May 16, 2012 |
International Stem Cell Corp Announces First Quarter 2012 Financial Results and Business Highlights |
International Stem Cell Corporation (OTCBB: ISCO) (www.internationalstemcell.com)
today announced financial results for the three months ended March 31,
2012.
Three Months ended March 31, 2012
Consolidated net revenues for the three months ended March 31, 2012 were
$1.08 million compared to $1.52 million in the corresponding period a
year ago. The year-over-year decrease in revenues is due to fewer sales
generated from the Lifeline Skin Care (LSC) direct sales channel,
partially offset by higher Lifeline Cell Technology (LCT) sales
generated from larger distributors. LSC and LCT accounted for 51% and
49% of total revenue in the three months ended March 31, 2012 compared
to 75% and 25%, respectively, in the comparable period a year ago.
For the three months ended March 31, 2012, development expenses were
$3.80 million, representing a decrease of approximately 5% compared to
the corresponding period in 2011. The decrease primarily reflects lower
general and administrative expenses resulting from decreased stock-based
compensation expense and lower laboratory-related expenses. The decrease
was partially offset by higher cost of sales ratio resulting from
increased sales concentration of lower margin products, and higher
marketing and selling expense related to LSC. The Company continued to
invest in its sales and marketing infrastructure, including significant
enhancements to the e-commerce platforms, increased advertising and
strengthening the sales and customer service organization.
Cash and cash equivalents at March 31, 2012 were $6.01 million compared
to $1.34 million at December 31, 2011, reflecting an increase of $4.67
million resulting from two financing transactions including the issuance
of shares of Series G preferred stock for $5.00 million and issuance of
shares of common stock for a total of $2.08 million in the first quarter
of 2012.
Q1 2012 Business Highlights:
The Company continued to focus its research and development efforts on
the creation of additional parthenogenetic stem cell lines for
therapeutic use and on the advancement of the disease area research
programs, particularly pre-clinical in vivo safety and efficacy
studies in Parkinson's disease and new methods for high-throughput cell
culture and stem cell differentiation.
ISCO's wholly-owned subsidiary Lifeline Skin Care drove sales by
expanding acquisition of both retail and trade customers, increasing the
average order value and enhancing customer loyalty and retention. New
retail customers were attracted by an increased social media presence
and national exposure on TV shows such as ABC's "The Talk" and the use
of risk-free introductory offers and free sample promotions. In
addition, LSC continued to increase the number of strategic marketing
partnerships. Although LSC revenue for the quarter was lower than the
same period in 2011, the sales were generated from more diversified
sources with much greater growth potential and reduced reliance on
individual third parties.
Lifeline Cell Technology, ISCO's wholly-owned subsidiary specialized in
cells and media research products, grew revenue across all three sales
channels including domestic, international and OEM, showing a 39%
increase over the same quarter of 2011.
The overall financial position of the company was significantly
improved. ISCO increased its liquidity by securing a total $7.03 million
of capital through equity financing transactions in the first quarter of
2012.
