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International Stem Cell Corporation Announces Operating Results for the Three and Nine-months ended September 30, 2016

CARLSBAD, Calif., Nov. 16, 2016 (GLOBE NEWSWIRE) -- International Stem Cell Corporation (OTCQB:ISCO) (www.internationalstemcell.com) (“ISCO” or “the Company”), a California-based biotechnology company developing novel stem cell-based therapies and biomedical products, today provided a business update and announced operating results for the three and nine months ended September 30, 2016.

“We are pleased with our progress in the third quarter. We are particularly proud to have moved our Parkinson’s Disease program into a Phase I clinical trial, an important milestone in the Company’s development. The first patient in the trial has undergone successful intracranial transplant of ISC-hpNSC and is doing well. We are hopeful that this is a step in the right direction in offering Parkinson’s patients a treatment option for this debilitating disease,” said Andrey Semechkin, Ph.D., CEO and Co-Chairman of ISCO.

Third Quarter 2016 Financial Highlights

  • Consolidated revenue for the third quarter of 2016 was $1.94 million, a decrease of 9% compared to the consolidated revenue of $2.14 million for the third quarter of 2015.
  • Gross profit margin for the Company’s revenue-generating subsidiaries for the third quarter of 2016 was $1.34 million, or 69%, compared to gross profit margin of $1.57 million, or 74%, for the third quarter of 2015.
  • Consolidated loss from operations for the third quarter of 2016 was $1.26 million, compared to consolidated loss from operations of $622,000 for the third quarter of 2015.

Year-to-Date Financial Highlights

  • Consolidated revenue for the nine months ended September 30, 2016 was $5.48 million, reflecting a decrease of 2% compared to the consolidated revenue of $5.57 million for the nine months ended September 30, 2015.
  • Gross profit margin for the Company’s revenue-generating subsidiaries for the nine months ended September 30, 2016 was $3.99 million, or 73%, compared to gross profit margin of $4.07 million, or 73%, for the nine months ended September 30, 2015.
  • Consolidated loss from operations for the nine months ended September 30, 2016 was $3.68 million, compared to consolidated loss from operations of $3.53 million for the nine months ended September 30, 2015.

Recent Corporate Highlights

  • First patient in the Phase I clinical trial underwent successful intracranial transplant of ISC-hpNSC as a treatment under investigation for Parkinson’s disease (PD). The operation took place at the Royal Melbourne Hospital in Australia.
  • Published the results of safety studies conducted in support of the first human pluripotent stem cell based therapy for Parkinson's disease. The data from a series of in vitro and in vivo preclinical studies show that the company's proprietary ISC-hpNSC® are devoid of undifferentiated pluripotent stem cells and are safe for transplantation.
  • Presented at the 18th Annual Rodman and Renshaw Global Investment Conference.

About International Stem Cell Corporation

International Stem Cell Corporation is focused on the therapeutic applications of human parthenogenetic stem cells (hpSCs) and the development and commercialization of cell-based research and cosmetic products. ISCO's core technology, parthenogenesis, results in the creation of pluripotent human stem cells from unfertilized oocytes (eggs). hpSCs avoid ethical issues associated with the use or destruction of viable human embryos. ISCO scientists have created the first parthenogenetic, homozygous stem cell line that can be a source of therapeutic cells for hundreds of millions of individuals of differing genders, ages and racial background with minimal immune rejection after transplantation. hpSCs offer the potential to create the first true stem cell bank, UniStemCell™. ISCO also produces and markets specialized cells and growth media for therapeutic research worldwide through its subsidiary Lifeline Cell Technology (www.lifelinecelltech.com), and stem cell-based skin care products through its subsidiary Lifeline Skin Care (www.lifelineskincare.com). More information is available at www.internationalstemcell.com.

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Safe harbor statement

Statements pertaining to anticipated developments, expected clinical studies (including timing and results), progress of research and development, and other opportunities for the company and its subsidiaries, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as "will," "believes," "plans," "anticipates," "expects," "estimates,") should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential products, regulatory approvals, need and ability to obtain future capital, application of capital resources among competing uses, and maintenance of intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the company's business, particularly those mentioned in the cautionary statements found in the company's Securities and Exchange Commission filings. The company disclaims any intent or obligation to update forward-looking statements.

