International Stem Cell Corporation (OTCBB:ISCO) announced on December
30 that it had received the first $1 million tranche of an anticipated
private equity financing of up to $5 million to be funded over the next
several months. Officials of the Company commented today on the
significance of that funding.
"This is a first major step toward the Company's goal of becoming
financially self-sufficient," said Kenneth Aldrich, CEO of the Company.
Mr. Aldrich noted that the anticipated $5 million of funding is targeted
toward three objectives: (1) eliminating $1 million of outstanding
secured debt; (2) supporting critical first quarter pre-clinical trials
that could be instrumental in enabling corporate joint venture
financing; and (3) providing marketing and expansion capital designed to
increase revenues from the Company's "Lifeline" subsidiary, which makes
and sells specialty cells and growth media.
"Although additional financing will be needed in 2009 to reach our goal,
we believe our Lifeline subsidiary has the ability to bring the company
to profitability within 2 years and support the clinical research of the
company thereafter," said Jeffrey Janus, President and Chief Operating
Officer of ISCO and CEO of its Lifeline subsidiary.
The current financing is in the form of a new class of Convertible
Preferred Stock, convertible into common stock at $0.25/share. The new
Preferred Stock carries an initial dividend of 10% per annum, reducing
to 6% in two years, payable quarterly. The sale of the Preferred is
scheduled to close on the following schedule: (1) $1,000,000 was funded
December 30, 2008; (2) subject to determination by the Investors that
there has been no material adverse event with respect to the Company,
$1,000,000 will be funded February 5, 2009; and (3) at the Investors'
discretion, three additional tranches of $1,000,000 each will be funded
on March 20, 2009, June 30, 2009 and September 20, 2009. "Because our
Investors will be actively involved with current management in operating
the company, with opportunity to participate in all critical decisions,
we expect that all tranches will be funded as scheduled," said Mr.
Aldrich.
Pursuant to the terms of the financing agreement, on December 30, 2008
the Company appointed Mr. Andrei Semechkin (as the designee of the
holders of Series D Preferred) to the Board of Directors for a term that
expires at the next annual meeting of stockholders, and entered into an
Employment Agreement with Mr. Semechkin. Because the financing agreement
provides for the size of the Board to remain at seven directors,
Mr. Edward O. Hunter resigned from the Board, but will continue to serve
the Company as a member of the Company's Financial Advisory Board.
"Mr. Semechkin will add extensive business and international experience
to our Board, and, although we will greatly miss Mr. Hunter's direct
participation on the Board itself, his willingness to maintain a high
level of involvement with the Company will mean we have not lost the
benefit of his experience and wisdom," said Mr. Aldrich.
Further details are available in the Company's Form 8-K to be filed with
the SEC January 5, 2009.
ISCO is the creator and developer of a new class of stem cells that
remove two of the greatest barriers to the therapeutic use of stem
cells: 1) immune rejection and 2) the ethical issues that surround the
use of embryonic stem cells. ISCO makes its cells available to qualified
researchers worldwide, and its technology, called "Parthenogenesis",
results in the creation of cell lines that may allow cells to be matched
to hundreds of millions of people without destroying a viable human
embryo.
ABOUT INTERNATIONAL STEM CELL CORPORATION (ISCO.OB):
International Stem Cell Corporation is a California biotechnology
company focused on developing therapeutic and research products. ISCO's
technology, Parthenogenesis, results in the creation of
pluripotent human stem cell lines from unfertilized human eggs. ISCO
scientists have created the first Parthenogenetic homozygous stem
cell line (phSC-Hhom-4) that can be a source of therapeutic cells
that will minimize immune rejection after transplantation into hundreds
of millions of individuals of differing sexes, ages and racial groups.
These advancements offer the potential to create the first true "Stem
Cell Bank" and address ethical issues by eliminating the need to use or
destroy fertilized embryos. ISCO also produces and markets specialized
cells and growth media worldwide for therapeutic research through its
subsidiary Lifeline Cell Technology. For more information, visit the
ISCO website at: www.internationalstemcell.com.
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FORWARD-LOOKING STATEMENTS: Statements pertaining to anticipated future financial and/or
operating results, future growth in research, technology, clinical
development and potential joint venture and other opportunities for the
company and its subsidiary, 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, uncertainty in the results of
clinical trials or 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 these forward-looking statements.
International Stem Cell Corporation Kenneth C. Aldrich, Chairman,
CEO, 760-940-6383 kaldrich@intlstemcell.com William
Adams, Chief Financial Officer, 760-940-6383 wadams@intlstemcell.com or The
Investor Relations Group Adam S. Holdsworth, 212-825-3210 (Investor
Relations) Laura Colontrelle, 212-825-3210 (Media Relations) lcolontrelle@investorrelationsgroup.com |