Nov 15, 2011 |
International Stem Cell Corporation Announces Third Quarter 2011 Financial Results |
International Stem Cell Corporation (ISCO) (OTCBB:ISCO) today announced
financial results for the three-month and nine-month periods ended
September 30, 2011. ISCO is a development-stage biotechnology company
that created, patented and is commercializing a powerful new stem cell
technology called parthenogenesis which promises to advance
significantly the field of regenerative medicine.
ISCO reported revenue of $0.84 million for the quarter ended September
30, 2011, a 141% increase from the same period of the prior year. For
the nine months ended September 30, 2011, the Company reported revenue
of $3.47 million, a year-over-year increase of 227%. The increases in
revenue was driven by strong sales from the initial launch of ISCO's
wholly-owned subsidiary Lifeline Skin Care (LSC), which commenced
operations in the fourth quarter of 2010. In addition, steady growth in
sales from ISCO's other wholly-owned subsidiary, Lifeline Cell
Technology (LCT), contributed to the increases in revenues for both
periods.
The Company continued to invest in the development of new technologies,
products and channels of distribution. For the three months ended
September 30, 2011, development expenses, excluding cost of sales, were
$3.60 million, an increase of 15% compared to the third quarter of 2010,
reflecting increased R&D activities on therapeutic programs and new
product development for both subsidiaries. Sales and marketing expenses
related to our skin care products, partially offset by a reduction in
general and administration expenses, also contributed to the increase in
development expenses.
For the nine months ended September 30, 2011, development expenses,
excluding cost of sales, were $10.77 million, an increase of 30% when
compared with the prior year period. The increase is attributed
primarily to increased research activities on therapeutic products and
product development programs for LSC and LCT, increased stock-based
compensation expense, increased headcount and higher general corporate
expenses coupled with increased sales and marketing expenses related to
our skin care products.
Dr. Andrey Semechkin, co-Chairman and CEO, commented, "We are pleased
with the rapid growth in sales of our two subsidiaries, LSC and LCT.
Together, these business units are providing much-needed capital to help
support our growth as well as the research leading to the development of
new stem cell technologies and products." Kurt May, President and COO,
noted, "Our focus continues to be on maximizing the performance of our
operating subsidiaries, advancing the development and commercialization
of our therapeutic products and strengthening our organization and
operating systems to accommodate our anticipated rapid and significant
growth."
Third Quarter 2011 Highlights:
Important developments and milestones for International Stem Cell in the
third quarter included:
-- Continuing to solidify its leadership team with the addition of Linh
Nguyen as ISCO's new Chief Financial Officer. Further, the Board of
Directors elevated Kurt May to President and Chief Operating Officer and
Dr. Semechkin to co-Chairman of the Board and Chief Executive Officer.
-- Renewing the marketing agreement with John Mauldin to promote its
Lifeline Skin Care products and commenced a new sales channel to resorts
and destination spas.
-- Lifeline Cell Technology began selling products through new
distribution channels in Japan, Korea, Singapore, Malaysia and
Indonesia, expanding its business throughout Asia.
-- ISCO scientists successfully completed the first series of
preclinical studies designed to support the application of neuronal
cells derived from hpSCs. These experiments were designed to demonstrate
that the derived neuronal cells were able to survive in mouse brains
without giving rise to tumors.
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 parthenogenic, 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, and cell-based skin care products
through its subsidiary Lifeline Skin Care. More information is available
at www.internationalstemcell.com.
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Forward-looking Statements
Statements pertaining to anticipated developments, anticipated sales
growth 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 and the management of
collaborations, 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.