Dr. Andrey Semechkin, ISCO's CEO and Co-Chairman, commented, "The first
quarter of this year has been a challenging one for ISCO. However, with
the significant improvement of our balance sheet position resulting from
the closing of the financings, coupled with the addition of Dr. Berglund
as a new independent director to our Board of Directors, I believe that
we have strengthened our foundation on which we can increase our
competitiveness. "
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 (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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on the following link: http://www.b2i.us/irpass.asp?BzID=1468&to=ea&s=0 Safe harbor statement
Statements pertaining to anticipated developments, potential sales
growth, new products and distribution channels 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 Balance Sheets (in thousands, except share data) | | | | | | | | | | |
| | | | | | | | | | |
| | | | March 31, 2012 | | | | December 31, 2011 | | | | | (Unaudited) | | | | | | Assets | | | | | | | | | | |
Cash and cash equivalents
| | |
$
|
6,013
| | | |
$
|
1,337
| |
Accounts receivable
| | | |
257
| | | | |
140
| |
Inventory, net
| | | |
1,228
| | | | |
1,268
| |
Prepaid expenses and other current assets
| | |
|
297
| | | |
|
274
| | | | | | | | | | | |
|
Total current assets
| | | |
7,795
| | | | |
3,019
| |
Property and equipment, net
| | | |
1,356
| | | | |
1,420
| |
Intangible assets, net
| | | |
1,419
| | | | |
1,282
| |
Deposits and other assets
| | |
|
16
| | | |
|
16
| | | | | | | | | | | |
| Total assets | | |
$
|
10,586
| | | |
$
|
5,737
| | | | | | | | | | | |
| Liabilities, Redeemable Preferred Stock and Stockholders' Equity | | | | | | | | | | |
Accounts payable
| | |
$
|
719
| | | |
$
|
777
| |
Accrued liabilities
| | | |
813
| | | | |
752
| |
Deferred revenue
| | | |
112
| | | | |
189
| |
Related party payable
| | | |
64
| | | | |
108
| |
Advances
| | | |
250
| | | | |
250
| |
Warrants to purchase common stock
| | |
|
-
| | | |
|
38
| | | | | | | | | | | |
|
Total current liabilities
| | |
|
1,958
| | | |
|
2,114
| | | | | | | | | | | |
|
Convertible Redeemable Series G Preferred stock, $0.001 par value
5,000,000 shares and 0 were authorized, issued and outstanding at
March 31, 2012 and December 31, 2011, respectively, liquidation
preferences of $5,018 and $0 at March 31, 2012 and December 31,
2011, respectively
| | | |
4,959
| | | | |
-
| |
Commitments and contingencies
| | | | | | | | | | |
Stockholders' Equity
| | | | | | | | | | |
Series D Preferred stock, $0.001 par value 50 shares authorized, 43
issued and outstanding at March 31, 2012 and December 31, 2011
| | | |
-
| | | | |
-
| |
Series A Preferred stock, $0.001 par value 5,000,000 shares
authorized, 0 and 500,000 issued and outstanding at March 31, 2012
and December 31, 2011, respectively, liquidation preferences of $0
and $615 at March 31, 2012 and December 31, 2011, respectively
| | | |
0
| | | | |
1
| |
Series B Preferred stock, $0.001 par value 5,000,000 shares
authorized, 300,000 issued and outstanding at March 31, 2012 and
December 31, 2011, liquidation preferences of $372 and $367 at March
31, 2012 and December 31, 2011, respectively
| | | |
0
| | | | |
0
| |
Series C Preferred stock, $0.001 par value 3,000,000 shares
authorized, 2,000,000 issued and outstanding at March 31, 2012 and
December 31, 2011, liquidation preferences of $2,420 and $2,387 at
March 31, 2012 and December 31, 2011, respectively
| | | |
2
| | | | |
2
| |
Common stock, $0.001 par value 200,000,000 shares authorized,
87,036,315 and 80,036,315 issued and outstanding at March 31, 2012
