10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 0-51891

INTERNATIONAL STEM CELL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	20-4494098
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5950 Priestly Drive Carlsbad, CA	92008
(Address of Principal Executive Offices)	(Zip Code)

(760) 940-6383

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicated by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.             ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 12, 2021, the Registrant had 8,004,389 shares of Common Stock outstanding.

International Stem Cell Corporation and Subsidiaries

Form 10-Q

Table of Contents

		Page Numbers
PART I—FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)	4
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the three and six months ended June 30, 2021 and 2020 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
	Signatures	32

2

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

International Stem Cell Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and par value data)

(Unaudited)

	June 30,			December 31,
	2021			2020
Assets
Current assets:
Cash	$	750		$	689
Accounts receivable, net		547			403
Inventory, net		1,073			917
Prepaid expenses and other current assets		416			174
Total current assets		2,786			2,183
Non-current inventory		363			371
Property and equipment, net		451			534
Intangible assets, net		1,228			1,262
Right-of-use assets		733			874
Deposits and other assets		50			63
Total assets	$	5,611		$	5,287
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Deficit
Current liabilities:
Accounts payable	$	469		$	360
Accrued liabilities		521			386
Operating lease liabilities, current		309			346
Advances		250			250
Related party note payable		2,882			—
Paycheck Protection Program loan, current		—			141
Total current liabilities		4,431			1,483
Related party note payable		—			2,475
Paycheck Protection Program loan, net of current portion		476			517
Operating lease liabilities, net of current portion		714			845
Total liabilities		5,621			5,320
Commitments and contingencies (Note 8)
Series D redeemable convertible preferred stock, $0.001 par value; 50 shares    authorized; 43 shares issued and outstanding; liquidation preference of $4,300    at June 30, 2021 and December 31, 2020		4,300			4,300
Stockholders' Deficit:
Non-redeemable convertible preferred stock, $0.001 par value; 10,004,310 and 10,006,310    shares authorized, 5,254,310 and 5,255,124 shares issued and outstanding, liquidation    preference of $9,759 and $10,565 at June 30, 2021 and December 31, 2020,    respectively		5			5
Common stock, $0.001 par value; 120,000,000 shares authorized; 8,004,389 and 7,539,089    shares issued and outstanding at June 30, 2021 and December 31, 2020,    respectively		8			8
Additional paid-in capital		105,175			104,769
Accumulated deficit		(109,498	)		(109,115	)
Total stockholders' deficit		(4,310	)		(4,333	)
Total liabilities, redeemable convertible preferred stock    and stockholders' deficit	$	5,611		$	5,287

See accompanying notes to the unaudited condensed consolidated financial statements.

3

International Stem Cell Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Product sales	$	1,833		$	1,812		$	3,491		$	4,171
Operating expenses:
Cost of sales		770			719			1,385			1,576
Research and development		113			200			328			503
Selling and marketing		349			427			696			944
General and administrative		1,007			1,298			2,055			2,436
Total operating expenses		2,239			2,644			4,464			5,459
Loss from operations		(406	)		(832	)		(973	)		(1,288	)
Other income (expense):
Gain on forgiveness of debt		661			—			661			—
Change in fair value of warrant liability		—			(225	)		—			(115	)
Interest expense		(39	)		(29	)		(71	)		(56	)
Total other income (expense), net		622			(254	)		590			(171	)
Net income (loss)	$	216		$	(1,086	)	$	(383	)	$	(1,459	)
Net income (loss) per common share, basic and diluted	$	0.03		$	(0.14	)	$	(0.05	)	$	(0.19	)
Weighted-average common shares used to compute    net income (loss) per share, basic and diluted		7,767			7,539			7,654			7,539

See accompanying notes to the unaudited condensed consolidated financial statements.

4

International Stem Cell Corporation and Subsidiaries

Condensed Consolidated Statements of Changes in Redeemable Convertible 

Preferred Stock and Stockholders’ Deficit

(In thousands)

(Unaudited)

	Three and Six Months Ended June 30, 2021
	Series D Redeemable				Non-redeemable
	Convertible				Convertible					Common				Additional					Total
	Preferred Stock				Preferred Stock					Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares			Amount		Shares		Amount		Capital		Deficit			Deficit
Balance at December 31, 2020		—	$	4,300		5,255		$	5		7,539	$	8	$	104,769	$	(109,115	)	$	(4,333	)
Stock-based compensation		—		—		—			—		—		—		234		—			234
Net loss		—		—		—			—		—		—		—		(599	)		(599	)
Balance at March 31, 2021		—		4,300		5,255			5		7,539		8		105,003		(109,714	)		(4,698	)
Conversion of Series I-1 preferred stock		—		—		(1	)		—		465		—		—		—			—
Stock-based compensation		—		—		—			—		—		—		172		—			172
Net income		—		—		—			—		—		—		—		216			216
Balance at June 30, 2021		—	$	4,300		5,254		$	5		8,004	$	8	$	105,175	$	(109,498	)	$	(4,310	)

	Three and Six Months Ended June 30, 2020
	Series D Redeemable				Non-redeemable
	Convertible				Convertible				Common				Additional					Total
	Preferred Stock				Preferred Stock				Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance at December 31, 2019		—	$	4,300		5,255	$	5		7,539	$	8	$	103,490	$	(106,391	)	$	(2,888	)
Stock-based compensation		—		—		—		—		—		—		418		—			418
Net loss		—		—		—		—		—		—		—		(373	)		(373	)
Balance at March 31, 2020		—		4,300		5,255		5		7,539		8		103,908		(106,764	)		(2,843	)
Stock-based compensation		—		—		—		—		—		—	324			—			324
Net loss		—		—		—		—		—		—		—		(1,086	)		(1,086	)
Balance at June 30, 2020		—	$	4,300		5,255	$	5		7,539	$	8	$	104,232	$	(107,850	)	$	(3,605	)

See accompanying notes to the unaudited condensed consolidated financial statements.

5

International Stem Cell Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2021			2020
Cash flows from operating activities
Net loss	$	(383	)	$	(1,459	)
Adjustments to reconcile net loss to net cash provided by (used in) operating    activities:
Depreciation and amortization		130			128
Operating lease expense		141			132
Stock-based compensation		406			742
Gain on forgiveness of debt		(661	)		—
Change in fair value of warrant liability		—			115
Interest expense on related party note payable		57			52
Changes in operating assets and liabilities:
Accounts receivable		(144	)		821
Inventory, net		(148	)		238
Prepaid expenses and other current assets		(242	)		(172	)
Deposits and other assets		13			19
Accounts payable		109			(75	)
Accrued liabilities		133			(142	)
Operating lease liabilities		(168	)		(152	)
Net cash provided by (used in) operating activities		(757	)		247
Cash flows from investing activities
Purchases of property and equipment		—			(22	)
Payments for patent licenses		(6	)		(48	)
Net cash used in investing activities		(6	)		(70	)
Cash flows from financing activities
Proceeds from Paycheck Protection Program loans		474			654
Proceeds from note payable from a related party		350			—
Net cash provided by financing activities		824			654
Net increase in cash		61			831
Cash, beginning of period		689			484
Cash, end of period	$	750		$	1,315
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4		$	3
Supplemental disclosure of non-cash investing and financing activities:
Gain on forgiveness of debt	$	661		$	—
Right-of-use asset obtained in exchange for operating lease liability	$	—		$	421
Patent license costs included in accrued liabilities	$	—		$	7

See accompanying notes to the unaudited condensed consolidated financial statements.

6

International Stem Cell Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

International Stem Cell Corporation (the “Company”) was organized in Delaware in June 2005 and is publicly traded on the OTCQX under the symbol “ISCO”. The Company is primarily a research and development company, for the therapeutic market, which has focused on advancing potential clinical applications of human parthenogenetic stem cells (“hpSCs”) for the treatment of various diseases of the central nervous system and liver diseases. The Company has the following wholly-owned subsidiaries:

• Lifeline Cell Technology, LLC (“LCT”) – for the biomedical market, develops, manufactures and commercializes primary human cell research products including over 200 human cell culture products, including frozen human “primary” cells and the reagents (called “media”) needed to grow, maintain and differentiate the cells;

• Lifeline Skin Care, Inc. (“LSC”) – for the anti-aging market, develops, manufactures and markets a category of anti-aging skin care products based on the Company’s proprietary parthenogenetic stem cell technology and small molecule technology;

• Cyto Therapeutics Pty. Ltd. (“Cyto Therapeutics”) – performs research and development (“R&D”) for the therapeutic market and is currently conducting clinical trials in Australia for the use of ISC-hpNSC® in the treatment of Parkinson’s disease.

COVID-19 Pandemic

The COVID-19 pandemic has caused business disruptions in the Company’s business globally. The Company’s condensed consolidated financial statements reflect judgments and estimates that could change in the future as a result of the COVID-19 pandemic. For the six months ended June 30, 2021, the Company experienced a year-over-year decline in product sales. In response, the Company has reduced its capital spending and, where possible, operating expenses while facilitating ongoing safe and reliable operations. As of the date of this report, the Company expects the COVID-19 pandemic will continue to adversely impact its business, financial condition, liquidity, and future results of operations. The full extent to which the COVID-19 pandemic will impact the Company remains uncertain and ultimately will be dictated by the length and severity of the pandemic, as well as the economic recovery and federal, state and local government actions taken in response. The Company is continuing to monitor the impact of COVID-19 on the Company’s operations, workforce, suppliers, customers and industry.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows for the periods presented. The operating results presented in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s annual report on Form 10-K filed with the SEC on March 30, 2021.

Liquidity and Going Concern

The Company had an accumulated deficit of approximately $109.5 million as of June 30, 2021 and has, on an annual basis, incurred net losses and negative operating cash flows since inception. The Company has had no revenue from its principal operations in therapeutic and clinical product development through research and development efforts. Unless the Company obtains additional financing, the Company does not have sufficient cash on hand to sustain operations at least through one year after the issuance date of these condensed consolidated financial statements.

