SOURCE: International Stem Cell Corporation

International Stem Cell Corporation

November 16, 2015 08:30 ET

International Stem Cell Corporation Announces Operating Results for the Three- and Nine-Months Ended September 30, 2015

CARLSBAD, CA--(Marketwired - November 16, 2015) - 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, 2015.

"Overall I am satisfied with the Company's progress in Q3. We are maintaining our position as a leader in regenerative medicine field and the overall operating income of our biomedical businesses continues to grow," said Andrey Semechkin, Ph.D., CEO and Co-Chairman of ISCO. "We really look forward to beginning the enrolment of patients in our pending Parkinson's Disease clinical trial before the end of 2015."

Third Quarter 2015 Business Highlights

  • Developed a robust innovative technology designed to generate functional articular cartilage from the patient's own skin or adipose tissue with the potential to treat osteoarthritis.
  • Entered into the second phase of the existing research agreement with Rohto Pharmaceutical Co., Ltd., a global Japanese pharmaceutical company.
  • Presented comprehensive findings from Parkinson's disease program at the Society for Neuroscience Annual Meeting, Neuroscience 2015.
  • Named Ms. Mahnaz Ebrahimi as Chief Financial Officer.
  • Completed clinical testing of a new compound, which the Company intends to utilize in substantially new skin care products to be marketed by the Company's wholly-owned subsidiary Lifeline Skin Care, Inc. starting December 2015.
  • Lifeline Skin Care launched its ProPlus+ professional line of products that will be available exclusively through Lifeline's network of dermatologists, aestheticians and med spas.

Third Quarter 2015 Financial Highlights

  • Total consolidated revenue for the third quarter of 2015 was $2.14 million, an increase of $173,000, or 9%, compared to the third quarter of 2014 of $1.96 million.
    • Lifeline Cell Technology sales increased by 22%, or $220,000, and
    • Lifeline Skin Care sales decreased by 5%, or $47,000
  • Both of wholly-owned Company subsidiaries remain profitable.
  • Consolidated net loss for the third quarter of 2015 was $539,000, compared to consolidated net loss of $2.0 million for the third quarter of 2014.

Year-to-Date Financial Highlights:

  • Total consolidated revenue for the nine months ended September 30, 2015 was $5.57 million, an increase of $373,000, or 7%, compared to the nine months ended September 30, 2014 of $5.20 million.
    • Lifeline Cell Technology sales increased by 9%, or $244,000, and
    • Lifeline Skin Care sales decreased by 5%, or $129,000
  • Consolidated net loss for the nine months ended September 30, 2015 was $1.1 million compared to consolidated net loss of $7.9 million for the nine months ended September 30, 2014, partially due to the completion of our multiple preclinical studies during the first six months of 2015.

Balance Sheet Highlights:

  • The Company ended the third quarter of 2015 with cash balance of $599,000.
  • Stockholders' equity totaled $834,000 as of September 30, 2015.

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, 
   2015   2014 
Assets  (Unaudited)      
 Cash and cash equivalents   599   $1,111  
 Accounts receivable, net of allowance for doubtful accounts of $18 and $19 at September 30, 2015 and December 31, 2014, respectively   615    453  
 Inventory, net   1,874    1,517  
 Prepaid expenses and other current assets   505    485  
 Restricted cash   -    50  
  Total current assets   3,593    3,616  
 Property and equipment, net   459    714  
 Intangible assets, net   3,121    2,795  
 Deposits and other assets   57    54  
  Total assets  $7,230   $7,179  
Liabilities and Stockholders' Equity           
 Accounts payable  $526   $670  
 Accrued liabilities   1,373    1,711  
 Related party payable   2,893    11  
 Advances   250    250  
 Fair value of warrant liability   1,354    4,216  
  Total current liabilities   6,396    6,858  
Commitments and contingencies           
Stockholders' Equity           
Series B Convertible Preferred stock, $0.001 par value, 5,000,000 shares authorized, 300,000 issued and outstanding, with liquidation preferences of $435 and $421 at September 30, 2015 and December 31, 2014, 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 H-1 Convertible Preferred stock, $0.001 par value, 2,000 shares authorized, 0 and 1,482 issued and outstanding at September 30, 2015 and December 31, 2014, respectively   -    -  
Series H-2 Convertible Preferred stock, $0.001 par value, 500 shares authorized, issued and outstanding   -    -  
Common stock, $0.001 par value, 720,000,000 shares authorized, 2,147,773 and 1,596,195 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively (1)   2    2  
Additional paid-in capital   96,679    95,063  
Accumulated deficit   (95,852 )  (94,749 )
  Total stockholders' equity   834    321  
  Total liabilities and stockholders' equity  $7,230   $7,179  

(1) All common shares and per share amounts reported have been adjusted for the 150-for-1 reverse stock split effected on July 29, 2015.

  
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, 
   2015   2014   2015   2014 
Revenues                     
 Product sales  $2,136   $1,963   $5,573   $5,200  
  Total revenue   2,136    1,963    5,573    5,200  
Expenses                     
 Cost of sales   565    518    1,499    1,366  
 Research and development   508    1,392    2,193    3,761  
 Selling and marketing   712    745    1,968    2,093  
 General and administrative   973    1,342    3,438    4,322  
  Total expenses   2,758    3,997    9,098    11,542  
Loss from operating activities   (622 )  (2,034 )  (3,525 )  (6,342 )
Other income (expense)                     
 Change in fair value of warrant liability   87    -    2,468    1,894  
 Warrant exchange inducement expense   -    -    -    (3,445 )
 Miscellaneous   -    (8 )  -    (8 )
 Interest expense   (4 )  -    (7 )  (2 )
 Warrant modification expense   -    -    (40 )  -  
 Sublease income   -    8    1    24  
  Total other income (expense), net   83    -    2,422    (1,537 )
Loss before income taxes   (539 )  (2,034 )  (1,103 )  (7,879 )
Provision for income taxes   -    -    -    -  
  Net loss  $(539 ) $(2,034 ) $(1,103 ) $(7,879 )
Net loss applicable to common stockholders  $(539 ) $(2,034 ) $(1,103 ) $(7,879 )
Net loss per common share-basic (1)  $(0.27 ) $(1.40 ) $(0.61 ) $(6.53 )
Net loss per common share-diluted (1)  $(0.28 ) $(1.40 ) $(1.69 ) $(6.53 )
Weighted average shares-basic (1)   1,962    1,456    1,801    1,207  
Weighted average shares-diluted (1)   2,218    1,456    2,117    1,207  

(1) All common shares and per share amounts reported have been adjusted for the 150-for-1 reverse stock split effected on July 29, 2015.

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