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| | International Stem Cell Corporation and Subsidiaries (A Development Stage Company) Condensed Consolidated Statements of Financial Condition | | | | | | | | | | |
| | | | | September 30, 2011 | | | | | | December 31, 2010 (Restated)(1) | | | | | (Unaudited) | | | | | | | Assets | | | | | | | | | | |
Cash and cash equivalents
| | | |
$
|
2,584,396
| | | | | | |
$
|
5,782,027
| |
Accounts receivable
| | | | |
246,269
| | | | | | | |
738,506
| |
Inventory
| | | | |
1,496,723
| | | | | | | |
856,083
| |
Prepaid expenses and other current assets
| | | |
|
283,951
|
| | | | | |
|
228,338
|
|
Total current assets
| | | | |
4,611,339
| | | | | | | |
7,604,954
| |
Property and equipment, net
| | | | |
1,517,297
| | | | | | | |
1,295,328
| |
Patent licenses, net
| | | | |
1,179,857
| | | | | | | |
986,714
| |
Deposits and other assets
| | | |
|
16,279
|
| | | | | |
|
39,812
|
| Total assets | | | |
$
|
7,324,772
|
| | | | | |
$
|
9,926,808
|
| | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | |
Accounts payable
| | | |
$
|
619,422
| | | | | | |
$
|
582,824
| |
Accrued expenses
| | | | |
667,363
| | | | | | | |
545,781
| |
Deferred revenue
| | | | |
187,311
| | | | | | | |
759,667
| |
Advances
| | | | |
250,000
| | | | | | | |
250,000
| |
Warrants to purchase common stock
| | | |
|
465,028
|
| | | | | |
|
2,399,605
|
|
Total current liabilities
| | | |
|
2,189,124
|
| | | | | |
|
4,537,877
|
| | | | | | | | | | |
| | | | | | | | | | |
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Commitments and contingencies
| | | | | | | | | | | | | | | | | | | | |
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Stockholders' Equity
| | | | | | | | | | |
Common stock, $.001 par value, 200,000,000 shares authorized,
79,303,415 shares and 74,771,107 shares issued and outstanding at
September 30, 2011 and December 31, 2010, respectively
| | | | |
79,303
| | | | | | | |
74,771
| |
Convertible preferred stock, $.001 par value, 20,000,000 shares
authorized, 2,800,043 shares issued and outstanding at September
30, 2011 and December 31, 2010, respectively
| | | | |
2,800
| | | | | | | |
2,800
| |
Subscription receivable on common stock
| | | | |
0
| | | | | | | |
(4,875
|
)
|
Additional paid-in capital
| | | | |
62,776,501
| | | | | | | |
56,170,006
| |
Deficit accumulated during the development stage
| | | |
|
(57,722,956
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)
| | | | | |
|
(50,853,771
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)
| Total stockholders' equity | | | |
|
5,135,648
|
| | | | | |
|
5,388,931
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| Total liabilities and stockholders' equity | | | |
$
|
7,324,772
|
| | | | | |
$
|
9,926,808
|
| | | | | | | | | | |
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(1)
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The Company restated its financial statements for the year ended
December 31, 2010, and the quarter ended March 31, 2011.
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| | International Stem Cell Corporation and Subsidiaries (A Development Stage Company) Condensed Consolidated Statements of Operations (Unaudited) | | | | | | | | | | | | | | | | | | | | |
| | | | | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | | | Inception (August 2001) through September
30, 2011 (Restated)(1) | | | | | 2011 | | | | 2010 (Restated)(1) | | | | 2011 (Restated)(1) | | | | 2010 (Restated)(1) | | | | Revenues | | | | | | | | | | | | | | | | | | | | |
Product sales
| | | |
$
|
842,059
| | | | |
$
|
348,984
| | | | |
$
|
3,471,284
| | | | |
$
|
1,062,728
| | | | |
$
|
6,570,449
| |
Royalties and license
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
135,000
|
|
Total revenue
| | | |
$
|
842,059
|
| | | |
$
|
348,984
|
| | | |
$
|
3,471,284
|
| | | |
$
|
1,062,728
|
| | | |
$
|
6,705,449
|
