SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 9, 2012
INTERNATIONAL STEM CELL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 000-51891 | 20-4494098 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
5950 Priestly Drive, Carlsbad, CA 92008
(Address of principal executive offices, including zip code)
(760) 940-6383
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CAR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On November 9, 2012, International Stem Cell Corporation (the Company) issued a press release to report certain of its financial results for the third quarter ended September 30, 2012. The press release is attached as Exhibit 99.1, which is furnished under Item 2.02 of this report and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit |
Title | |
99.1 | Press release dated November 9, 2012 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
International Stem Cell Corporation | ||
By: | /s/ Linh Nguyen | |
Linh Nguyen | ||
Chief Financial Officer |
Dated: November 9, 2012
Exhibit 99.1
International Stem Cell Corp Announces Third Quarter 2012 Financial Results
CARLSBAD, CaliforniaNovember 9, 2012 (Market Wire)International Stem Cell Corporation (OTC QB: ISCO) (www.internationalstemcell.com) (ISCO or the Company) a California-based biotechnology company focused on therapeutic and research products, today announced financial results for the three months ended September 30, 2012.
Three Months Ended September 30, 2012
Revenue for the three months ended September 30, 2012 totaled $1.19 million compared to $0.84 million for the same period in 2011. Sales for Lifeline Skin Care (LSC) and Lifeline Cell Technology (LCT) increased by 46% and 37%, respectively. LSC and LCT accounted for 44% and 56% of total revenue in the three months ended September 30, 2012 compared to 43% and 57%, respectively, for the same period of 2011.
Research and development (R&D) expenses were $0.90 million for the three months ended September 30, 2012, compared to $1.13 million for the same period in 2011. The decrease was due primarily to lower stock-based compensation expense, lower personnel-related spending and lower consulting expenses, partially offset by higher stem cell line research and testing expenses and higher laboratory expenses associated with our Parkinsons disease program.
The Company continues to invest in its sales and marketing infrastructure. Marketing expenses for the three months ended September 30, 2012 were $0.48 million, compared to $0.37 million for the same period in 2011. The increase was primarily driven by investments to promote and build awareness of the Lifeline Skin Care brand and branded products. General and administrative expenses were $1.57 million, down 26% compared to the same period in 2011, as a result of ongoing operational efficiency initiatives.
Cash and cash equivalents totaled $2.38 million at September 30, 2012 compared to $1.34 million as of December 31, 2011 due primarily to two financing transactions totaling approximately $7.03 million completed in the first three months of 2012.
We have made excellent progress in our therapeutic development programs, being able to start our non-human primate study in our Parkinsons disease program earlier than anticipated, and we remain on track to publish the results in the first half of next year, stated Dr. Andrey Semechkin, ISCOs CEO and Co-Chairman. In addition, our results for the third quarter reflect good progress by LSC and LCT both in terms of growing sales and implementing their strategies. Particularly pleasing is LSCs continued revenue growth as they aim to diversify their sales channels, and LCTs strong quarter on quarter performance. General and administrative expenses continued to decrease reflecting our increased focus on cost containment. Looking ahead to next year, we anticipate our R&D expenses to increase further as we expand our pharmacology and safety studies and our Parkinsons program moves closer to IND filing in early 2014.