There can be no assurance that the Company will be successful in maintaining normal operating cash flow or obtaining additional funding. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional financing. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

7

The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations. The Company will need to obtain significant additional funding from sources, including through debt and/or equity financing, license arrangements, grants and/or collaborative research arrangements to sustain its operations and develop products.

The timing and degree of any future capital requirements will depend on many factors, including:

• the accuracy of the assumptions underlying the estimates for capital needs in 2021 and beyond;

• the extent that revenues from sales of LSC and LCT products cover the related costs and provide capital;

• scientific progress in research and development programs;

• the magnitude and scope of the Company’s research and development programs and its ability to establish, enforce and maintain strategic arrangements for research, development, clinical testing, manufacturing and marketing;

• the progress with preclinical development and clinical trials;

• the time and costs involved in obtaining regulatory approvals;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;

• the number and type of product candidates that the Company decides to pursue;

• demand from the Company’s largest original equipment manufacturer customers; and

• the development of major public health concerns, including COVID-19 or other pandemics arising globally, and the current and future impact that such concerns may have on the Company’s operations and funding requirements.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including inconsistent liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. As the pandemic continues and restrictions remain in place or new restrictions are imposed, it may make any additional debt and/or equity financing more difficult, more costly and more dilutive.

In addition, debt financing may be expensive and require the Company to pledge all or a substantial portion of its assets. If additional funds are obtained through arrangements with collaborative partners, these arrangements may require the Company to relinquish rights to some of its technologies, product candidates or products that the Company would otherwise seek to develop and commercialize on its own. Furthermore, if sufficient capital is not available, the Company may be required to delay, reduce the scope of or eliminate one or more of its product initiatives. The Company’s failure to raise capital or enter into applicable arrangements when needed would have a negative impact on its financial condition.

Principles of Consolidation and Foreign Currency Transactions

The condensed consolidated financial statements include the accounts of International Stem Cell Corporation and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The functional currency of the Company and its subsidiaries, including its wholly-owned Australian subsidiary, Cyto Therapeutics, is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the respective balance sheet dates. Revenue and expenses are translated at the average rate in effect on the date of the transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in general and administrative expense in the accompanying condensed consolidated statements of operations and were not material for the periods presented.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements. Significant estimates include patent life (remaining legal life versus remaining useful life), inventory carrying values, allowance for excess and obsolete inventories, allowance for sales returns and doubtful accounts, and the fair value of stock option grants using the Black-Scholes option valuation model. Actual results could differ from those estimates.

8

Segments

The Company’s chief operating decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information by each reportable company’s statement of operations. The Company operates the business on the basis of three reporting segments, the parent company and two business units: ISCO – therapeutic market; LCT – biomedical market, and; LSC – anti-aging market.

Inventory

Inventory is accounted for using the average cost and first-in, first-out (“FIFO”) methods for LCT cell culture media and reagents, average cost and specific identification methods for LSC products, and specific identification method for other LCT products. Inventory balances are stated at the lower of cost or net realizable value. Laboratory supplies used in the research and development process are expensed as consumed. LCT’s inventory has a long product life cycle, does not have a shelf life when frozen, and future demand is uncertain. As such, at each reporting period, the Company estimates its reserve for allowance and obsolescence using historical sales data and inventory turnover rates. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. If the Company is able to sell such inventory, any related reserves would be reduced in the period of sale. The value of the inventory that is not expected to be sold within twelve months of the current reporting period is classified as non-current inventory on the accompanying condensed consolidated balance sheets.

Accounts Receivable

Trade accounts receivable are recorded at the net invoice value and are not interest bearing. Accounts receivable primarily consist of trade accounts receivable from the sales of LCT’s products, timing of cash receipts by the Company related to LSC credit card sales to customers, as well as LSC trade receivable amounts related to spa and distributor sales. The Company considers receivables past due based on the contractual payment terms. The Company reviews its exposure to accounts receivable and reserves specific amounts if collectability is no longer reasonably assured. The Company recorded an allowance for doubtful accounts of $3,000 and $12,000 as of June 30, 2021 and December 31, 2020, respectively.

Research and Development Tax Credit Receivable

As of June 30, 2021, the Company recognized a research and development tax credit receivable of $113,000 within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets earned by its wholly-owned subsidiary, Cyto Therapeutics, which conducts various research and development activities on the Company’s product candidates in Australia. Under Australian tax law, the Australian Taxation Office provides for a refundable tax credit in the form of a cash refund equal to 43.5% of qualified research and development expenditures, not to exceed established thresholds. The Company recognizes the R&D tax credit as a reduction to research and development expense when there is reasonable assurance that the tax credit will be received, the relevant expenses have been incurred, and the amount can be reliably measured.

Advances

On June 18, 2008, the Company entered into an agreement with BioTime, Inc. (“BioTime”), whereby BioTime paid an advance of $250,000 to LCT to produce, make, and distribute certain products. The $250,000 advance will be paid down with the first $250,000 of net revenues that otherwise would be allocated to LCT under the agreement. As of June 30, 2021, no revenues were realized and attributable to BioTime under this agreement.

Property and Equipment

Property and equipment are stated at cost. The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years. Costs related to leasehold improvements are capitalized and amortized over the shorter of the remaining term of the lease or the estimated life of the asset.

Intangible Assets

Intangible assets consist of acquired patent licenses and capitalized legal fees related to the acquisition, filing, maintenance, and defense of patents and trademarks. Amortization begins once the patent is issued by the appropriate authoritative bodies. In the period in which a patent application is rejected or efforts to pursue the patent are abandoned, all the related accumulated costs are expensed. Patents and other intangible assets are amortized on a straight-line basis over the shorter of the useful life of the underlying patent, which is generally 15 years, or when the intangible asset is rejected or abandoned. All amortization expense related to intangible assets is included in general and administrative expense in the accompanying condensed consolidated statements of operations.

9

Long-Lived Asset Impairment

The Company reviews long-lived assets for impairment when events or changes in circumstances (“triggering event”) indicate that the carrying value of an asset or group of assets may not be recovered. If a triggering event is determined to have occurred, the carrying value of an asset or group of assets is compared to the future undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying value exceeds the undiscounted cash flows of the asset or group of assets, then impairment exists. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Revenue Recognition

Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following five-step process:

1. Identify the contract with the customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when (or as) each performance obligation is satisfied

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following table presents the Company's revenue disaggregated by segment, product and geography (in thousands):

Biomedical market:

	Three Months Ended June 30, 2021									Six Months Ended June 30, 2021
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	186	$	171	$	357		24	%	$	351	$	329	$	680		23	%
Media		939		197		1,136		76	%		1,912		328		2,240		77	%
Total	$	1,125	$	368	$	1,493		100	%	$	2,263	$	657	$	2,920		100	%

	Three Months Ended June 30, 2020									Six Months Ended June 30, 2020
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	213	$	87	$	300		22	%	$	475	$	204	$	679		20	%
Media		994		85		1,079		77	%		2,461		210		2,671		79	%
Other		16		—		16		1	%		16		—		16		1	%
Total	$	1,223	$	172	$	1,395		100	%	$	2,952	$	414	$	3,366		100	%

Anti-aging market:

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Total		% of Total			Total		% of Total			Total		% of Total			Total		% of Total
	Revenues		Revenues			Revenues		Revenues			Revenues		Revenues			Revenues		Revenues
Skin care sales channels
Ecommerce	$	245		72	%	$	299		72	%	$	411		72	%	$	522		65	%
Professional		95		28	%		118		28	%		160		28	%		283		35	%
Total	$	340		100	%	$	417		100	%	$	571		100	%	$	805		100	%

The Company's revenue consists primarily of sales of products from its two revenue-generating operating segments, the biomedical market and anti-aging market business segments. The biomedical market segment markets and sells primary human cell research products with two product categories, cells and media, which are sold both domestically within the United States and internationally. The anti-aging market segment markets and sells a line of skincare products sold through two sales channels: ecommerce and professional. The ecommerce channel sells direct to customers through online orders, while professional sales are primarily to spas, salons and other skincare providers.

10

Contract terms for unit price, quantity, shipping and payment are governed by sales agreements, invoices or online order forms which the Company considers to be a customer's contract in all cases. The unit price is considered the observable stand-alone selling price for the performance obligation(s) within the arrangements. Any promotional or volume sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price.

The Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Product sales generally consist of a single performance obligation that the Company satisfies at a point in time (i.e., upon delivery of the product).

For LSC products, ecommerce sales are primarily paid through credit card charges, while professional sales are invoiced. The professional sales and biomedical products' standard payment terms for its customers are generally 30 days after the Company satisfies the performance obligation(s).

The Company elects to account for shipping and handling costs as activities to fulfill the promise to transfer the goods to a customer. As a result, no consideration is allocated to shipping and handling costs. Rather, the Company accrues the cost of shipping and handling upon shipment of the product, and all contract revenue (i.e., the transaction price) is recognized at the same time.

Variable Consideration

The Company records revenue from customers in an amount that reflects the consideration it expects to be entitled to after transferring control of those goods or services to a customer. From time to time, the Company offers sales promotions on its products such as discounts and free product offers. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur and is updated at the end of each reporting period as additional information becomes available.

Contract Balances

The Company records a receivable when it has an unconditional right to receive consideration after a performance obligation is satisfied. As of June 30, 2021 and December 31, 2020, accounts receivable, net, totaled $547,000 and $403,000, respectively. During the six months ended June 30, 2021 and 2020, the Company did not incur material write-offs of its accounts receivable.

Practical Expedients

The Company has elected the practical expedient to not determine whether contacts with customers contain significant financing components. The Company pays commissions on certain sales for its biomedical and anti-aging product markets once the customer payment has been received, which are accrued at the time of the sale. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. In addition, the Company has elected to exclude sales taxes consideration from the determined transaction price.