and December 31, 2011, respectively
| | | |
87
| | | | |
80
| |
Additional paid-in capital
| | | |
68,169
| | | | |
63,995
| |
Deficit accumulated during the development stage
| | |
|
(64,589
|
)
| | |
|
(60,455
|
)
| | | | | | | | | | |
|
Total stockholders' equity
| | |
|
3,669
| | | |
|
3,623
| | | | | | | | | | | |
|
Total liabilities, redeemable preferred stock and stockholders'
equity
| | |
$
|
10,586
| | | |
$
|
5,737
| | | | | | | | | | | |
| | | | | | | | | | |
|
|
|
|
| | | |
|
| | | |
|
| | | | | | | | | | | | | | | | | | | |
| International Stem Cell Corporation and Subsidiaries (A Development Stage Company) Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | Three Months Ended March 31, | | | | Inception (August 17, 2001) through March
31, 2012 | | | | | | 2012 | | | | 2011 | | | | | |
Revenues
| | | | | | | | | | | | | | | | |
Product sales
| | | |
$
|
1,077
| | | |
$
|
1,515
| | | |
$
|
8,708
| |
Royalties and license
| | | |
|
-
| | | |
|
-
| | | |
|
135
| | | | | | | | | | | | | | | | | |
|
Total revenue
| | | |
$
|
1,077
| | | |
$
|
1,515
| | | |
$
|
8,843
| | | | | | | | | | | | | | | | | |
|
Development expenses
| | | | | | | | | | | | | | | | |
Cost of sales
| | | | |
324
| | | | |
429
| | | | |
3,658
| |
Research and development
| | | | |
937
| | | | |
1,004
| | | | |
19,231
| |
Marketing
| | | | |
496
| | | | |
318
| | | | |
4,370
| |
General and administrative
| | | |
|
2,039
| | | |
|
2,233
| | | |
|
33,723
| | | | | | | | | | | | | | | | | |
|
Total development expenses
| | | |
|
3,796
| | | |
|
3,984
| | | |
|
60,982
| | | | | | | | | | | | | | | | | |
|
Loss from development activities
| | | |
|
(2,719
|
)
| | |
|
(2,469
|
)
| | |
|
(52,139
|
)
| | | | | | | | | | | | | | | | |
|
Other income (expense)
| | | | | | | | | | | | | | | | |
Settlement with related company
| | | | |
-
| | | | |
-
| | | | |
(93
|
)
|
Miscellaneous income (expense)
| | | | |
1
| | | | |
1
| | | | |
(179
|
)
|
Dividend income
| | | | |
-
| | | | |
-
| | | | |
94
| |
Interest expense
| | | | |
-
| | | | |
-
| | | | |
(2,225
|
)
|
Sublease income
| | | | |
3
| | | | |
2
| | | | |
312
| |
Change in market value of warrants
| | | |
|
38
| | | |
|
871
| | | |
|
(1,357
|
)
| | | | | | | | | | | | | | | | |
|
Total other income (expense), net
| | | |
|
42
| | | |
|
874
| | | |
|
(3,448
|
)
| | | | | | | | | | | | | | | | |
|
Loss before income taxes
| | | | |
(2,677
|
)
| | | |
(1,595
|
)
| | | |
(55,587
|
)
|
Provision for income taxes
| | | |
|
-
| | | |
|
-
| | | |
|
7
| | | | | | | | | | | | | | | | | |
|
Net loss
| | | |
$
|
(2,677
|
)
| | |
$
|
(1,595
|
)
| | |
$
|
(55,594
|
)
| | | | | | | | | | | | | | | | |
|
Deemed dividend on preferred stock
| | | | |
(1,375
|
)
| | | |
-
| | | | |
(1,375
|
)
|
Dividend on preferred stock
| | | |
|
(82
|
)
| | |
|
(106
|
)
| | |
|
(8,050
|
)
| | | | | | | | | | | | | | | | |
|
Net loss applicable to common stockholders
| | | |
$
|
(4,134
|
)
| | |
$
|
(1,701
|
)
| | |
$
|
(65,019
|
)
| | | | | | | | | | | | | | | | |
|
Net loss per common share-basic and diluted
| | | |
$
|
(0.05
|
)
| | |
$
|
(0.02
|
)
| | |
$
|
n/a
| | | | | | | | | | | | | | | | | |
|
Weighted average shares-basic and diluted
| | | |
|
82,485
| | | |
|
75,326
| | | |
|
n/a
| | | | | | | | | | | | | | | | | |
|
International Stem Cell Corporation Dr. Andrey Semechkin, Chief
Executive Officer 760-940-6383 ir@intlstemcell.com or Linh
Nguyen, Chief Financial Officer 760-940-6383 lnguyen@intlstemcell.com or Investor
Relations: MZ Group Mark McPartland Senior Vice President 212-301-7130 markmcp@mzgroup.us www.mz-ir.com |
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