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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

International Stem Cell Corporation Announces Operating Results for the Quarter Ended March 31, 2019

May 17, 2019

CARLSBAD, Calif., May 17, 2019 (GLOBE NEWSWIRE) -- International Stem Cell Corporation (OTCQB:ISCO) ( www.internationalstemcell.com ) (“ISCO” or “the Company”), a California-based clinical stage biotechnology company developing novel stem cell-based therapies and biomedical products, today provided a business update announcing operating results for the three months ended March 31, 2019.

“In Q1 2019 we recently achieved a major milestone in the world’s first approved human pluripotent stem cell-based clinical trial for the treatment of Parkinson’s disease. We completed enrollment and treatment of all patients with our lead therapeutic product ISC-hpNSC® cells. Based on the available data, we believe that the therapy is safe and well tolerated, meeting the primary endpoint of the phase 1 clinical trial. In connection with the conclusion of the treatment phase of the study, we anticipate the clinical trial-related expenses to significantly decrease,” commented Andrey Semechkin, PhD., CEO and Co-Chairman of ISCO.

Q1 2019 Financial Highlights

-- Consolidated revenue for the first quarter of 2019 was $2.2 million, a decrease of 15% compared to the consolidated revenue of $2.6 million for the first quarter of 2018. -- Combined operating income for the quarter ended March 31, 2019 from our two wholly owned revenue generating subsidiaries was $169,000, a decrease of 73% compared to $631,000 in the first quarter of 2018. -- Net loss for ISCO was $906,000 for the first quarter of 2019 compared to a net loss of $830,000 million for the first quarter in 2018, an increase of 9 %.

Recent Clinical Trial Highlights

-- ISCO completed subject enrollment in its phase 1 clinical trial of ISC-hpNSC® for the treatment of Parkinson’s disease. The fourth subject of the third cohort, who was the twelfth and final subject of the phase 1 clinical study, was successfully transplanted with the highest dose of ISC-hpNSC® cells. -- Presented interim clinical results at the American Academy of Neurology annual meeting in Philadelphia, PA.

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 ).

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Safe harbor statement

Statements pertaining to anticipated developments and company achievements, expected clinical studies (including timing and results), anticipated protection from patents, and trends in clinical trial related expenses, 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 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 and par value)

March 31, December 31, 2019 2018 ---------- ---------- Assets (Unaudited) Cash $ 615 $ 1,075 Accounts receivable, net of allowance for doubtful accounts of $12 957 651 Inventory, net 1,460 1,501 Prepaid expenses and other current assets 480 543 - -------- - -------- Total current assets 3,512 3,770 Non-current inventory 792 805 Property and equipment, net 652 469 Intangible assets, net 2,700 2,674 Right-of-use asset 933 — Deposits and other assets 74 78 - -------- - -------- Total assets $ 8,663 $ 7,796 - -------- - -------- Liabilities and Stockholders’ Equity Accounts payable $ 806 $ 458 Accrued liabilities 959 579 Operating lease liability, current 294 — Related party payable 1,009 2,045 Advances 250 250 Fair value of warrant liability 1,148 1,745 - -------- - -------- Total current liabilities 4,466 5,077 Long-term deferred rent — 182 Operating lease liability, net of current portion 1,011 — - -------- - -------- Total liabilities 5,477 5,259 - -------- - -------- 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 $415 and $411 at March 31, — — 2019 and December 31, 2018, 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, 5 5 issued and outstanding, with liquidation preference of $5,000 Series I-1 Convertible Preferred stock, $0.001 par value, 2,000 shares authorized, 814 issued and — — outstanding, with liquidation preferences of $814 Series I-2 Convertible Preferred stock, $0.001 par value, 4,310 shares authorized, — — issued and outstanding with liquidation preference of $4,310 Common stock, $0.001 par value, 120,000,000 shares authorized, 7,533,083 and 6,933,861 shares 8 7 issued and outstanding at March 31, 2019 and December 31, 2018, respectively Additional paid-in capital 110,742 109,188 Accumulated deficit (107,569 ) (106,663 ) - -------- - -------- Total stockholders’ equity 3,186 2,537 - -------- - -------- Total liabilities and stockholders’ equity $ 8,663 $ 7,796 - -------- - --------

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

Three Months Ended March 31, -------------------- 2019 2018 -------- -------- Revenues Product sales $ 2,218 $ 2,633 - ------ - ------ Total revenues 2,218 2,633 - ------ - ------ Expenses Cost of sales 841 825 Research and development 653 811 Selling and marketing 692 708 General and administrative 1,521 1,474 - ------ - ------ Total expenses 3,707 3,818 - ------ - ------ Loss from operations (1,489 ) (1,185 ) - ------ - ------ Other income (expense) Change in fair value of warrant liability 597 355 Interest expense (14 ) (2 ) Miscellaneous income — 2 - ------ - ------ Total other income (expense), net 583 355 - ------ - ------ Loss before provision for income taxes (906 ) (830 ) Provision for income taxes — — - ------ -------- Net loss $ (906 ) $ (830 ) - ------ - ------ Net loss applicable to common $ (906 ) $ (830 ) stockholders - ------ - ------ Net loss per common share-basic $ (0.12 ) $ (0.14 ) - ------ - ------ Net (loss) per common share-diluted $ (0.12 ) $ (0.14 ) - ------ - ------ Weighted average shares-basic 7,400 6,136 - ------ - ------ Weighted average shares-diluted 7,400 6,136 ----------------------------------------- - ------ - ------

Contacts:

International Stem Cell CorporationRussell A. Kern, PhDPhone: 760-940-6383Email: ir@intlstemcell.com

Joe Green Investor Relations Edison Inc. jgreen@edisongroup.com +1 (646) 653-7030