Allowance for Sales Returns

The Company’s anti-aging products have a 30-day product return guarantee; however, the Company determined that there is a low probability that returns will occur based on its historical rate of returns. Historically, returns have not been significant and are recognized as a reduction to current period revenue. As of June 30, 2021 and December 31, 2020, the Company recorded no allowance for sales returns.

Cost of Sales

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead. Certain of the Company’s licensed technology agreements may require the Company to pay royalties based on the future sale of the Company’s products. Such royalties will be recorded as a component of cost of sales when incurred. Additionally, milestone payments or the amortization of license fees related to developed technologies used in the Company’s products will be included as a component of cost of sales to the extent that such payments become due in the future.

11

Research and Development Costs

Research and development costs, which are expensed as incurred, primarily consist of salaries and benefits associated with research and development personnel, overhead and occupancy costs, contract services costs and amortization of license costs for technology used in research and development with alternative future uses, offset by the research and development tax credit provided by the Australian Taxation Office for qualified expenditures.

Stock-Based Compensation

The cost of a stock-based award is measured at the grant date based on the estimated fair value of the award, and is recognized as expense on a straight-line basis, net of forfeitures which are recognized as incurred, over the requisite service period of the award. The fair value of stock options is estimated using the Black-Scholes option valuation model, which requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. The fair value of restricted stock awards is based on the market value of the Company’s common stock on the date of grant.

Fair Value of Financial Instruments

The Company believes that the carrying value of its cash, accounts receivables, accounts payable, accrued liabilities, Paycheck Protection Program loan and related party note payable as of June 30, 2021 and December 31, 2020 approximate their fair values because of the short-term nature of those instruments.

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1:  Observable inputs such as quoted prices in active markets.

Level 2:  Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of June 30, 2021, the Company had no financial assets or liabilities measured at fair value on a recurring basis. As of December 31, 2020, the Company had outstanding a warrant liability which was measured at fair value on a recurring basis. The fair value of the warrant liability was calculated using the Monte-Carlo simulation model, which required the use of certain estimates. As of December 31, 2020, the fair value of the warrant liability was estimated to be zero.

Income Taxes

The Company accounts for income taxes in accordance with applicable authoritative guidance, which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Potentially dilutive common stock equivalents are comprised of stock options, common stock warrants and convertible preferred stock. For the three and six months ended June 30, 2021 and 2020, there was no difference in the number of shares used to calculate basic and diluted shares outstanding.

12

For the three and six months ended June 30, 2021 and 2020, the following common stock options, common stock warrants and convertible preferred stock were not included in the diluted net income (loss) per share calculation because the effect would be anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options outstanding		4,545,211		4,620,033		4,386,367		4,739,281
Common stock warrants outstanding		—		3,948,951		—		3,950,002
Redeemable convertible preferred stock		2,457,143		2,457,143		2,457,143		2,457,143
Non-redeemable convertible preferred stock		3,452,533		3,675,135		3,563,219		3,675,135
Total		10,454,887		14,701,262		10,406,729		14,821,561

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in stockholders’ equity except those resulting from investments by owners and distributions to owners. The Company did not have any items of comprehensive income (loss) other than net income (loss) from operations for the three and six months ended June 30, 2021 and 2020.

Customer Concentrations

During the six months ended June 30, 2021, two customers accounted for approximately 35% and 10%, respectively, of consolidated revenues. During the six months ended June 30, 2020, one customer accounted for approximately 47% of consolidated revenues. As of June 30, 2021 and December 31, 2020, the two customers accounted for approximately 42% and 62%, respectively, of accounts receivable, net. No other single customer accounted for more than 10% of revenues for the periods then ended for any segment.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The new standard will be effective for the Company on January 1, 2023 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded features that could be recognized separately from the host contract. Consequently, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 also requires use of the if-converted method in the diluted earnings per share calculation for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for smaller reporting companies, with early adoption permitted. The new standard will be effective for the Company on January 1, 2024 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application, and the simplification, of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

13

2. Inventory

The components of inventory are as follows (in thousands):

	June 30,			December 31,
	2021			2020
Raw materials	$	595		$	427
Work in process		411			481
Finished goods		994			991
		2,000			1,899
Less: allowance for inventory excess and obsolescence		(564	)		(611	)
Total current and non-current inventory, net	$	1,436		$	1,288
Inventory, net	$	1,073		$	917
Non-current inventory		363			371
Total current and non-current inventory, net	$	1,436		$	1,288

During the six months ended June 30, 2021, the Company disposed of obsolete inventory in the amount of $45,000. The inventory had been fully reserved for and the write-off had no impact on the Company’s consolidated statements of operations for the periods presented.

3. Property and Equipment

Property and equipment consist of the following (in thousands):

	June 30,			December 31,
	2021			2020
Machinery and equipment	$	1,661		$	1,661
Computer equipment and software		243			241
Office equipment		230			230
Leasehold improvements		1,303			1,303
Construction in progress		1			3
		3,438			3,438
Less: accumulated depreciation and amortization		(2,987	)		(2,904	)
Property and equipment, net	$	451		$	534

Depreciation and amortization expense for the three months ended June 30, 2021 and 2020 was $41,000 and $43,000, respectively. Depreciation and amortization expense for the six months ended June 30, 2021 and 2020 was $83,000.

4. Intangible Assets

Intangible Assets consists of the following (in thousands):

	June 30,			December 31,
	2021			2020
Patents	$	2,299		$	2,286
Less: accumulated amortization		(1,146	)		(1,099	)
		1,153			1,187
Indefinite life logos and trademarks		75			75
Intangible assets, net	$	1,228		$	1,262

Amortization expense for the three months ended June 30, 2021 and 2020 was $23,000. Amortization expense for the six months ended June 30, 2021 and 2020 was $47,000 and $45,000, respectively.

14

5. Paycheck Protection Program Loan

In May 2020, the Company received a loan of $654,000 from its lender under the Paycheck Protection Program (“First Draw Loan”). The Paycheck Protection Program (“PPP”), as amended, was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The First Draw Loan has a two-year term and bears interest at a rate of 1% per annum. Principal and interest payments are deferred for ten months following the loan forgiveness period, which is defined as the 24-week period following the loan origination date, at which time the loan balance is payable in monthly installments unless the Company applies for, and receives, forgiveness in accordance with the CARES Act and the terms of the loan executed by the Company and its lender. As required by the CARES Act, the Company used the proceeds from the PPP Loan for payroll, healthcare benefits, rent and other qualifying expenses.

In March 2021, the Company received a loan of $474,000 from its lender under the PPP (“Second Draw Loan”). The Second Draw Loan has a five-year term and bears interest at a rate of 1% per annum. Principal and interest payments are deferred until August 2022, at which time the loan balance is payable in monthly installments unless the Company applies for, and receives, forgiveness in accordance with the CARES Act and the terms of the loan executed by the Company and its lender. The Second Draw Loan may be used to help fund payroll, healthcare benefits, rent, worker protection costs related to COVID-19, certain supplier costs and other qualifying expenses.

In June 2021, the Company applied for and received forgiveness of its First Draw Loan in whole from the SBA and its lender. The amount of forgiveness totaled $661,000, which consisted of unpaid principal and accrued interest. The Company recorded the forgiveness of debt as a gain in other income (expense), net on the accompanying condensed consolidated statements of operations. In August 2021, the Company applied for and received forgiveness of its Second Draw Loan in whole from the SBA and its lender. Refer to Note 10 – Subsequent Events for further discussion.

As of June 30, 2021, $476,000 of outstanding principal and accrued interest of the Second Loan Draw was classified as non-current on the accompanying condensed consolidated balance sheets based on the contractual payment schedule of the loan.

6. Convertible Preferred Stock and Stockholders’ Deficit

Non-Redeemable Convertible Preferred Stock

The Company’s Series B, Series G, Series I-1 and Series I-2 non-redeemable convertible preferred stock has been classified as equity on the accompanying condensed consolidated balance sheets.

During the three months ended June 30, 2021, holders of all remaining shares of the Company’s Series I-1 preferred stock converted 814 shares of issued and outstanding Series I-1 preferred stock into 465,300 shares of common stock of the Company. On June 25, 2021, the Company filed a Certificate of Elimination for the Series I-1 convertible preferred stock with the Secretary of State of the State of Delaware. The Certificate of Elimination amended the provisions of the Certificate of Incorporation of the Company to eliminate the powers, designations, preferences, privileges and other rights of the Series I-1 preferred stock.

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of June 30, 2021 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	449	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-2		4,310		4,310		4,310		—
Total		10,004,310		5,254,310	$	9,759	$	5

15

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of December 31, 2020 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	441	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-1		2,000		814		814		—
Series I-2		4,310		4,310		4,310		—
Total		10,006,310		5,255,124	$	10,565	$	5

Common Stock

As of June 30, 2021, the Company was authorized to issue 120,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share. The Company has designated 50 shares of Series D redeemable convertible preferred stock and a total of 10,004,310 shares of Series B, Series G and Series I-2 non-redeemable convertible preferred stock.

Common Stock Warrants

In October 2014 and March 2016, the Company issued warrants exercisable for 62,047 and 11,159,995 shares of common stock, respectively, at an exercise price of $1.75 per share to certain placement agents and existing investors in connection with financing arrangements. In April 2020, the common stock warrants issued in October 2014 expired unexercised. The common stock warrants issued in March 2016 expired unexercised in March 2021. As of December 31, 2020, 3,948,569 common stock warrants issued in March 2016 were outstanding.

Equity Incentive Plans

The Company adopted the 2006 Equity Participation Plan (as amended the “2006 Plan”), which provides for the grant of stock options, restricted stock and other equity-based awards. Awards for up to 100,000 shares may be granted to employees, directors and consultants under this Plan. The options granted under the 2006 Plan may be either qualified or non-qualified options. Options may be granted with different vesting terms and expire no later than 10 years from the date of grant. The 2006 Plan expired on November 16, 2016. Options and other equity-based awards granted prior to the expiration of the 2006 Plan will continue in effect until the option or award is exercised or terminates pursuant to its terms. No new awards may be granted under the 2006 Plan following its expiration.

