmaceuticals for the proposed transaction. Cassel Salpeter & Co., an
independent investment banking firm, was the exclusive advisor for Cellect and rendered a fairness opinion.
served as external evaluator of current Cellect assets.
Cellect Biotechnology Ltd.
Biotechnology (NASDAQ: 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.
Company's 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 Company's current clinical trial is aimed at bone marrow transplantations in cancer treatment.
Quoin Pharmaceuticals
is a privately held specialty pharmaceutical company with a portfolio of development stage products addressing major unmet medical
needs in rare and orphan diseases. The company's lead products are under development for a number of rare skin diseases
including Netherton Syndrome, Peeling Skin Syndrome, SAM Syndrome, Palmoplantar Keratoderma and Epidermolysis Bullosa.
communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. In connection with the
proposed transaction, Cellect Biotechnology will file a registration statement and a related prospectus with the Securities and
Exchange Commission ("SEC") pursuant to which the issuance of the ordinary shares of Cellect Biotechnology in the
proposed transaction will be registered. Investors are urged to read the registration statement and the related prospectus (including
all amendments and supplements) because they will contain important information regarding the Cellect Biotechnology's common
units and the transaction. Investors may obtain free copies of the registration statement and the related prospectus when they
become available, as well as other filings containing information about Cellect Biotechnology, without charge, at the SEC's
Web site (www.sec.gov).
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.
Leibovitz, Chief Financial Officer