International Stem Cell Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share data)

September 30, December 31,
2016 2015
Assets (Unaudited)
Cash and cash equivalents $733 $532
Accounts receivable, net of allowance for doubtful accounts of $12 and $20 at September 30, 2016 and December 31, 2015, respectively 595 539
Inventory, net 1,284 1,348
Prepaid expenses and other current assets 525 572
Total current assets 3,137 2,991
Property and equipment, net 412 375
Intangible assets, net 3,394 3,223
Non-current inventory 539 489
Deposits and other assets 58 60
Total assets $7,540 $7,138
Liabilities and Stockholders' Equity
Accounts payable $796 $1,092
Accrued liabilities 624 834
Related party payable 26 3,129
Advances 250 250
Fair value of warrant liability 5,419 239
Total current liabilities 7,115 5,544
Commitments and contingencies
Stockholders' Equity
Series B Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, 250,000 issued and outstanding, with liquidation preferences of $378 and $366 at September 30, 2016 and December 31, 2015, respectively
Series D Convertible Preferred stock, $0.001 par value, 50 shares authorized, 43 issued and outstanding, with liquidation preference of $4,320
Series G Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, issued and outstanding, with liquidation preference of $5,000 5 5
Series I-1 Convertible Preferred stock, $0.001 par value, 2,000 and 0 shares authorized at September 30, 2016 and December 31, 2015, respectively, 1,715 and 0 issued and outstanding at September 30, 2016 and December 31, 2015, respectively, with liquidation preferences of $1,715 and $0 at September 30, 2016 and December 31, 2015, respectively
Series I-2 Convertible Preferred stock, $0.001 par value, 4,310 and 0 shares authorized at September 30, 2016 and December 31, 2015, respectively, 4,310 and 0 issued and outstanding at September 30, 2016 and December 31, 2015, respectively, with liquidation preferences of $4,310 and $0 at September 30, 2016 and December 31, 2015, respectively
Common stock, $0.001 par value, 120,000,000 and 720,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively, 3,618,694 and 2,808,598 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively 4 3
Additional paid-in capital 101,040 98,970
Accumulated deficit (100,624) (97,384)
Total stockholders' equity 425 1,594
Total liabilities and stockholders' equity $7,540 $7,138

International Stem Cell Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2016 2015 2016 2015
Revenues
Product sales$1,943 $2,136 $5,475 $5,573
Total revenue 1,943 2,136 5,475 5,573
Expenses
Cost of sales 606 565 1,489 1,499
Research and development 679 508 2,110 2,193
Selling and marketing 605 712 1,904 1,968
General and administrative 1,315 973 3,650 3,438
Total expenses 3,205 2,758 9,153 9,098
Loss from operating activities (1,262) (622) (3,678) (3,525)
Other income (expense)
Change in fair value of warrant liability 1,676 87 11,273 2,468
Fair value of warrant liability in excess of proceeds (9,902)
Financing transaction costs (928)
Interest expense (4) (6) (7)
Warrant modification expense (40)
Sublease income 1
Miscellaneous income 1
Total other income (expense), net 1,676 83 438 2,422
Income (loss) before income taxes 414 (539) (3,240) (1,103)
Provision for income taxes
Net income (loss)$414 $(539) $(3,240) $(1,103)
Net income (loss) applicable to common stockholders$414 $(539) $(3,240) $(1,103)
Net income (loss) per common share-basic$0.12 $(0.27) $(1.07) $(0.61)
Net income (loss) per common share-diluted$(0.30) $(0.28) $(1.37) $(1.69)
Weighted average shares-basic 3,330 1,962 3,015 1,801
Weighted average shares-diluted 3,663 2,218 4,210 2,117


Contacts: International Stem Cell Corporation Russell Kern, PhD Executive Vice President Phone: 760-940-6383 Email: ir@intlstemcell.com Media: Alex Fudukidis Phone: (646) 942-5632 Email: alex.fudukidis@russopartnersllc.com Tony Russo, Ph.D. Phone: (212) 845-4251 Email: tony.russo@russopartnersllc.com

Source:International Stem Cell Corporation