In April 2010, the Company adopted the 2010 Equity Participation Plan, as amended (the “2010 Plan”), which provides for the grant of stock options, restricted stock and other equity-based awards. Awards for up to 9,700,000 shares may be granted to employees, directors and consultants under the 2010 Plan. The options granted under the 2010 Plan may be either qualified or non-qualified options. Options may be granted with different vesting terms and expire no later than 10 years from the date of grant. In June 2020, the Company amended the 2010 Plan to extend the term of the 2010 Plan until March 2030. No other material provisions were amended.

16

Stock Options

Transactions involving stock options issued to employees, directors and consultants under the 2006 Plan and the 2010 Plan are summarized below. Options issued have a maximum life of 10 years. The following tables summarize the changes in options outstanding and the related exercise prices for the Company’s common stock options issued:

						Weighted-
						Average
						Remaining
	Number of			Weighted-		Contractual		Aggregate
	Outstanding			Average		Term		Intrinsic Value
	Options			Exercise		(in years)		(in thousands)
Outstanding at December 31, 2020		4,255,371		$	3.41
Granted		1,761,962		$	0.39
Forfeited or canceled		(287,471	)	$	2.13
Expired		(21,874	)	$	285.32
Outstanding at June 30, 2021		5,707,988		$	1.47		7.74	$	495
Vested and expected to vest at June 30, 2021		5,418,495		$	1.52		7.63	$	416
Exercisable at June 30, 2021		3,791,027		$	1.96		6.72	$	—

Stock-Based Compensation

The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option valuation model. All options are amortized over the requisite service periods. The weighted-average assumptions used in the Black-Scholes option valuation model to determine the fair value of stock options granted for the three months and six ended June 30, 2021 and 2020 were as follows:

	Three and Six Months Ended June 30,
	2021		2020
Risk-free interest rate	0.89%		0.37%
Expected stock price volatility	83.85%		88.82%
Expected dividend yield	0%		0%
Expected life of options (in years)		5.67		5.36

Total stock-based compensation expense for the three and six months ended June 30, 2021 and 2020 was comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of sales	$	7	$	21	$	15	$	45
Research and development		8		30		31		79
Selling and marketing		5		20		22		42
General and administrative		152		253		338		576
Total	$	172	$	324	$	406	$	742

Unrecognized compensation expense related to stock options as of June 30, 2021 was $540,000, which is expected to be recognized over a weighted-average period of 1.9 years.

17

Common Stock Reserved for Future Issuance

As of June 30, 2021, the Company had shares of common stock reserved for future issuance as follows:

Options outstanding	5,707,988
Common stock available for issuance under the 2010 Plan	3,827,272
Redeemable convertible preferred stock	2,457,143
Non-redeemable convertible preferred stock	3,209,835
Total	15,202,238

7. Related Party Transactions

In 2011, the Company executed an operating lease for its corporate offices with S Real Estate Holdings LLC. S Real Estate Holdings LLC is owned by Dr. Russell Kern, the Company’s Executive Vice President and Chief Scientific Officer and a director and was previously owned by Dr. Andrey Semechkin, the Company’s Chief Executive Officer and Co-Chairman of the Board of Directors. The lease agreement was negotiated at arm’s length and was reviewed by the Company’s outside legal counsel. The terms of the lease were reviewed by a committee of independent directors, and the Company believes that, in total, those terms are at least as favorable to the Company as could be obtained for comparable facilities from an unaffiliated party. In March 2017, the Company signed an amendment to the lease agreement to extend the term of the lease until 2020 and include annual adjustments to the monthly lease payments. In March 2020, the Company entered into an amendment to the lease agreement. The amendment extended the term of the lease for three years (until February 2023) and provided for a 2% increase in monthly rent. For the six months ended June 30, 2021 and 2020, the Company recorded $86,000 and $84,000, respectively, in rent expense that was related to the facility lease arrangement with related parties.

Between March 6, 2018 and December 17, 2019, to obtain funding for working capital purposes, the Company borrowed a total of $2.3 million from Dr. Semechkin and issued an unsecured, non-convertible promissory note in the principal amount of $2.3 million (the “Note”) to Dr. Semechkin. The outstanding principal amount under the Note accrued interest at a rate of 4.5% per annum. The outstanding principal and accrued interest on the Note was due and payable on January 15, 2021 and could be pre-paid without penalty at any time.

On January 15, 2021, the Company and Dr. Semechkin modified the Note to extend the maturity date of the Note to January 15, 2022. No other terms of the Note were modified as a result of the extension.

On March 5, 2021, to obtain additional funding for working capital purposes, the Company further modified the Note and issued an unsecured, non-convertible promissory note (the “New Note”) in the amount of $2.650 million to Dr. Semechkin. In exchange, Dr. Semechkin surrendered the Note and provided additional funding in the amount of $350,000 to the Company. The outstanding principal amount under the New Note accrues interest at a rate of 4.5% per annum. The outstanding principal and accrued interest on the New Note is due and payable on January 15, 2022 and may be pre-paid by the Company without penalty at any time.

8. Commitments and Contingencies

Leases

The Company has three operating leases for real estate in California and Maryland:

• Carlsbad, California – corporate offices with a term date of February 2023 and leased from a related party (see also Note 7 –Related Party Transactions);

• Oceanside, California – primary research facility and laboratory space with a term date of December 2021;

• Frederick, Maryland – mixed laboratory and administrative space with a term date of November 2025.

The Company’s operating leases for real estate are subject to additional variable charges for common area maintenance and other variable costs, and do not include an option to extend the lease term. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of future minimum lease payments over the lease term. As of June 30, 2021, total right-of-use assets and operating lease liabilities were approximately $733,000 and $1.0 million, respectively. All operating lease expense is recognized on a straight-line basis over the lease term. For the three months ended June 30, 2021 and 2020 lease expense totaled $118,000 and $119,000, respectively. For the six months ended June 30, 2021 and 2020 lease expense totaled $236,000 and $237,000, respectively. As of June 30, 2021, the Company had no finance leases.

18

Maturities of lease liabilities are as follows (in thousands):

Years ending December 31,
2021 (remaining six months)	$	257
2022		394
2023		255
2024		233
2025		240
Thereafter		—
Total minimum lease payments		1,379
Less: imputed interest		(356	)
Total future minimum lease payments		1,023
Less: operating lease liabilities, current		(309	)
Operating lease liabilities, net of current portion	$	714

Licensed Patents

The Company has a minimum annual license fee of $75,000 payable in two installments per year to Astellas Pharma pursuant to the amended UMass IP license agreement. The license agreement with Astellas Pharma may be terminated by the Company at any time with a 30-day notice.

9. Segments

The Company operates the business on the basis of three reporting segments, the parent company and two business units: ISCO – therapeutic market; LCT – biomedical market; LSC – anti-aging market.

The Company does not measure the performance of its segments on any asset-based metrics. Therefore, segment information is presented only for operating income (loss). Revenues, expenses and operating income (loss) for the three and six months ended June 30, 2021 and 2020 by market segment were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Biomedical market	$	1,493		$	1,395		$	2,920		$	3,366
Anti-aging market		340			417			571			805
Total revenues		1,833			1,812			3,491			4,171
Operating expenses:
Therapeutic market		745			952			1,558			1,784
Biomedical market		1,078			1,281			2,161			2,722
Anti-aging market		416			411			745			953
Total operating expenses		2,239			2,644			4,464			5,459
Operating income (loss)
Therapeutic market		(745	)		(952	)		(1,558	)		(1,784	)
Biomedical market		415			114			759			644
Anti-aging market		(76	)		6			(174	)		(148	)
Total operating loss	$	(406	)	$	(832	)	$	(973	)	$	(1,288	)

10. Subsequent Events

In August 2021, the Company applied for and received forgiveness of its Second Draw Loan. The amount of forgiveness totaled $476,000, which consisted of unpaid principal and accrued interest. The Company will record the forgiveness of debt as a gain in other income (expense), net on its condensed consolidated statements of operations for the three and nine months ending September 30, 2021.

19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other financial information included elsewhere herein. This information should also be read in conjunction with our audited historical consolidated financial statements which are included in our Form 10-K for the fiscal year ended December 31, 2020 (“Form 10-K”). The discussion contains forward-looking statements, such as our plans, expectations and intentions (including those related to clinical trials and business and expense trends), that are based upon current expectations and that involve risks and uncertainties. Our actual results may differ significantly from management’s expectations. The factors that could affect these forward-looking statements are discussed in the Risk Factors included in our Form 10-K. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any expectations expressed herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best assessment by our management.

Business Overview

We are primarily a research and development company, for the therapeutic market, which has focused on advancing potential clinical applications of human parthenogenetic stem cells (“hpSCs”) for the treatment of various diseases of the central nervous system and liver diseases. We have the following wholly-owned subsidiaries:

• Lifeline Cell Technology, LLC (“LCT”) – for the biomedical market, develops, manufactures and commercializes primary human cell research products including over 200 human cell culture products, including frozen human “primary” cells and the reagents (called “media”) needed to grow, maintain and differentiate the cells;

• Lifeline Skin Care, Inc. (“LSC”) – for the anti-aging market, develops, manufactures and markets a category of anti-aging skin care products based on our proprietary parthenogenetic stem cell technology and small molecule technology;

• Cyto Therapeutics Pty. Ltd. (“Cyto Therapeutics”) – performs research and development for the therapeutic market and is currently conducting clinical trials in Australia for the use of ISC-hpNSC® in the treatment of Parkinson’s disease.

We generated aggregate product sales revenues from our two commercial businesses of $3.5 million and $4.2 million for the six months ended June 30, 2021 and 2020, respectively. We have generated no revenues from our principal operations in therapeutic and clinical product development.

