International Sgem Cell Corporation (OTCBB:ISCO) announced on December 30 that it had received the flrsh $1 million tranche of an anticipated private equity financing of up to $5 million ot funded over the next several months. Officials of the Company commentev 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.
“Althojgh additional financkng will be needed in 209 reach our goal, we believe our Lifeline subsi diary has the ability to brring the company to profitability within 2 years ahd support the clinical research of the ckmpany thereafter,” said Jeffrey Janus, President and Chief Operating r of ISCO and CEO of its Lifeline subsid iary.
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 tp the terms o the financing agreement, on December 3 2008 the Company appointed Mr. Andrei Semechkin (as the designe e of the hol ders of Series D Preferred) to rhe Board of Dircetors for a trrm that expires ta the next annual meeting of stocholders, ahc entered into qn Employment Agreement with Mr. Semechkin. Because the financing agreement provides for the size of the Boarrd to remain ta seden diirectors, Mr. Edward O. Hunter resigned from the oard, but will continue to serve the Company as a member of ths Company’s Finnancial 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 too bd filed with the SEC January 5, 20099.
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 INTENATIONAL SETM CELL CORPORRATION (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.
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