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Cellular Biomedicine Group Reports Second Quarter and First Half 2014 Financial Results and Provides Business Highlights

Cellular Biomedicine Group Reports Second Quarter and First Half 2014 Financial Results and Provides Business Highlights  PALO ALTO, Calif., Aug. 14, 2014 (GLOBE NEWSWIRE) -- Cellular Biomedicine Group Inc. (Nasdaq:CBMG) (the "Company"), a biomedicine firm engaged in the development of new treatments for degenerative and cancerous diseases, today reported financial results for the three and six months ended June 30, 2014 and provided business highlights including the six-month data from its Phase I/IIa clinical trial for ReJoin^TM treatment for Knee Osteoarthritis (KOA).  Dr. William (Wei) Cao, Chief Executive Officer of Cellular Biomedicine Group, commented, "We are very excited about the progress we have made so far this year with our lead product candidate ReJoin^TM for Knee Osteoarthritis, especially withthePhase IIa six-month follow-up MRI data. The IIa twelve-month follow-up MRI testhas been completed and final analysis will be available inthethirdquarterof this year.All patients in the Phase IIb trial completedtreatment in July.  We grew our Intellectual Property portfolio to41 patents in various stages of approvalin China, U.S. and PCT, including 12granted China patents. We are excited about our recent announcement to add new potentialreduced time-to-commercialization TCR cancer immunotherapy to our technology platform."  Financial Results  Cellular Biomedicine Group reported a net loss for the three and six months ended June 30, 2014 of $6.7 million, or $0.85 loss per share and $7.1 million, or $0.93 loss per share, respectively, compared to a net loss of $2.5 million, or $0.44 loss per share, and $7.9 million, or $1.52 loss per share, for the same periods a year ago.The increase in net loss of $4.2 million for the three months ended June 30, 2014 compared to the same period in 2013 is related to one-time costs incurred, including impairment of goodwill and employee severance, for the discontinuation of the Consulting segment. The decrease in net loss of $0.8 million for the six months ended June 30, 2014 compared to the same period in 2013 is due to one-time merger expenses incurred in 2013, partially offset by the costs of discontinuing the Consulting segment.  General and administrative expenses for the three months ended June 30, 2014 increased $0.1 million compared to the same period in 2013. The six months ended June 30, 2014 decreased $2.7 million as compared to the same period in 2013, mainly from the costs related to merger activities incurred in 2013.  Research and development expense, depreciation and amortization expense remained relatively unchanged for the three and six months ended June 30, 2014 and 2013.Other income changed minimally as compared to prior periods for rent subsidy.  As of June 30, 2014, the Company had $13.6 million in cash and cash equivalents. For the six months ended June 30, 2014, cash used for operations was $4.7 million compared to $4.6 million for the same period in 2013.  Business Highlights  During and since the second quarter of 2014, Cellular Biomedicine Group strengthened its position as a leading pure-play biotechnology company from China by achieving the following milestones and significant corporate events:    *Released positive six-month data from Phase I/IIa Clinical Trial for     ReJoin^TMtreatment of Knee Osteoarthritis (KOA), which MRI testing     revealed an increase in cartilage volume of whole joint as early as three     months after the therapy, and confirmed average of 53.07mm^3six months     after the therapy.   *Commenced Phase IIb Clinical Trial for ReJoin^TMtreatment of KOA.   *Completed patient enrollment for Phase IIb Clinical Trial for     ReJoin^TMtreatment of KOA.   *Launched pre-clinical study on human adipose derived mesenchymal     progenitor cell (haMPC) therapy for asthma.   *Strengthened the Company's IP portfolio with the addition of one new China     patent granted and two new international patents filed.   *Discontinued the company's Consulting segment.   *Commenced trading on Nasdaq Capital Market as the first pure-play cell     therapy company from China approved for listing on Nasdaq.   *Closed a private placement transaction for total gross proceeds of     approximately $10 Million, the net proceeds of which will primarily be     used for ongoing clinical trials, working capital and potential     acquisitions of strategic assets.   *Announced the proposed acquisition of Agreen Biotech Co., Ltd.China and     its founder's U.S. patent for $3.28 million in cash and the issuance of     753,522 shares of CBMG common stock and the issuance of 75,000 shares of     CBMG common stock.The proposed acquisition would include Intellectual     Property ("IP"), assets and talents of this cancer-therapy focused     developmental stage company.The IP is comprised of T Cells Receptor     ("TCR") clonality analysis technology and T Central Memory Cell (Tcm) and     Dendritic Cell ("DC") preparation methodologies.  Commenting on the results, Tony (Bizuo) Liu, Chief Financial Officer of Cellular Biomedicine Group said, "The recent successful private placement of $10 million and our decision to discontinue the Consulting segment has allowed us to prioritize the Company's resources on pursuing pure cell therapy R&D and further clinical trials.We believe the continued acquisitions of cutting edge technologies and talents will position CBMG as a leader in both stem cell and immune cell technologies in China.We look forward to keeping our shareholders apprised of new developments."  