Our products are based on multi-decade experience with human cell culture and a proprietary type of pluripotent stem cells, human parthenogenetic stem cells. Our hpSCs are comparable to human embryonic stem cells (“hESCs”) in that they have the potential to be differentiated into many different cells in the human body. However, the derivation of hpSCs does not require the use of fertilized eggs or the destruction of viable human embryos and also offers the potential for the creation of immune-matched cells and tissues that are less likely to be rejected following transplantation. Our collection of hpSCs, known as UniStemCell™, currently consists of fifteen stem cell lines. We have facilities and manufacturing protocols that comply with the requirements of Good Manufacturing Practice (“GMP”) standards as promulgated in the U.S. Code of Federal Regulations and enforced by the U.S. Food and Drug Administration (“FDA”).

We have never been profitable and have incurred net losses on an annual basis since inception. Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur operating losses for at least the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year.

We do not expect to generate any revenues from sales of any therapeutic products until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, we will seek to fund our operations through public or private equity or debt financings or other sources, including one or more collaborative arrangements with larger companies to share specified development and commercialization expenses. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative effect on our financial condition and ability to develop our product candidates.

20

COVID-19 Pandemic

The impact of the COVID-19 pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world. Impacts to our business have included a reduction in sales volume primarily from media sales in our biomedical market segment and professional channel sales in our anti-aging market segment, temporary or reduced occupancy of portions of our manufacturing facilities, the availability of certain materials used in our packaging, and disruptions or restrictions on our employee's ability to travel to such manufacturing facilities. We have taken precautionary measures to better ensure the health and safety of our workers, including staggering employees’ shifts and isolating at-risk employees.

The scope and duration of these delays and disruptions, and the ultimate impacts of COVID-19 on our operations, are currently unknown. We are continuing to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that we determine are in the best interests of public health and safety. We cannot predict the effects that such actions, or the impact of COVID-19 on global business operations and economic conditions, may continue to have on our business, strategy, collaborations, or financial and operating results.

Market Opportunity and Growth Strategy

Therapeutic Market – Clinical Applications of hpSCs for Disease Treatments. With respect to therapeutic research and product candidates, we focus on applications where cell and tissue therapy is already proven but where there is an insufficient supply of safe and functional cells or tissue. We believe that the most promising potential clinical applications of our technology are: 1) Parkinson’s disease (“PD”); 2) traumatic brain injury (“TBI”); and 3) metabolic/liver diseases. Using our proprietary technologies and know-how, we are creating neural stem cells from hpSCs as a potential treatment of PD, TBI, and stroke, and liver cells from hpSCs that may be able to treat a variety of hepatic and metabolic liver diseases.

Our most advanced project is the neural stem cell program for the treatment of Parkinson’s disease. In 2017, we began our Phase I trial of ISC-hpNSC®, human parthenogenetic stem cell-derived neural stem cells for the treatment of Parkinson’s disease. This trial involved three groups, each with four patients, with each group receiving an increasing amount of ISC-hpNSC® via intracerebral transplantation. Patients were evaluated for 12 months (active phase of the study) with an additional 5-year observational follow-up period to assess safety.

In June 2021 we issued a press release summarizing initial results of our Phase I trial of ISC-hpNSC®. Based on all data collected in the clinical trial, the safety criteria, as defined in the study, was met. Over the course of our study, we observed a potential dose-dependent response. The % OFF-Time, which is the time during the day when levodopa medication is not performing optimally and PD symptoms return, decreased an average 47% from the baseline at 12 months post transplantation in cohort 2. This trend continued through 24 months where the % OFF time in the second cohort dropped by 55% from the initial reading. The quality of life of the patients as measured by the Parkinson's Disease Quality of Life Score-39 (PDQ-39) Summary Index, improved an average 43% for the second cohort at twelve months post-transplantation. This improved to a 45% better score in cohort 2 at 48 months.

We anticipate releasing additional data from our Phase I trial in the second half of 2021 and are evaluating initiating a Phase II trial of ISC-hpNSC®. Although the Phase I study was conducted in Australia, and therefore not subject to FDA oversight, we anticipate that a significant portion of any future studies will be carried out in the United States.

Biomedical Market – Primary Human Cell Research Products. Our wholly-owned subsidiary Lifeline Cell Technology, LLC develops, manufactures and commercializes over 200 human cell culture products, including frozen human “primary” cells and the reagents (called “media”) needed to grow, maintain and differentiate the cells. LCT’s scientists have used a technology called basal medium optimization to systematically produce optimized products designed to culture specific human cell types and to elicit specific cellular behaviors. These techniques also produce products that do not contain non-human animal proteins, a feature desirable to the research and therapeutic markets. Each LCT cell product is quality tested for the expression of specific markers (to assure the cells are the correct type), proliferation rate, viability, morphology and absence of pathogens. Each cell system also contains associated donor information and all informed consent requirements are strictly followed. LCT’s research products are marketed and sold by its internal sales force, OEM partners and LCT brand distributors in Europe and Asia.

Anti-Aging Market – Skin Care Products. Our wholly-owned subsidiary Lifeline Skin Care, Inc. develops, manufactures and offers for sale anti-aging skin care products based on two core technologies: encapsulated extract derived from hpSC and specially selected targeted small molecules. Products containing stem cell technology include: Defensive Day Serum, Recovery Night Serum, Firming Eye Complex, Neck Firming Complex, Aqueous Gel Serum, Intense Moisture Serum, and the Advanced Aqueous Treatment. Products based on the proprietary targeted small molecule technology include: Collagen Booster (Molecular Renewal Serum), Booster, and Brightening Toner. LSC’s products are regulated as cosmetics. LSC’s products are sold domestically through ecommerce partners and through the professional channel (including dermatologists, plastic surgeons, medical, day and resort spas).

21

Results of Operations

Comparison of the Three Months Ended June 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and 2020, together with the dollar and percent change in those items (in thousands):

	Three Months Ended June 30,
	2021			2020			$ Change			% Change
Product sales	$	1,833		$	1,812		$	21			1	%
Cost of sales		770			719			51			7	%
As a % of revenues		42	%		40	%
Research and development		113			200			(87	)		-44	%
Selling and marketing		349			427			(78	)		-18	%
General and administrative		1,007			1,298			(291	)		-22	%
Other income (expense), net		622			(254	)		876			-345	%
Net income (loss)	$	216		$	(1,086	)	$	1,302			-120	%
As a % of revenues		12	%		-60	%

Product Sales

Product sales revenue for the three months ended June 30, 2021 and 2020 was $1.8 million. The increase of $21,000 for the three months ended June 30, 2021 as compared to 2020, or 1%, was primarily attributable to an increase in product sales in our biomedical market segment of $98,000, partially offset by a $77,000 decrease in LSC product sales.

Our media product sales continue to be adversely impacted by COVID-19, largely as a result of reduced demand from our largest original equipment manufacturer customers. For the year ending 2021, we estimate domestic biomedical product sales will be comparable to the year ended 2020. International product sales in our biomedical market have largely recovered and are expected to remain strong for the remainder of the year.

Our anti-aging market segment includes skin care products that are distributed through various ecommerce and professional channels. The market for our skin care products across our ecommerce and professional channels has become increasingly competitive. As such, our anti-aging product sales have experienced a decline in customer acquisition for the three months ended June 30, 2021 as compared to 2020.

Cost of Sales

Cost of sales for the three months ended June 30, 2021 was $770,000, compared to $719,000 for the three months ended June 30, 2020. The increase of $51,000, or 7%, was primarily attributable to a $35,000 increase in costs as a result of an increase in product sales and shipping costs. Profit margins largely remained consistent for the three months ended June 30, 2021 as compared to 2020. We may modify or expand certain product promotions and discounts through the end of 2021 as we continue to assess the ongoing impact of COVID-19 on our business which may have an adverse impact on our profit margins.

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead. We aim to continue refining our manufacturing processes and supply chain management to improve the cost of sales as a percentage of revenue for both LCT and LSC.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2021 was $113,000, compared to $200,000 for the three months ended June 30, 2020. The decrease of $87,000, or 44%, was primarily attributable to a $80,000 decrease in personnel-related costs and stock-based compensation primarily as a result of headcount reductions following the conclusion of the active phase of our Phase 1 clinical study, a $36,000 decrease in consulting expenses, and a $23,000 decrease in materials, supplies and testing related expenses, partially offset by a $44,000 decrease in our research and development tax credit related to qualifiable expenditures from our research and development activities of our Australian subsidiary, Cyto Therapeutics.

22

Our research and development efforts are primarily focused on the development of treatments for Parkinson’s disease, traumatic brain injury and stroke. These projects are long-term investments that involve developing both new stem cell lines and new differentiation techniques that can provide higher purity populations of functional cells. Research and development expenses are expensed as incurred and are accounted for on a project-by-project basis. However, much of our research has potential applicability to each of our projects.

Selling and Marketing Expenses

Selling and marketing expenses for the three months ended June 30, 2021 was $349,000, compared to $427,000 for the three months ended June 30, 2020. The decrease of $78,000, or 18%, was primarily attributable to a $32,000 decrease in personnel-related costs, sales commissions and stock-based compensation primarily as a result of headcount reductions, and a $20,000 decrease in marketing and advertising costs.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2021 was $1.0 million, compared to $1.3 million for the three months ended June 30, 2020. The decrease of $291,000, or 22%, was primarily attributable to a decrease in personnel-related costs and stock-based compensation of $184,000, a $61,000 decrease in legal and audit related costs, and a $40,000 decrease in consulting costs, partially offset by a $14,000 increase in director and officer liability insurance.