Q3 2012 Highlights:
| The Company was granted an important patent for the liver disease program. The patent represents a new method of creating pure populations of definitive endoderm, precursor cells to liver and pancreas cells, from human pluripotent stem cells in an efficient, cost effective and scalable manner. |
| Commenced rodent studies to measure the efficacy of candidate neuronal cells for the treatment of Parkinsons disease. |
| Announced the addition of two new regenerative medicine experts to our list of scientific advisors. Dr. Evan Snyder, the director of Sanford-Burnhams stem cell program and research center, and one of the pioneers of using stem cells to treat Parkinsons disease (PD), and Dr. Rosario Sánchez-Pernaute, a Harvard trained scientist, who has shown how parthenogenetic stem cells can be used in treating the symptoms of PD. |
| Lifeline Cell Technology began selling its primary human cell and optimized media products through Fisher Scientifics online catalog as an Encompass Preferred Supplier. Fisher Scientific is the worlds largest supplier to the life science industry with sales of approximately $12 billion, $424 million of which came from e-catalog sales in 2011. |
| Lifeline Skin Care signed an agreement with Sinopharm Group to distribute LSCs anti-aging skin care products in China and made the first shipment. Sales of cosmetic products in mainland China is estimated to be approximately $8 billion and growing by over 10% per annum. |
Conference Call and Webcast Details:
Date: | Friday, November 9, 2012 | |
Time: | 11:00 a.m. Eastern Time | |
Conference Call Dial-in Numbers | ||
Participants from US Domestic: | 1 877 317-6776 | |
Participants from International: | 1 412 317-6776 | |
Conference ID: | 10020806 | |
Webcast link: | http://webcast.mzvaluemonitor.com/Home/Login/630 |
Replay of the conference call will be available for two week following 1 hour after the end of the conference call through end date: November 26, 2012 at 9:00 am ET.
Teleconference Replay Details:
US Domestic: 1-877-344-7529
International: 1-412-317-0088
Conference ID: 10020806
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. ISCOs 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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Safe harbor statement
Statements pertaining to anticipated developments, expected changes in R&D expenses, 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 companys business, particularly those mentioned in the cautionary statements found in the companys Securities and Exchange Commission filings. The company disclaims any intent or obligation to update forward-looking statements.
International Stem Cell Corporation and Subsidiaries
(A Development Stage Company)
Condensed Consolidated Balance Sheets
(in thousands, except share data)
September 30, 2012 |
December 31, 2011 |
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(Unaudited) | ||||||||
Assets |
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Cash and cash equivalents |
$ | 2,380 | $ | 1,337 | ||||
Accounts receivable, net |
411 | 140 | ||||||
Inventory, net |
1,122 | 1,268 | ||||||
Prepaid expenses and other current assets |
293 | 274 | ||||||
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Total current assets |
4,206 | 3,019 | ||||||
Property and equipment, net |
1,238 | 1,420 | ||||||
Intangible assets, net |
1,652 | 1,282 | ||||||
Deposits and other assets |
20 | 16 | ||||||
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Total assets |
$ | 7,116 | $ | 5,737 | ||||
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Liabilities, Redeemable Preferred Stock and Stockholders Equity |
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Accounts payable |
$ | 1,056 | $ | 777 | ||||
Accrued liabilities |
465 | 752 | ||||||
Deferred revenue |
176 | 189 | ||||||
Related party payable |
17 | 108 | ||||||
Advances |
250 | 250 | ||||||
Warrants to purchase common stock |
| 38 | ||||||
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Total current liabilities |
1,964 | 2,114 | ||||||
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Convertible Redeemable Series G Preferred stock, $0.001 par value, 5,000,000 shares and 0 were authorized, issued and outstanding at September 30, 2012 and December 31, 2011, respectively, liquidation preferences of $5,000 and $0 at September 30, 2012 and December 31, 2011, respectively |
4,941 | | ||||||
Commitments and contingencies |
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Stockholders Equity |
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Series D Preferred stock, $0.001 par value, 50 shares authorized, 43 issued and outstanding at September 30, 2012 and December 31, 2011, liquidation preference of $4,320 at September 30, 2012 and December 31, 2011 |
