International Stem Cell Corporation (OTCBB: ISCO), a biotechnology company that developed a powerful new stem cell technology

called "parthenogenesis" which promises to significantly advance the field of regenerative medicine, today announced financial results for the quarter ended June 30, 2011 and for the first six months of the fiscal year and provided an update on corporate events. ISCO reported year-to-date revenues of $2.6 million compared to $0.7 million for the same time period in 2010, representing an increase of 271%. The increase in our revenues relates to sales generated by ISCO's wholly-owned subsidiaries Lifeline Skin Care (LSC) which contributed $1.7 million and Lifeline Cell Technology (LCT) which contributed $0.9 million of revenues. Total year-to-date expenses, excluding cost of sales increased $2.0 million or 38%, compared to the first six months of the previous year. The most significant reasons for the increase in total expenses related to increases in R&D and G&A. Research & Development expenses increased primarily due to increased activity on our scientific projects. General & Administrative expenses increased primarily due to increased headcount, non-cash stock-based compensation and increased expenses related to business development activity and general corporate expenses. Our cash balance at June 30, 2011 was $3.6 million. Net cash used in operating activities for the six months ended June 30, 2011 was $3.0 million. Second Quarter 2011 Highlights: -- The first U.S.-based donor was enrolled in ISCO's program to establish a bank of clinical-grade human parthenogenetic stem cells (hpSCs) capable of being immune-matched to millions of patients. -- We strengthened our senior management team to assist in the continued development of the Company. Kurt May was appointed Senior Vice President responsible for mergers and acquisitions and development of new international collaborations. Donna Queen was added to the management team as Vice President of LSC, where she is responsible for marketing and business development. -- We started a series of preclinical animal studies of neuronal cells derived from hpSCs. The studies will evaluate the in vivo safety and tumorigenicity of neuronal cells as well as their ability to develop into functioning dopaminergic neuron±like cells to treat Parkinson's disease. -- We successfully completed the first series of preclinical testing of hepatocytes derived from hpSCs. In the transplantation mouse model, inoculated cells were capable of engrafting and surviving in specific niches within the liver, and were further developing into cells with essential hepatocyte-like features. About International Stem Cell Corporation International Stem Cell Corporation is focused on the therapeutic applications of human parthenogenetic stem cells 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 parthenogenic, homozygous stem cell line that can be a source of therapeutic cells with minimal immune rejection after transplantation into hundreds of millions of individuals of differing genders, ages and racial background. This offers the potential to create the first true stem cell bank, UniStemCellŒ. ISCO also produces and markets specialized cells and growth media for therapeutic research worldwide through its subsidiary Lifeline Cell Technology, and cell-based skin care products through its subsidiary Lifeline Skin Care. More information is available atwww.internationalstemcell.com. To subscribe to receive ongoing corporate communications, please click on the following link: http://www.b2i.us/irpass.asp?BzID=1468&to=ea&s=0.

International Stem Cell Corporation and Subsidiaries (A Development Stage Company) Condensed Consolidated Statements of Financial Condition June 30, 2011 (Unaudited) Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses and other current assets Total current assets Property and equipment, net Patent licenses, net Deposits and other assets Total assets Liabilities and Stockholders' Equity Accounts payable Accrued expenses Deferred revenue Advances Warrants to purchase common stock Total current liabilities Commitments and contingencies Stockholders' Equity Common stock, $.001 par value, 200,000,000 shares authorized, 76,599,928 shares and 74,771,107 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively Convertible preferred stock, $.001 par value, 20,000,000 shares authorized, 2,800,043 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively Subscription receivable on common stock Additional paid-in capital Deficit accumulated during the development stage Total stockholders' equity Total liabilities and stockholders' equity $ 3,581,933 341,666 1,329,433 290,196 5,543,228 1,495,916 1,056,562 16,279 $ 8,111,985 $ 1,032,531 855,315 137,834 250,000 1,027,171 3,302,851 $ 5,782,027 738,506 856,083 228,338 7,604,954 1,295,328 986,714 39,812 $ 9,926,808 $ 582,824 545,781 759,667 250,000 2,399,605 4,537,877 December 31, 2010 (Restated)(1)

76,600

74,771

2,800 59,780,363 (55,050,629 ) 4,809,134 $ 8,111,985

2,800 (4,875 ) 56,170,006 (50,853,771 ) 5,388,931 $ 9,926,808

The Company restated its financial statements for the year ended December 31, 2010, and the (1) quarter ended March 31, 2011. International Stem Cell Corporation and Subsidiaries (A Development Stage Company) Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, 2011 2010 Six Months Ended June 30, 2011 2010 Inception (August 2001)

(Restated)(1) (Restated)(1) (Restated)(1) through June 30, 2011 (Restated)(1) Revenues Product sales Royalties and license Total revenue Development expenses Cost of sales Research and development Marketing General and administrative Total development expenses Loss from development activities Other income (expense) Settlement with related company Miscellaneous expense Dividend income Interest expense Sublease income Change in market value of warrants Total other income (expense) Income (loss) before income taxes Provision for income taxes Net income (loss) Dividends on preferred stock Net income (loss) attributable to common stockholders Basic earnings per common share $ 1,114,309 $ 1,114,309 $ 441,118 $ 441,118 $ 2,629,225 $ 2,629,225 $ 713,744 $ 713,744 $ 5,728,390 135,000 $ 5,863,390

362,131 1,128,869 345,800 2,135,732 3,972,532

214,330 754,000 291,576 2,033,615 3,293,521

791,125 2,132,279 664,006 4,368,470 7,955,880

360,706 1,338,069 424,994 3,408,821 5,532,590

2,506,597 15,992,557 3,063,155 27,692,292 49,254,601

(2,858,223 )

(2,852,403 )

(5,326,655 )

(4,818,846 )

(43,391,211 )

(12,040 2,450 478,669 469,079 )

(256 350 (6,805 2,125 7,083,365 7,078,779 ) )

(11,140 4,650 1,349,518 1,343,028 )

(20,649 25,999 (14,079 3,525 ) )

(92,613 (28,652

) )

92,875 (2,225,074 ) 303,083 (2,380,664 ) (4,331,045 )

(1,347,960 ) (1,353,164 )

(2,389,144 ) -

4,226,376 -

(3,983,627 ) -

(6,172,010 ) -

(47,722,256 ) 6,800

$ (2,389,144 ) $ 4,226,376 $ (107,203 ) $-

$ (3,983,627 ) $ (6,172,010 ) $ (47,729,056 ) $ (213,231 ) $ (1,238,067 ) $ (7,751,380 )

$ (2,496,347 ) $ 4,226,376

$ (4,196,858 ) $ (7,410,077 ) $ (55,480,436 )

$ (0.03

) $ 0.06 ) $ 0.04

$ (0.06 $ (0.06

) $ (0.11 ) $ (0.11

) )

Diluted earnings $ (0.03

per common share Share used in per share calculations: Weighted average shares outstanding Weighted average shares outstanding on a Fully Diluted Basis (1)

76,340,016

68,676,504

75,842,071

64,789,250

76,340,016

114,797,830

75,842,071

64,789,250

The Company restated its financial statements for the year ended December 31, 2010, and the quarter ended March 31, 2011.

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