Other Income (Expense), Net

Other income, net, for the three months ended June 30, 2021 was $622,000, compared to other expense, net, of $254,000 for the three months ended June 30, 2020. The increase of $876,000 was primarily attributable to a gain on the forgiveness of debt of $661,000 related to our first draw loan (“First Draw Loan”) under the U.S. Small Business Administration’s Paycheck Protection Program (“PPP”), coupled with a decrease of $225,000 for the change in the fair value of the warrant liability during the prior year period. The warrants expired unexercised in March 2021 and, as such, no further change in the fair value of the warrant liability will be recognized.

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020, together with the dollar and percent change in those items (in thousands):

	Six Months Ended June 30,
	2021			2020			$ Change			% Change
Product sales	$	3,491		$	4,171		$	(680	)		-16	%
Cost of sales		1,385			1,576			(191	)		-12	%
As a % of revenues		40	%		38	%
Research and development		328			503			(175	)		-35	%
Selling and marketing		696			944			(248	)		-26	%
General and administrative		2,055			2,436			(381	)		-16	%
Other income (expense), net		590			(171	)		761			-445	%
Net loss	$	(383	)	$	(1,459	)	$	1,076			-74	%
As a % of revenues		-11	%		-35	%

Product Sales

Product sales revenue for the six months ended June 30, 2021 was $3.5 million, compared to $4.2 million for the six months ended June 30, 2020. The decrease of $680,000, or 16%, was primarily attributable to a decrease in media product sales in our biomedical market segment of $431,000, coupled with a decrease in LSC product sales of $234,000 for the six months ended June 30, 2021 as compared to 2020.

Our media product sales continue to be adversely impacted by COVID-19, largely as a result of reduced demand from our largest original equipment manufacturer customers. For the year ending 2021, we estimate domestic biomedical product sales will be comparable to the year ended 2020. International product sales in our biomedical market have largely recovered and are expected to remain strong for the remainder of the year.

23

Our anti-aging market segment includes skin care products that are distributed through various ecommerce and professional channels. Our anti-aging product sales have experienced a significant decline in customer demand for the six months ended June 30, 2021, as compared to 2020, as a result of COVID-19’s impact on the operations of retail and professional medical offices which began to be adversely impacted largely in the second quarter of 2020.

Cost of Sales

Cost of sales for the six months ended June 30, 2021 was $1.4 million, compared to $1.6 million for the six months ended June 30, 2020. The decrease of $191,000, or 12%, was primarily attributable to a $235,000 decrease in costs as a result of a decrease in product sales, partially offset by $87,000 in unfavorable manufacturing variances and absorption due to reduced customer demand. Profit margins largely remained consistent for the six months ended June 30, 2021 as compared to 2020. We may modify or expand certain product promotions and discounts through the end of 2021 as we continue to assess the ongoing impact of COVID-19 on our business which may have an adverse impact on our profit margins.

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead. We aim to continue refining our manufacturing processes and supply chain management to improve the cost of sales as a percentage of revenue for both LCT and LSC.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2021 was $328,000, compared to $503,000 for the six months ended June 30, 2020. The decrease of $175,000, or 35%, was primarily attributable to a $138,000 decrease in personnel-related costs and stock-based compensation primarily as a result of headcount reductions following the conclusion of the active phase of our Phase 1 clinical study, a $40,000 decrease in consulting expenses, and a $32,000 decrease in materials, supplies and testing related expenses, partially offset by a decrease $44,000 decrease in our research and development tax credit related to qualifiable expenditures from our research and development activities of our Australian subsidiary, Cyto Therapeutics.

Our research and development efforts are primarily focused on the development of treatments for Parkinson’s disease, traumatic brain injury and stroke. These projects are long-term investments that involve developing both new stem cell lines and new differentiation techniques that can provide higher purity populations of functional cells. Research and development expenses are expensed as incurred and are accounted for on a project-by-project basis. However, much of our research has potential applicability to each of our projects.

Selling and Marketing Expenses

Selling and marketing expenses for the six months ended June 30, 2021 was $696,000, compared to $944,000 for the six months ended June 30, 2020. The decrease of $248,000, or 26%, was primarily attributable to a $103,000 decrease in personnel-related costs, including temporary services, sales commissions and stock-based compensation primarily as a result of headcount reductions, a $38,000 decrease in marketing and advertising costs, and a $22,000 decrease in marketing samples and materials.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2021 was $2.1 million, compared to $2.4 million for the six months ended June 30, 2020. The decrease of $381,000, or 16%, was primarily attributable to a decrease in personnel-related costs and stock-based compensation of $294,000, a $55,000 decrease in legal and audit related costs, and a $50,000 decrease in consulting costs, partially offset by a $28,000 increase in director and officer liability insurance.

Other Income (Expense), Net

Other income, net, for the six months ended June 30, 2021 was $590,000, compared to other expense, net, of $171,000 for the six months ended June 30, 2020. The increase of $761,000 was primarily attributable to a gain on the forgiveness of debt of $661,000 related to our First Draw Loan under the PPP, coupled with a decrease of $115,000 for the change in the fair value of the warrant liability during the prior year period. The warrants expired unexercised in March 2021 and, as such, no further change in the fair value of the warrant liability will be recognized.

24

Liquidity and Capital Resources

As of June 30, 2021, we had an accumulated deficit of approximately $109.5 million and have, on an annual basis, incurred net losses and negative operating cash flows since inception. Substantially all of our operating losses have resulted from the funding of our research and development programs and general and administrative expenses associated with our operations. We incurred net losses of $383,000 and $1.5 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had cash of approximately $750,000, compared to $689,000 as of December 31, 2020.

In May 2020, we received our First Draw Loan of $654,000 from the PPP which provided additional liquidity to support our current operations. In March 2021, we received a second draw loan of $474,000 from the PPP (“Second Draw Loan”). In June 2021, we applied for and received forgiveness of unpaid principal and accrued interest from our First Draw Loan in the amount of $661,000. In August 2021, we applied for and received forgiveness of unpaid principal and accrued interest from our Second Draw Loan in the amount of $476,000.

Our primary use of cash is to continue to fund our research and development programs and operations.

Cash Flows

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table provides information regarding our cash flows for the six months ended June 30, 2021 and 2020 (in thousands):

	Six Months Ended June 30,
	2021			2020
Net cash provided by (used in) operating activities	$	(757	)	$	247
Net cash used in investing activities		(6	)		(70	)
Net cash provided by financing activities		824			654
Net increase in cash	$	61		$	831

Operating Cash Flows

For the six months ended June 30, 2021, net cash used in operating activities was $757,000, resulting primarily from our net loss of $383,000 and net changes in operating assets and liabilities of $447,000, partially offset by net non-cash adjustments of $73,000. For the six months ended June 30, 2020, net cash provided by operating activities was $247,000, resulting primarily from our net loss of $1.5 million, adjusted for non-cash stock-based compensation expense of $742,000, coupled with net changes in operating assets and liabilities of $537,000. The net changes in operating assets and liabilities were primarily attributable to a $821,000 decrease in accounts receivable and a $238,000 decrease in inventory, partially offset by a $172,000 increase in prepaid expenses and other current assets.

Investing Cash Flows

Net cash used in investing activities for the six months ended June 30, 2021 was $6,000, compared to $70,000 for the six months ended June 30, 2020. The decrease of $64,000 was attributable to a decrease in payments for patent licenses of $42,000 and a decrease in purchases of property and equipment of $22,000 year-over-year.

Financing Cash Flows

Net cash provided by financing activities for the six months ended June 30, 2021 was $824,000, compared to $654,000 for the six months ended June 30, 2020. The increase was attributable to proceeds from our Second Draw Loan from the Paycheck Protection Program of $474,000, coupled with proceeds from a note payable from a related party of $350,000.

Funding Requirements

Management continues to evaluate various financing sources and options to raise working capital to help fund our current research and development programs and operations. We will need to obtain significant additional capital from sources including equity and/or debt financings, license arrangements, grants and/or collaborative research arrangements to sustain our operations and develop products. Unless we obtain additional financing, we do not have sufficient cash on hand to sustain our operations at least

25

through one year after the issuance date. The timing and degree of any future capital requirements will depend on many factors, including:

• the accuracy of the assumptions underlying our estimates for capital needs in 2021 and beyond;

• the extent that revenues from sales of LSC and LCT products cover the related costs and provide capital;

• scientific progress in our research and development programs;

• the magnitude and scope of our research and development programs and our ability to establish, enforce and maintain strategic arrangements for research, development, clinical testing, manufacturing and marketing;

• our progress with preclinical development and clinical trials;

• the time and costs involved in obtaining regulatory approvals;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;

• the number and type of product candidates that we pursue;

• demand from our largest original equipment manufacturer customers; and

• the development of major public health concerns, including COVID-19 or other pandemics arising globally, and the current and future impact that such concerns may have on our operations and funding requirements.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. As the pandemic continues and restrictions remain in place or new restrictions are imposed, it may make any additional debt or equity financing more difficult, more costly and more dilutive. Our failure to raise capital or enter into applicable arrangements when needed would have a negative impact on our financial condition. Additional debt financing may be expensive and require us to pledge all or a substantial portion of its assets. Further, if additional funds are obtained through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of its technologies, product candidates or products that we would otherwise seek to develop and commercialize on our own. If sufficient capital is not available, we may be required to delay, reduce the scope of or eliminate one or more of our product initiatives.

We currently have no revenue generated from our principal operations in therapeutic and clinical product development through research and development efforts. There can be no assurance that we will be successful in maintaining our normal operating cash flow and obtaining additional funds and that the timing of our capital raising or future financing will result in cash flow sufficient to sustain our operations at least through one year after the issuance date.

Based on the factors above, there is substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements were prepared assuming that we will continue to operate as a going concern. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Management’s plans in regard to these matters are focused on managing our cash flow, the proper timing of our capital expenditures, and raising additional capital or financing in the future.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America and the rules and regulations of the Securities and Exchange Commission. The preparation of these condensed consolidated financial statements requires us to make judgements and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statement, and the reported amounts of revenues, costs and expenses during the reporting periods.

Our estimates are based on our historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and amount of expense recognized that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We evaluate our estimates and assumptions on an ongoing basis. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in estimates.