About Cellular Biomedicine Group  Cellular Biomedicine Group, Inc. develops proprietary cell therapies for the treatment of certain degenerative diseases and cancers. Our developmental stem cell, progenitor cell, and immune cell projects are the result of research and development by scientists and doctors fromChinaandthe United States. Our flagship GMP facility, consisting of eight independent cell production lines, is designed, certified and managed according to U.S. standards. To learn more about CBMG, please visit:  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, but are not limited to, risk factors inherent in doing business. 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                                                                                For the Three Months Ended    For the Six Months Ended                   June 30,                      June 30,                   2014           2013           2014           2013                                                 Net sales and                                                 revenue: Biomedical         $118,069     $--         $179,120     $-- Total sales and    118,069       --           179,120       -- revenue                                                              Operating                                                     expenses: Cost of sales      51,953        --           92,553        -- General and        1,719,316     1,578,653     3,101,828     5,758,402 administrative Selling and        44,136        46,552        65,495        52,230 marketing Research and       642,830       639,276       1,140,977     1,119,781 development Total operating    2,458,235     2,264,481     4,400,853     6,930,413 expenses Operating loss     (2,340,166)   (2,264,481)   (4,221,733)   (6,930,413) Other income:                                                 Interest income    341           560           565           872 Other income       74,480        22,611        94,617        16,540 Total other        74,821        23,171        95,182        17,412 income Loss from continuing         (2,265,345)   (2,241,310)   (4,126,551)   (6,913,001) operations before taxes Income tax         --           --           --           -- provision Loss from continuing         (2,265,345)   (2,241,310)   (4,126,551)   (6,913,001) operations                                                              Loss from discontinued       (4,408,918)   (263,204)     (2,994,243)   (1,007,558) Consulting segment Income tax benefit --           --           --           -- Loss on discontinued       (4,408,918)   (263,204)     (2,994,243)   (1,007,558) operations Net loss           $(6,674,263) $(2,504,514) $(7,120,794) $(7,920,559) Other comprehensive                                                 loss: Cumulative translation        4,978         31,959        (6,835)       31,959 adjustment Unrecognized gain (loss) on          4,042,797     (112,253)     3,521,349     (734,573) investments Comprehensive loss $(2,626,488) $(2,584,808) $(3,606,280) $(8,623,173)                                                              Earnings per share for continuing                                                operations: Basic              $(0.29)      $(0.39)      $(0.54)      $(1.33) Diluted            $(0.29)      $(0.39)      $(0.54)      $(1.33) Earnings per share discontinued                                                  operations: Basic              $(0.56)      $(0.05)      $(0.39)      $(0.19) Diluted            $(0.56)      $(0.05)      $(0.39)      $(0.19) Earnings per share                                            net loss: Basic              $(0.85)      $(0.44)      $(0.93)      $(1.52) Diluted            $(0.85)      $(0.44)      $(0.93)      $(1.52)                                                              Weighted average common shares                                                 outstanding: Basic              7,829,314      5,719,075      7,660,974      5,196,583 Diluted            7,829,314      5,719,075      7,660,974      5,196,583     CELLULAR BIOMEDICINE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS                                                   June 30,      December 31,                                                   2014          2013                                                                 Assets                                                           Cash and cash equivalents                          $13,563,521 $7,175,215 Accounts receivable                                24,000       10,581 Other receivable                                   63,069       78,521 Inventory                                          156,490      119,119 Prepaid expenses                                   437,473      191,572 Total current assets                               14,244,553   7,575,008                                                                 Investments                                       10,224,177   5,105,891 Property, plant and equipment, net                 819,912      1,014,805 Goodwill                                           --           3,299,566 Intangibles, net                                   