CBMG Cellular Biomedicine Group Inc

- Ended Second Quarter with $47.5 million in Cash -

Cellular Biomedicine Group Inc. (NASDAQ:CBMG) (“CBMG” or the “Company”), a clinical-stage biomedicine firm engaged in the development of immunotherapies for cancer and effective stem cell therapies for degenerative diseases, today reported financial results and business highlights for the second quarter and six months ended June 30, 2016.

“In the first half of 2016, we made several significant advancements towards the operating objectives for our dual technology platforms of immuno-oncology and stem cells,” commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer.  “The completion of a $43.13 million strategic investment has strengthened our capabilities to continue to invest in research and development, optimize our clinical process and expand our focus on the CAR-T pipeline.  We anticipate in the coming quarters launching clinical trials in China on CAR-T CD19 and CD20 constructs and to further bolster our immuno-oncology pipeline.  We have completed patient treatment in the Phase I trial of AlloJoinTM, our off-the-shelf allogeneic adipose-derived progenitor cell (haMPC) therapy for Knee Osteoarthritis (KOA) in China, and are encouraged to see no serious adverse events thus far. We continue to evaluate the feasibility of initiating a clinical study of AlloJoinTM under IND to support the same indication in the United States. As we look forward to the remainder of 2016, we will continue to prioritize our immuno-oncology and stem cell clinical pipelines for multiple indications that serve large addressable markets while facilitating future partnerships and collaborations that will enhance our ability to develop safe and effective therapies.”  Second Quarter and First Half 2016 Financial Performance

1. Cash Position: Cash and cash equivalents as of June 30, 2016 were $47.5 million compared to $14.9 million as of December 31, 2015. This increase was due to a private placement financing in February and April 2016 for gross proceeds of approximately $43 million, offset by cash used in operating and investment activities. 2. Net Cash Used in Operating Activities: Net cash used in operating activities for the quarter and six months ended June 30, 2016 was $5.2 million and $8.8 million, respectively, compared to $3.3 million and $5.7 million for the same periods in 2015. 3. G&A Expenses: General and administrative expenses for the quarter and six months ended June 30, 2016 were $3.1 million and $5.8 million, respectively, compared to $3.8 million and $6.4 million for the same periods in 2015. 4. R&D Expenses: Research and development expenses for the quarter and six months ended June 30, 2016 were $3 million and $5.4 million respectively, compared to $1.3 million and $2.8 million for the same periods in 2015. The increase of R&D costs was primarily attributed to:5. Net Loss: Net loss allocable to common stock holders for the quarter and six months ended June 30, 2016 was $7.2 million and $11.4 million respectively, compared to $5 million and $9.3 million for the same periods in 2015. Changes in net loss are primarily attributable to changes in operations of our biomedicine segment, which are described above.

Recent Business and Technology Highlights

• Completed treatment for eighteen patients in Phase I trial of AlloJoinTM haMPC therapy for Knee Osteoarthritis (KOA);
• China Patent Office granted the Company’s patent application on  genetically engineered anti-CD20 Chimeric Antigen Receptor-positive NKT cells, its production and application;
• Advanced the Company’s cash position following the closing of an agreement with Wuhan Dangdai Science & Technology Industries Group Inc. to invest an aggregate of $43.13 million for 2.27 million shares of the Company’s common stock, representing a 16.2% post-money stake investment as of April 15, 2016;
• Appointment of Dr. Zhou Hansheng as a member of the Board of Directors.

Pipeline Update

• Conducted single-center Phase I trial of AlloJoinTM haMPC therapy for Knee Osteoarthritis (KOA) in China
  • Eighteen patients have received two dose intra-articular injections at three week intervals and have not been presented with any serious adverse events thus far
  • Patients will be monitored over the next 12 months for safety and efficacy signs
  • Phase I clinical research trial for AlloJoin™ is registered at ClinicalTrials.gov under the number NCT02641860
• Anticipate announcement of sponsorship of multi-indication clinical studies with multiple institutions using CBMG’s CD19 and CD20 constructs and stem cell technologies by Q12017 after the technologies are optimized and manufacturing capabilities are in place

About Cellular Biomedicine Group Cellular Biomedicine Group, Inc. develops proprietary cell therapies for the treatment of certain degenerative and cancerous diseases.  Our developmental stem cell and Immuno-Oncology projects are the result of research and development by scientists and doctors from China and the United States. Our GMP facilities in China, consisting of nine independent cell production lines, are designed, certified and managed according to U.S. standards.  To learn more about CBMG, please visit: www.cellbiomedgroup.com

Forward-Looking Statements Statements in this press release relating to plans, strategies, trends, specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include risks inherent in doing business, trends affecting the global economy, including the devaluation of the RMB by China in August 2015 and other risks detailed from time to time in CBMG’s reports filed with the Securities and Exchange Commission, quarterly reports on form 10-Q, current reports on form 8-K and annual reports on form 10-K. Forward-looking statements may be identified by terms such as "may," "will," "expects," "plans," "intends," "estimates," "potential," or "continue," or similar terms or the negative of these terms. Although CBMG believes the expectations reflected in the forward-looking statements are reasonable, they cannot guarantee that future results, levels of activity, performance or achievements will be obtained. CBMG does not have any obligation to update these forward-looking statements other than as required by law.