26

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2021 from those disclosed in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 1 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

There have been no material changes to our contractual obligations and commitments outside the ordinary course of business during the six months ended June 30, 2021 from those disclosed in “Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

As of June 30, 2021, we had no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and are not required to provide the information required under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act, the Company, with the participation of management, including our Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in such rules) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that, at June 30, 2021, our disclosure controls and procedures were effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls during the six months ended June 30, 2021 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

27

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Except for the risk factor set forth below, there have been no material changes to the risk factors disclosed in “Part I – Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 30, 2021.

Many of the key materials in our products and packaging, and manufacturing services for certain of our other products, are obtained from a single or limited number of suppliers. Thus, we are at risk of shortages, price increases, tariffs, changes, delay, or discontinuation of key materials and manufacturing services, which could disrupt and materially and adversely affect our business.

Many of the key materials used to manufacture or package our LCT products come from limited or single sources of supply. In addition, in some cases primarily for our LSC products, we rely only on one manufacturer or a limited number of contract manufacturers to fill and finish, test, and package our products. In general, our contract manufacturers fabricate or procure certain materials and packaging on our behalf, subject to certain approved procedures or supplier lists. We do not have firm commitments from many of these suppliers and manufacturers to provide all materials and services, or to provide them in quantities and on timelines that we may require.

Due to our reliance on the key materials provided by suppliers and services provided by contract manufacturers, we are subject to the risk of shortages and long lead times or other disruptions in the supply of certain materials or services.  For example, our ability to ship LCT products has recently been adversely affected by shortages in plastic resin that is used to make the packaging containers for those products.  Our ongoing efforts to identify alternative suppliers (for many of the single-sourced or limited-sourced materials used in our products) and alternative contract manufacturers (for the assembly of our LSC products) may not be successful. We are subject to the risk that our suppliers may discontinue or modify the materials they provide to us, or that the materials may cease to be available on commercially reasonable terms, or at all. We have in the past experienced, and may in the future experience, materials shortages or delays or other problems in product assembly, and the availability of these materials or services may be difficult to predict. For example, our suppliers or manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, the occurrence of a contagious disease or illness, such as COVID-19, component or material shortages, cost increases, acquisitions, insolvency, bankruptcy, business shutdowns, trade restrictions, changes in legal or regulatory requirements, or other similar problems. In particular, the current COVID-19 pandemic has caused disruptions in our supply chain. To the extent COVID-19 pandemic continues and results in continuing restrictions, disruptions in our supply chain may continue and cause shortages of our ability to sell products, which could materially and adversely impact our financial results.

Additionally, various sources of supply-chain risk, including strikes or shutdowns at delivery ports or loss of or damage to our products while they are in transit or storage, intellectual property theft, losses due to tampering, third-party vendor issues with quality or sourcing control, failure by our suppliers to comply with applicable laws and regulation, potential tariffs or other trade restrictions, or other similar problems, could limit or delay the supply of our products or harm our reputation. In the event of a shortage or supply interruption from suppliers or contract manufacturers, we may not be able to develop alternate sources quickly, cost-effectively, or at all.  Any interruption or delay in material supply or manufacturing, any increases in material or manufacturing costs, or the inability to obtain these materials or services from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to provide our products on a timely basis. This could materially and adversely affect our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

28

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

29

Item 6. Exhibits

Exhibit Index

Exhibit	Description
3.1	Certificate of Incorporation (incorporated by reference to Exhibit 3.4 of the Registrant’s Form 10-SB filed on April 4, 2006).
3.2	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Preliminary Information Statement on Form 14C filed on December 29, 2006).
3.3	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on June 4, 2012).
3.4	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on May 14, 2014).
3.5	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on July 28, 2015).
3.6	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on May 19, 2016).
3.7	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on May 6, 2011).
4.1	Form of Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10-KSB filed on April 9, 2007).
4.2	Certification of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 4.1 of the Registrant’s Form 8-K filed on May 12, 2008).
4.3	Certification of Designation of Series D Preferred Stock (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed on January 5, 2009).
4.4	Certificate of Designation of Series G Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on March 14, 2012).
4.5	Certificate of Preferences, Rights and Limitations of Series I-1 Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on March 10, 2016).
4.6	Certificate of Preferences, Rights and Limitations of Series I-2 Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 of the Registrant’s Form 8-K filed on March 10, 2016).
4.7	Certification of Elimination for Series I-1 Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K Filed on June 30, 2021).
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1*	Section 1350 Certification of Chief Executive Officer.
32.2*	Section 1350 Certification of Chief Financial Officer.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (embedded within the Inline XBRL document)

30

Exhibit	Description
* Filed herewith.

31

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INTERNATIONAL STEM CELL CORPORATION
Dated: August 13, 2021
	By:	/s/    ANDREY SEMECHKIN
	Name:	Andrey Semechkin
	Title:	Chief Executive Officer (Principal Executive Officer)
	By:	/s/    SOPHIA GARNETTE
	Name:	Sophia Garnette
	Title:	Vice President, Legal Affairs and Operations (Principal Financial Officer)

32

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Andrey Semechkin, Chief Executive Officer of International Stem Cell Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Stem Cell Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2021

By:	/s/ Andrey Semechkin
	Andrey Semechkin
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Sophia Garnette, Vice President, Legal Affairs and Operations of International Stem Cell Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of International Stem Cell Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2021

By:	/s/ Sophia Garnette
	Sophia Garnette
	Vice President, Legal Affairs and Operations
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of International Stem Cell Corporation (the “Company”) for the quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrey Semechkin, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2021

By:	/s/ Andrey Semechkin
	Andrey Semechkin
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of International Stem Cell Corporation (the “Company”) for the quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sophia Garnette, Vice President, Legal Affairs and Operations of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2021

By:	/s/ Sophia Garnette
	Sophia Garnette
	Vice President, Legal Affairs and Operations
	(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 12, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	INTERNATIONAL STEM CELL CORPORATION
Entity Central Index Key	0001355790
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity File Number	0-51891
Entity Tax Identification Number	20-4494098
Entity Address, Address Line One	5950 Priestly Drive
Entity Address, City or Town	Carlsbad
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92008
City Area Code	760
Local Phone Number	940-6383
Entity Common Stock, Shares Outstanding		8,004,389
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash	$ 750,000	$ 689,000
Accounts receivable, net	547,000	403,000
Inventory, net	1,073,000	917,000
Prepaid expenses and other current assets	416,000	174,000
Total current assets	2,786,000	2,183,000
Non-current inventory	363,000	371,000
Property and equipment, net	451,000	534,000
Intangible assets, net	1,228,000	1,262,000
Right-of-use assets	733,000	874,000
Deposits and other assets	50,000	63,000
Total assets	5,611,000	5,287,000
Current liabilities:
Accounts payable	469,000	360,000
Accrued liabilities	521,000	386,000
Operating lease liabilities, current	309,000	346,000
Advances	250,000	250,000
Related party note payable	2,882,000
Paycheck Protection Program loan, current		141,000
Total current liabilities	4,431,000	1,483,000
Related party note payable		2,475,000
Paycheck Protection Program loan, net of current portion	476,000	517,000
Operating lease liabilities, net of current portion	714,000	845,000
Total liabilities	5,621,000	5,320,000
Commitments and contingencies (Note 8)
Stockholders' Deficit:
Common stock, $0.001 par value; 120,000,000 shares authorized; 8,004,389 and 7,539,089 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	8,000	8,000
Additional paid-in capital	105,175,000	104,769,000
Accumulated deficit	(109,498,000)	(109,115,000)
Total stockholders' deficit	(4,310,000)	(4,333,000)
Total liabilities, redeemable convertible preferred stock and stockholders' deficit	5,611,000	5,287,000
Series D Redeemable Convertible Preferred Stock [Member]
Current liabilities:
Series D redeemable convertible preferred stock, $0.001 par value; 50 shares authorized; 43 shares issued and outstanding; liquidation preference of $4,300 at June 30, 2021 and December 31, 2020	4,300,000	4,300,000
Nonredeemable Convertible Preferred Stock [Member]
Stockholders' Deficit:
Non-redeemable convertible preferred stock, $0.001 par value; 10,004,310 and 10,006,310 shares authorized, 5,254,310 and 5,255,124 shares issued and outstanding, liquidation preference of $9,759 and $10,565 at June 30, 2021 and December 31, 2020, respectively	$ 5,000	$ 5,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Non-redeemable convertible preferred stock, par value	$ 0.001
Non-redeemable convertible preferred stock, shares authorized	20,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	8,004,389	7,539,089
Common stock, shares outstanding	8,004,389	7,539,089
Series D Redeemable Convertible Preferred Stock [Member]
Temporary equity, par value	$ 0.001	$ 0.001
Temporary equity, shares authorized	50	50
Temporary equity, shares issued	43	43
Temporary equity, shares outstanding	43	43
Temporary equity, liquidation preference	$ 4,300	$ 4,300
Nonredeemable Convertible Preferred Stock [Member]
Non-redeemable convertible preferred stock, par value	$ 0.001	$ 0.001
Non-redeemable convertible preferred stock, shares authorized	10,004,310	10,006,310
Non-redeemable convertible preferred stock, shares issued	5,254,310	5,255,124
Non-redeemable convertible preferred stock, shares outstanding	5,254,310	5,255,124
Liquidation preference	$ 9,759	$ 10,565

