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Cellular Biomedicine Group Reports Third Quarter Financial Results and Recent Operational Highlights

SHANGHAI, China and CUPERTINO, Calif., Nov. 08, 2016 (GLOBE NEWSWIRE) -- 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 third quarter ended September 30, 2016.

“In recent months, we have been diligently preparing for the launch of our upcoming CD19 and CD20 clinical studies and strengthening our CAR-T intellectual property portfolio,” commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer. “We believe that since August 2015, the China Food and Drug Administration has been working towards formalizing a national cell therapy policy that will lay the groundwork for the safe use of immune cell and stem cell therapy treatments in China. Although the PRC government is still in the process of codifying industry regulations for such cell therapies, in anticipation of potential future market opportunities, we have accelerated the launch of multiple Phase I/IIb clinical studies with CAR-T CD19 and CD20 assets to advance our immuno-oncology pipeline. We have a strong balance sheet to finance our current clinical studies and to further expand our translational medicine research and development.”

Third Quarter 2016 Financial Performance

1. Cash Position: $44.1 million cash and cash equivalents as compared to $14.9 million as of December 31, 2015.
2. Cash Used in Operating Activities: We used $3.3 million and $12.1 million for the three months and nine months ended September 30, 2016 in operating activities as compared to $2.9 million and $8.6 million for the same periods in 2015.
3. G&A Expenses: General and administrative expenses for the three months and nine months ended September 30, 2016 were $2.8 million and $8.6 million respectively, compared to $3.5 million and $9.9 million for the same periods in 2015.
4. R&D Expenses: Research and development expenses for the three months and nine months ended September 30, 2016 were $2.9 million and $8.3 million respectively, compared to $2.2 million and $5.0 million for the same periods in 2015.
5. Net Loss: Net loss allocable to common stock holders for the three months ended September 30, 2016 was $10.7 million, compared to $5.1 million for the same period in 2015. A $4.6 million impairment charge was incurred in the third quarter due to legacy, non-core business investments.

Business and Operational Highlights for the Third Quarter 2016 to date

  • The Company signed a tenancy deposit agreement to lease a 10,500 square meters facility located in Shanghai;
  • Appointment of Dr. Zhou Hansheng as a Director of the Company; and
  • Completed treatment of eighteen patients in Phase I clinical study of AlloJoinTM haMPC therapy for Knee Osteoarthritis (KOA).

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 twelve 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 Nine Months Ended
September 30, September 30,
2016 2015 2016
2015
Net sales and revenue $ 10,012 $ 624,907 $ 570,102 $ 1,885,256
Operating expenses:
Cost of sales 9,128 443,416 835,908 1,335,707
General and administrative 2,790,305 3,467,184 8,638,877 9,915,956
Selling and marketing 124,143 190,152 342,377 500,393
Research and development 2,897,736 2,190,240 8,268,953 4,968,352
Impairment of investments 4,611,714 - 4,611,714 123,428
Total operating expenses 10,433,026 6,290,992 22,697,829 16,843,836
Operating loss (10,423,014) (5,666,085) (22,127,727) (14,958,580)
Other income (expense):
Interest income 22,338 8,386 57,678 29,417
Other income (expense) (17,314) 492,101 6,652 502,921
Total other income, net 5,024 500,487 64,330 532,338
Loss before taxes (10,417,990) (5,165,598) (22,063,397) (14,426,242)
Income taxes credit (provision) (243,230) 23,400 (5,218) (29,602)
Net loss $ (10,661,220) $ (5,142,198) $ (22,068,615) $ (14,455,844)
Other comprehensive income (loss):
Cumulative translation adjustment (58,824) (225,198) (314,189) (163,353)
Unrealized gain (loss) on investments, net of tax - (1,520,000) 5,300,633 6,543,460
Reclassification adjustments, net of tax, in connection with other-than-temporary impairment of investments (5,557,939) - (5,557,939) -
Total other comprehensive income (loss): (5,616,763) (1,745,198) (571,495) 6,380,107
Comprehensive gain (loss) $ (16,277,983) $ (6,887,396) $ (22,640,110) $ (8,075,737)
Net loss per share :
Basic $ (0.75) $ (0.44) $ (1.67) $ (1.27)
Diluted $ (0.75) $ (0.44) $ (1.67) $ (1.27)
Weighted average common shares outstanding:
Basic 14,128,465 11,622,756 13,253,290 11,399,958
Diluted 14,128,465 11,622,756 13,253,290 11,399,958


CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2016 2015
Assets
Cash and cash equivalents$ 44,115,886 $ 14,884,597
Accounts receivable, less allowance for doubtful amounts of $10,707 and $nil as of September 30, 2016 and December 31, 2015, respectively 53,477 630,332
Other receivables 264,802 271,344
Inventory 253,173 390,886
Prepaid expenses 661,144 367,050
Taxes recoverable - 150,082
Total current assets 45,348,482 16,694,291
Investments 509,424 5,379,407
Property, plant and equipment, net 3,119,174 2,768,900
Goodwill 7,678,789 7,678,789
Intangibles, net 14,570,556 15,949,100
Long-term prepaid expenses and other assets 1,507,686 989,935
Total assets$ 72,734,111 $ 49,460,422
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable$ 220,205 $ 260,886
Accrued expenses 663,880 845,087
Taxes payable 30,000 -
Other current liabilities 1,015,076 1,913,284
Total current liabilities 1,929,161 3,019,257
Other non-current liabilities 10,482 76,229
Total liabilities 1,939,643 3,095,486
Stockholders' equity:
Preferred stock, par value $.001, 50,000,000 shares authorized; none issued and outstanding as of September 30, 2016 and December 31, 2015, respectively - -
Common stock, par value $.001, 300,000,000 shares authorized; 14,240,610 and 11,711,645 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively 14,241 11,711
Additional paid in capital 150,874,763 103,807,651
Accumulated deficit (79,406,926) (57,338,311)
Accumulated other comprehensive income (loss) (687,610) (116,115)
Total stockholders' equity 70,794,468 46,364,936
Total liabilities and stockholders' equity$ 72,734,111 $ 49,460,422


CELLULAR BIOMEDICINE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
2016 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (22,068,615) $ (14,455,844)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,034,411 1,537,323
Loss on disposal of assets 1,034 -
Stock based compensation expense 3,944,125 5,672,955
Decrease in fair value of accrued expenses for the acquisition of intangible assets - (413,559)
Other than temporary impairment on investments 4,611,714 123,428
Realized losses from sale of investments - 5,178
Inventory provision 110,145 -
Allowance for doubtful account 10,707 -
Changes in operating assets and liabilities:
Accounts receivable 548,268 (275,317)
Other receivables 1,275 (176,301)
Inventory 33,398 (49,828)
Prepaid expenses (307,924) 108,055
Taxes recoverable 150,082 -
Other current assets - 110,347
Long-term prepaid expenses and other assets (376,214) (156,704)
Accounts payable (33,281) (280,548)
Accrued expenses (167,615) 183,105
Advances payable to related party - (30,216)
Other current liabilities (528,430) (63,426)
Taxes payable 30,000 (198,488)
Other non-current liabilities (65,449) (212,371)
Net cash used in operating activities (12,072,369) (8,572,211)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceed from sale of investments, net of issuance cost paid - 1,480
Purchases of intangibles (11,160) (4,577,740)
Purchases of assets (1,642,179) (918,289)
Net cash used in investing activities (1,653,339) (5,494,549)
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 685,712 478,798
Net cash provided by financing activities 43,123,086 19,443,647
EFFECT OF EXCHANGE RATE CHANGES ON CASH (166,089) (41,094)
INCREASE IN CASH AND CASH EQUIVALENTS 29,231,289 5,335,793
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,884,597 14,770,584
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 44,115,886 $ 20,106,377
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes $ 6,705 $ 99,668
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 +1 408-973-7884 sarah.kelly@cellbiomedgroup.com Vivian Chen Managing Director Investor Relations, Grayling +1 347 481-371 vivian.chen@grayling.com

Source:Cellular Biomedicine Group Inc.