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
			2016				2015				2016				2015
Net sales and revenue		$	71,599			$	656,959			$	560,090			$	1,260,349
Operating expenses:
Cost of sales			323,587				398,229				826,780				892,291
General and administrative			3,072,647				3,768,535				5,848,572				6,448,772
Selling and marketing			39,480				161,219				218,234				310,241
Research and development			2,972,855				1,322,692				5,371,217				2,778,112
Impairment of investments			-				-				-				123,428
Total operating expenses			6,408,569				5,650,675				12,264,803				10,552,844
Operating loss			(6,336,970	)			(4,993,716	)			(11,704,713	)			(9,292,495	)
Other income (expense):
Interest income			18,290				5,920				35,340				21,031
Other income (expense)			7,646				13,523				23,966				10,820
Total other income			25,936				19,443				59,306				31,851
Loss before taxes			(6,311,034	)			(4,974,273	)			(11,645,407	)			(9,260,644	)
Income taxes credit (provision)			(886,248	)			(52,202	)			238,012				(53,002	)
Net loss		$	(7,197,282	)		$	(5,026,475	)		$	(11,407,395	)		$	(9,313,646	)
Other comprehensive income (loss):
Cumulative translation adjustment			(271,438	)			42,236				(255,365	)			61,845
Unrealized gain (loss) on investments, net of tax			(11,115,884	)			10,631,731				5,300,633				8,063,460
Total other comprehensive income (loss):			(11,387,322	)			10,673,967				5,045,268				8,125,305
Comprehensive gain (loss)		$	(18,584,604	)		$	5,647,492			$	(6,362,127	)		$	(1,188,341	)
Net loss per share :
Basic		$	(0.52	)		$	(0.44	)		$	(0.89	)		$	(0.83	)
Diluted		$	(0.52	)		$	(0.44	)		$	(0.89	)		$	(0.83	)
Weighted average common shares outstanding:
Basic			13,737,722				11,531,497				12,810,894				11,286,712
Diluted			13,737,722				11,531,497				12,810,894				11,286,712

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
		June 30,				December 31,
			2016				2015
Assets
Cash and cash equivalents		$	47,470,196			$	14,884,597
Accounts receivable, less allowance for doubtful amounts of $10,782
and $nil as of June 30, 2016 and December 31, 2015, respectively			330,860				630,332
Other receivables			245,073				271,344
Inventory			313,837				390,886
Prepaid expenses			811,403				367,050
Taxes recoverable			-				150,082
Total current assets			49,171,369				16,694,291
Investments			11,211,137				5,379,407
Property, plant and equipment, net			3,204,157				2,768,900
Goodwill			7,678,789				7,678,789
Intangibles, net			15,018,223				15,949,100
Long-term prepaid expenses and other assets			1,256,973				989,935
Total assets		$	87,540,648			$	49,460,422
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable		$	136,355			$	260,886
Accrued expenses			457,392				845,087
Taxes payable			30,000				-
Other current liabilities			1,574,592				1,913,284
Total current liabilities			2,198,339				3,019,257
Deferred tax liabilities			288,830				-
Other non-current liabilities			25,636				76,229
Total liabilities			2,512,805				3,095,486
Commitments and Contingencies
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares
authorized; none issued and outstanding as of
June 30, 2016 and December 31, 2015, respectively			-				-
Common stock, par value $.001, 300,000,000 shares authorized;
14,099,228 and 11,711,645 issued and outstanding
as of June 30, 2016 and December 31, 2015, respectively			14,099				11,711
Additional paid in capital			148,830,297				103,807,651
Accumulated deficit			(68,745,706	)			(57,338,311	)
Accumulated other comprehensive income (loss)			4,929,153				(116,115	)
Total stockholders' equity			85,027,843				46,364,936
Total liabilities and stockholders' equity		$	87,540,648			$	49,460,422

CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Six Months Ended
		June 30,
			2016				2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(11,407,395	)		$	(9,313,646	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization			1,349,137				928,531
Stock based compensation expense			2,412,261				3,618,050
Other than temporary impairment on investments			-				123,428
Realized losses from sale of investments			-				5,178
Inventory provision			105,919				-
Allowance for doubtful account			10,782				-
Changes in operating assets and liabilities:
Accounts receivable			275,333				(304,173	)
Other receivables			20,521				(222,716	)
Inventory			(25,309	)			(27,839	)
Prepaid expenses			(457,032	)			(8,427	)
Taxes recoverable			150,082				-
Other current assets			-				110,347
Long-term prepaid expenses and other assets			(259,624	)			(73,031	)
Accounts payable			(124,531	)			(320,305	)
Accrued expenses			(387,695	)			112,026
Advances  payable to related party			-				(30,216	)
Other current liabilities			(152,605	)			88,991
Taxes payable			30,000				(173,739	)
Deferred tax liabilities			(242,267	)			-
Other non-current liabilities			(50,049	)			(212,265	)
Net cash used in operating activities			(8,752,472	)			(5,699,806	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceed from sale of investments, net of issuance cost paid			-				1,480
Purchases of intangibles			-				(4,385,940	)
Purchases of assets			(1,161,568	)			(224,826	)
Net cash used in investing activities			(1,161,568	)			(4,609,286	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from the issuance of common stock			42,437,374				18,964,849
Proceeds from exercise of stock options			175,399				234,599
Net cash provided by financing activities			42,612,773				19,199,448
EFFECT OF EXCHANGE RATE CHANGES ON CASH			(113,134	)			(9,856	)
INCREASE IN CASH AND CASH EQUIVALENTS			32,585,599				8,880,500
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			14,884,597				14,770,584
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	47,470,196			$	23,651,084
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes		$	(6,705	)		$	(226,855	)
Non-cash investing activities
Acquisition of intangible assets through issuance of the Company's stock		$	-			$	1,096,399

 

Contacts:
Sarah Kelly 
Director of Corporate Communications, CBMG
+1 650 566-5064
sarah.kelly@cellbiomedgroup.com

Vivian Chen
Managing Director Investor Relations, Grayling
+1 347 481-3711
vivian.chen@grayling.com