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Series A Preferred stock, $0.001 par value, 0 and 5,000,000 shares authorized at September 30, 2012 and December 31, 2011, respectively, 0 and 500,000 issued and outstanding at September 30, 2012 and December 31, 2011, respectively, liquidation preferences of $0 and $615 at September 30, 2012 and December 31, 2011, respectively |
| 1 | ||||||
Series B Preferred stock, $0.001 par value, 5,000,000 shares authorized, 300,000 issued and outstanding at September 30, 2012 and December 31, 2011, liquidation preferences of $381 and $367 at September 30, 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 September 30, 2012 and December 31, 2011, liquidation preferences of $2,480 and $2,387 at September 30, 2012 and December 31, 2011, respectively |
2 | 2 | ||||||
Common stock, $0.001 par value, 300,000,000 and 200,000,000 shares authorized at September 30, 2012 and December 31, 2011, respectively, 87,388,815 and 80,036,315 issued and outstanding at September 30, 2012 and December 31, 2011, respectively |
87 | 80 | ||||||
Additional paid-in capital |
69,315 | 63,995 | ||||||
Deficit accumulated during the development stage |
(69,193 | ) | (60,455 | ) | ||||
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Total stockholders equity |
211 | 3,623 | ||||||
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Total liabilities, redeemable preferred stock and stockholders equity |
$ | 7,116 | $ | 5,737 | ||||
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International Stem Cell Corporation and Subsidiaries
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
Inception (August 17, 2001) through September 30, |
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2012 | 2011 | 2012 | 2011 | 2012 | ||||||||||||||||
Revenues |
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Product sales |
$ | 1,187 | $ | 842 | $ | 3,320 | $ | 3,471 | $ | 10,951 | ||||||||||
Royalties and license |
| | | | 135 | |||||||||||||||
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Total revenue |
1,187 | 842 | 3,320 | 3,471 | 11,086 | |||||||||||||||
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Development expenses |
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Cost of sales |
320 | 361 | 957 | 1,152 | 4,291 | |||||||||||||||
Research and development |
900 | 1,130 | 2,702 | 3,262 | 20,996 | |||||||||||||||
Selling and marketing |
477 | 365 | 1,521 | 1,029 | 5,395 | |||||||||||||||
General and administrative |
1,570 | 2,108 | 5,364 | 6,477 | 37,048 | |||||||||||||||
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Total development expenses |
3,267 | 3,964 | 10,544 | 11,920 | 67,730 | |||||||||||||||
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Loss from development activities |
(2,080 | ) | (3,122 | ) | (7,224 | ) | (8,449 | ) | (56,644 | ) | ||||||||||
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Other income (expense) |
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Settlement with related company |
| | | | (93 | ) | ||||||||||||||
Miscellaneous expense |
(1 | ) | (5 | ) | (55 | ) | (16 | ) | (236 | ) | ||||||||||
Dividend income |
| | | | 94 | |||||||||||||||
Interest expense |
| | | | (2,225 | ) | ||||||||||||||
Sublease income |
| 3 | 7 | 8 | 316 | |||||||||||||||
Change in market value of warrants |
| 559 | 38 | 1,908 | (1,357 | ) | ||||||||||||||
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Total other income (expense), net |
(1 | ) | 557 | (10 | ) | 1,900 | (3,501 | ) | ||||||||||||
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Loss before income taxes |
(2,081 | ) | (2,565 | ) | (7,234 | ) | (6,549 | ) | (60,145 | ) | ||||||||||
Provision for income taxes |
| | | | 7 | |||||||||||||||
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Net loss |
$ | (2,081 | ) | $ | (2,565 | ) | $ | (7,234 | ) | $ | (6,549 | ) | $ | (60,152 | ) | |||||
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Deemed dividend on preferred stock |
$ | | $ | | $ | (1,375 | ) | $ | | $ | (1,375 | ) | ||||||||
Dividends on preferred stock |
$ | 93 | $ | (108 | ) | $ | (129 | ) | $ | (322 | ) | $ | (8,096 | ) | ||||||
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Net loss attributable to common stockholders |
$ | (1,988 | ) | $ | (2,673 | ) | $ | (8,738 | ) | $ | (6,871 | ) | $ | (69,623 | ) | |||||
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Net loss per common share-basic and diluted |
$ | (0 .02 | ) | $ | (0.03 | ) | $ | (0.10 | ) | $ | (0.09 | ) | ||||||||
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Weighted average shares-basic and diluted |
87,350 | 77,802 | 85,421 | 76,487 | ||||||||||||||||
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Contacts:
International Stem Cell Corporation
Dr. Simon Craw, Executive Vice President of Business Development
Phone: 760-940-6383
Email: ir@intlstemcell.com
Linh Nguyen, Chief Financial Officer
Phone: 760-940-6383
Email: lnguyen@intlstemcell.com
Investor Relations:
MZ Group
Mark McPartland
Senior Vice President
Phone: 212-301-7130
Email: markmcp@mzgroup.us
Web: www.mzgroup.us
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