419,599      601,456 Long-term prepaid expenses and other assets        498,888      -- Total assets (1)                                   $26,207,129 $17,596,726 Liabilities and Stockholders' Equity Liabilities:                                                     Accounts payable                                   $109,097    $213,891 Accrued expenses                                   1,071,606    503,717 Advances payable to related party                  34,471       67,999 Other current liabilities                          1,305,066    1,416,046 Total current liabilities                          2,520,240    2,201,653 Total liabilities (1)                              2,520,240    2,201,653 Stockholders' equity:                                            Preferred stock, par value $.001, 50,000,000 shares authorized; none issued and outstanding as  --          -- of June 30, 2014 and December 31, 2013, respectively Common stock, par value $.001, 300,000,000 shares authorized; 9,074,068 and 7,382,797 issued and     9,074        7,383 outstanding as of June 30, 2014 and December 31, 2013, respectively Additional paid in capital                         49,757,998   37,861,593 Accumulated deficit                                (29,536,773) (22,415,979) Accumulated other comprehensive income (loss)      3,456,590    (57,924) Total stockholders' equity                         23,686,889   15,395,073 Total liabilities and stockholders' equity         $26,207,129 $17,596,726    CELLULAR BIOMEDICINE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                                                For the Six Months Ended                                                 June 30,                                                 2014           2013                                                  CASH FLOWS FROM OPERATING ACTIVITIES:                           Net loss                                         $(7,120,794) $(7,920,559) Adjustments to reconcile net loss to net cash                   used in operating activities: Depreciation and amortization                    437,015       425,578 Loss on disposal of assets                       10,358        -- Stock based compensation expense                 612,622       710,402 Amortization of deferred stock compensation      63,518        337,217 Common stock issued for services                 --           1,844,155 Impairment of goodwill                           3,299,566     -- Loss recognized in excess of cash received on    5,913         69,071 disposition of investment stock Value of stock received for services             (1,610,000)   -- Deferred tax                                    --           (14,783) Changes in operating assets and liabilities:                    Accounts receivables                             (13,419)      20,683 Investments                                     7,150         -- Other receivables                                15,452        (38,104) Inventory                                        (37,371)      6,802 Prepaid expenses and other assets                (245,901)     (154,994) Long-term prepaid expenses and other assets      (498,888)     14,802 Accounts payables                                (104,794)     (16,704) Other current liabilities                        (110,980)     (149,048) Accrued expenses                                 567,889       254,944 Net cash used in operating activities            (4,722,664)   (4,610,538)                                                                CASH FLOWS FROM INVESTING ACTIVITIES:                           Acquisition of business, net of cash acquired    --           2,568,995 Proceeds from the sale of assets                 --           10,071 Purchases of intangibles                         --           (12,880) Purchases of assets                              (77,537)      (52,465) Net cash (used in) provided by investing         (77,537)      2,513,721 activities                                                                CASH FLOWS FROM FINANCING ACTIVITIES:                           Proceeds from the issuance of common stock       11,221,956    -- Repayment of advances from affiliate             (33,528)      (1,250) Net cash provided by (used in) financing         11,188,428    (1,250) activities                                                                EFFECT OF EXCHANGE RATE CHANGES ON CASH          79            13,319                                                                INCREASE (DECREASE) IN CASH                      6,388,306     (2,084,748) CASH, BEGINNING OF PERIOD                        7,175,215     4,144,896 CASH, END OF PERIOD                              $13,563,521  $2,060,148                                                                SUPPLEMENTAL CASH FLOW INFORMATION                                                                                             Non cash financing and investing activities:                    Issuance of company stock for accrued            $--         $149,475 liabilities and advances Issuance of stock for services                   $--         $1,844,155  CONTACT: Sarah Kelly          Director of Corporate Communications, CBMG          +1 650 566-5064                   Vivian Chen          Managing Director Investor Relations, Grayling          +1 646-284-9427  Cellular Biomedicine Group Inc. 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