| | | | | | | | | | | | | | | | | | | | |
| Development expenses | | | | | | | | | | | | | | | | | | | | |
Cost of sales
| | | | |
360,716
| | | | | |
149,573
| | | | | |
1,151,841
| | | | | |
510,279
| | | | | |
2,912,143
| |
Research and development
| | | | |
1,129,746
| | | | | |
714,392
| | | | | |
3,262,025
| | | | | |
2,052,461
| | | | | |
17,077,473
| |
Marketing
| | | | |
364,930
| | | | | |
22,486
| | | | | |
1,028,936
| | | | | |
447,480
| | | | | |
3,428,085
| |
General and administrative
| | | |
|
2,107,885
|
| | | |
|
2,402,675
|
| | | |
|
6,476,355
|
| | | |
|
5,811,496
|
| | | |
|
29,800,177
|
| Total development expenses | | | |
|
3,963,277
|
| | | |
|
3,289,126
|
| | | |
|
11,919,157
|
| | | |
|
8,821,716
|
| | | |
|
53,217,878
|
| Loss from development activities | | | |
|
(3,121,218
|
)
| | | |
|
(2,940,142
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)
| | | |
|
(8,447,873
|
)
| | | |
|
(7,758,988
|
)
| | | |
|
(46,512,429
|
)
| | | | | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | | | | | |
Settlement with related company
| | | | |
-
| | | | | |
-
| | | | | |
-
| | | | | |
-
| | | | | |
(92,613
|
)
|
Miscellaneous expense
| | | | |
(4,589
|
)
| | | | |
(1,069
|
)
| | | | |
(15,729
|
)
| | | | |
(21,718
|
)
| | | | |
(33,241
|
)
|
Dividend income
| | | | |
-
| | | | | |
1,124
| | | | | |
-
| | | | | |
27,123
| | | | | |
92,875
| |
Interest expense
| | | | |
-
| | | | | |
-
| | | | | |
-
| | | | | |
(14,079
|
)
| | | | |
(2,225,074
|
)
|
Sublease income
| | | | |
3,000
| | | | | |
2,100
| | | | | |
7,650
| | | | | |
5,625
| | | | | |
306,083
| |
Change in market value of warrants
| | | |
|
558,864
|
| | | |
|
(81,296
|
)
| | | |
|
1,908,382
|
| | | |
|
(1,429,256
|
)
| | | |
|
(1,821,800
|
)
|
Total other income (expense)
| | | |
|
557,275
|
| | | |
|
(79,141
|
)
| | | |
|
1,900,303
|
| | | |
|
(1,432,305
|
)
| | | |
|
(3,773,770
|
)
| | | | | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | | |
(2,563,943
|
)
| | | | |
(3,019,283
|
)
| | | | |
(6,547,570
|
)
| | | | |
(9,191,293
|
)
| | | | |
(50,286,199
|
)
|
Provision for income taxes
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
-
|
| | | |
|
6,800
|
| Net income loss | | | |
$
|
(2,563,943
|
)
| | | |
$
|
(3,019,283
|
)
| | | |
$
|
(6,547,570
|
)
| | | |
$
|
(9,191,293
|
)
| | | |
$
|
(50,292,999
|
)
| | | | | | | | | | | | | | | | | | | | |
|
Dividends on preferred stock
| | | |
$
|
(108,384
|
)
| | | |
$
|
(14,300
|
)
| | | |
$
|
(321,615
|
)
| | | |
$
|
(1,252,367
|
)
| | | |
$
|
(7,859,764
|
)
|
Net loss attributable to common stockholders
| | | |
$
|
(2,672,327
|
)
| | | |
$
|
(3,033,583
|
)
| | | |
$
|
(6,869,185
|
)
| | | |
$
|
(10,443,660
|
)
| | | |
$
|
(58,152,763
|
)
| Basic loss per common share | | | |
$
|
(0.03
|
)
| | | |
$
|
(0.04
|
)
| | | |
$
|
(0.09
|
)
| | | |
$
|
(0.16
|
)
| | | | | Diluted loss per common share | | | |
$
|
(0.03
|
)
| | | |
$
|
(0.04
|
)
| | | |
$
|
(0.09
|
)
| | | |
$
|
(0.16
|
)
| | | | | Share used in per share calculations: | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding
| | | |
|
77,801,712
|
| | | |
|
71,907,000
|
| | | |
|
76,487,400
|
| | | |
|
67,187,905
|
| | | | |
Weighted average shares outstanding on a fully diluted basis
| | | |
|
77,801,712
|
| | | |
|
71,907,000
|
| | | |
|
76,487,400
|
| | | |
|
67,187,905
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
(1)
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The Company restated its financial statements for the year ended
December 31, 2010 and the quarter ended March 31, 2011.
|
International Stem Cell Corporation Andrey
Semechkin, CEO & Co-Chairman 760-940-6383 aes@intlstemcell.com or Kurt
May, President & COO 760-710-3294 kmay@intlstemcell.com or Linh
Nguyen, CFO 760-940-6383 LNguyen@intlstemcell.com or Lippert/Heilshorn
& Associates Don Markley 310-691-7100 dmarkley@lhai.com |
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