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Total revenues	$ 1,833	$ 1,812	$ 3,491	$ 4,171
Type Of Revenue Extensible List	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Operating expenses:
Cost of sales	$ 770	$ 719	$ 1,385	$ 1,576
Research and development	113	200	328	503
Selling and marketing	349	427	696	944
General and administrative	1,007	1,298	2,055	2,436
Total operating expenses	2,239	2,644	4,464	5,459
Loss from operations	(406)	(832)	(973)	(1,288)
Other income (expense):
Gain on forgiveness of debt	661		661
Change in fair value of warrant liability		(225)		(115)
Interest expense	(39)	(29)	(71)	(56)
Total other income (expense), net	622	(254)	590	(171)
Net income (loss)	$ 216	$ (1,086)	$ (383)	$ (1,459)
Net income (loss) per common share, basic and diluted	$ 0.03	$ (0.14)	$ (0.05)	$ (0.19)
Weighted-average common shares used to compute net income (loss) per share, basic and diluted	7,767	7,539	7,654	7,539

XML

Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Series D Redeemable Convertible Preferred Stock [Member]	Non-redeemable Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2019	$ (2,888)		$ 5	$ 8	$ 103,490	$ (106,391)
Beginning balance at Dec. 31, 2019		$ 4,300
Beginning balance, shares at Dec. 31, 2019			5,255	7,539
Stock-based compensation	418				418
Net income (loss)	(373)					(373)
Ending balance at Mar. 31, 2020	(2,843)		$ 5	$ 8	103,908	(106,764)
Ending balance at Mar. 31, 2020		4,300
Ending balance, shares at Mar. 31, 2020			5,255	7,539
Beginning balance at Dec. 31, 2019	(2,888)		$ 5	$ 8	103,490	(106,391)
Beginning balance at Dec. 31, 2019		4,300
Beginning balance, shares at Dec. 31, 2019			5,255	7,539
Net income (loss)	(1,459)
Ending balance at Jun. 30, 2020	(3,605)		$ 5	$ 8	104,232	(107,850)
Ending balance at Jun. 30, 2020		4,300
Ending balance, shares at Jun. 30, 2020			5,255	7,539
Beginning balance at Mar. 31, 2020	(2,843)		$ 5	$ 8	103,908	(106,764)
Beginning balance at Mar. 31, 2020		4,300
Beginning balance, shares at Mar. 31, 2020			5,255	7,539
Stock-based compensation	324				324
Net income (loss)	(1,086)					(1,086)
Ending balance at Jun. 30, 2020	(3,605)		$ 5	$ 8	104,232	(107,850)
Ending balance at Jun. 30, 2020		4,300
Ending balance, shares at Jun. 30, 2020			5,255	7,539
Beginning balance at Dec. 31, 2020	(4,333)		$ 5	$ 8	104,769	(109,115)
Beginning balance at Dec. 31, 2020		4,300
Beginning balance, shares at Dec. 31, 2020			5,255	7,539
Stock-based compensation	234				234
Net income (loss)	(599)					(599)
Ending balance at Mar. 31, 2021	(4,698)		$ 5	$ 8	105,003	(109,714)
Ending balance at Mar. 31, 2021		4,300
Ending balance, shares at Mar. 31, 2021			5,255	7,539
Beginning balance at Dec. 31, 2020	(4,333)		$ 5	$ 8	104,769	(109,115)
Beginning balance at Dec. 31, 2020		4,300
Beginning balance, shares at Dec. 31, 2020			5,255	7,539
Net income (loss)	(383)
Ending balance at Jun. 30, 2021	(4,310)		$ 5	$ 8	105,175	(109,498)
Ending balance at Jun. 30, 2021		4,300
Ending balance, shares at Jun. 30, 2021			5,254	8,004
Beginning balance at Mar. 31, 2021	(4,698)		$ 5	$ 8	105,003	(109,714)
Beginning balance at Mar. 31, 2021		4,300
Beginning balance, shares at Mar. 31, 2021			5,255	7,539
Conversion of series I-1 preferred stock, shares			(1)	465
Stock-based compensation	172				172
Net income (loss)	216					216
Ending balance at Jun. 30, 2021	$ (4,310)		$ 5	$ 8	$ 105,175	$ (109,498)
Ending balance at Jun. 30, 2021		$ 4,300
Ending balance, shares at Jun. 30, 2021			5,254	8,004

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net loss	$ (383)	$ (1,459)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	130	128
Operating lease expense	141	132
Stock-based compensation	406	742
Gain on forgiveness of debt	(661)
Change in fair value of warrant liability		115
Interest expense on related party note payable	57	52
Changes in operating assets and liabilities:
Accounts receivable	(144)	821
Inventory, net	(148)	238
Prepaid expenses and other current assets	(242)	(172)
Deposits and other assets	13	19
Accounts payable	109	(75)
Accrued liabilities	133	(142)
Operating lease liabilities	(168)	(152)
Net cash provided by (used in) operating activities	(757)	247
Cash flows from investing activities
Purchases of property and equipment		(22)
Payments for patent licenses	(6)	(48)
Net cash used in investing activities	(6)	(70)
Cash flows from financing activities
Proceeds from Paycheck Protection Program loans	474	654
Proceeds from note payable from a related party	350
Net cash provided by financing activities	824	654
Net increase in cash	61	831
Cash, beginning of period	689	484
Cash, end of period	750	1,315
Supplemental disclosure of cash flow information:
Cash paid for interest	4	3
Supplemental disclosure of non-cash investing and financing activities:
Gain on forgiveness of debt	$ 661
Right-of-use asset obtained in exchange for operating lease liability		421
Patent license costs included in accrued liabilities		$ 7

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

1. Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

International Stem Cell Corporation (the “Company”) was organized in Delaware in June 2005 and is publicly traded on the OTCQX under the symbol “ISCO”. The Company is primarily a research and development company, for the therapeutic market, which has focused on advancing potential clinical applications of human parthenogenetic stem cells (“hpSCs”) for the treatment of various diseases of the central nervous system and liver diseases. The Company has the following wholly-owned subsidiaries:

• Lifeline Cell Technology, LLC (“LCT”) – for the biomedical market, develops, manufactures and commercializes primary human cell research products including over 200 human cell culture products, including frozen human “primary” cells and the reagents (called “media”) needed to grow, maintain and differentiate the cells;

• Lifeline Skin Care, Inc. (“LSC”) – for the anti-aging market, develops, manufactures and markets a category of anti-aging skin care products based on the Company’s proprietary parthenogenetic stem cell technology and small molecule technology;

• Cyto Therapeutics Pty. Ltd. (“Cyto Therapeutics”) – performs research and development (“R&D”) for the therapeutic market and is currently conducting clinical trials in Australia for the use of ISC-hpNSC® in the treatment of Parkinson’s disease.

COVID-19 Pandemic

The COVID-19 pandemic has caused business disruptions in the Company’s business globally. The Company’s condensed consolidated financial statements reflect judgments and estimates that could change in the future as a result of the COVID-19 pandemic. For the six months ended June 30, 2021, the Company experienced a year-over-year decline in product sales. In response, the Company has reduced its capital spending and, where possible, operating expenses while facilitating ongoing safe and reliable operations. As of the date of this report, the Company expects the COVID-19 pandemic will continue to adversely impact its business, financial condition, liquidity, and future results of operations. The full extent to which the COVID-19 pandemic will impact the Company remains uncertain and ultimately will be dictated by the length and severity of the pandemic, as well as the economic recovery and federal, state and local government actions taken in response. The Company is continuing to monitor the impact of COVID-19 on the Company’s operations, workforce, suppliers, customers and industry.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows for the periods presented. The operating results presented in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s annual report on Form 10-K filed with the SEC on March 30, 2021.

Liquidity and Going Concern

The Company had an accumulated deficit of approximately $109.5 million as of June 30, 2021 and has, on an annual basis, incurred net losses and negative operating cash flows since inception. The Company has had no revenue from its principal operations in therapeutic and clinical product development through research and development efforts. Unless the Company obtains additional financing, the Company does not have sufficient cash on hand to sustain operations at least through one year after the issuance date of these condensed consolidated financial statements.

There can be no assurance that the Company will be successful in maintaining normal operating cash flow or obtaining additional funding. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional financing. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations. The Company will need to obtain significant additional funding from sources, including through debt and/or equity financing, license arrangements, grants and/or collaborative research arrangements to sustain its operations and develop products.

The timing and degree of any future capital requirements will depend on many factors, including:

• the accuracy of the assumptions underlying the estimates for capital needs in 2021 and beyond;

• the extent that revenues from sales of LSC and LCT products cover the related costs and provide capital;

• scientific progress in research and development programs;

• the magnitude and scope of the Company’s research and development programs and its ability to establish, enforce and maintain strategic arrangements for research, development, clinical testing, manufacturing and marketing;

• the progress with preclinical development and clinical trials;

• the time and costs involved in obtaining regulatory approvals;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;

• the number and type of product candidates that the Company decides to pursue;

• demand from the Company’s largest original equipment manufacturer customers; and

• the development of major public health concerns, including COVID-19 or other pandemics arising globally, and the current and future impact that such concerns may have on the Company’s operations and funding requirements.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including inconsistent liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. As the pandemic continues and restrictions remain in place or new restrictions are imposed, it may make any additional debt and/or equity financing more difficult, more costly and more dilutive.

In addition, debt financing may be expensive and require the Company to pledge all or a substantial portion of its assets. If additional funds are obtained through arrangements with collaborative partners, these arrangements may require the Company to relinquish rights to some of its technologies, product candidates or products that the Company would otherwise seek to develop and commercialize on its own. Furthermore, if sufficient capital is not available, the Company may be required to delay, reduce the scope of or eliminate one or more of its product initiatives. The Company’s failure to raise capital or enter into applicable arrangements when needed would have a negative impact on its financial condition.

Principles of Consolidation and Foreign Currency Transactions

The condensed consolidated financial statements include the accounts of International Stem Cell Corporation and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The functional currency of the Company and its subsidiaries, including its wholly-owned Australian subsidiary, Cyto Therapeutics, is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the respective balance sheet dates. Revenue and expenses are translated at the average rate in effect on the date of the transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in general and administrative expense in the accompanying condensed consolidated statements of operations and were not material for the periods presented.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements. Significant estimates include patent life (remaining legal life versus remaining useful life), inventory carrying values, allowance for excess and obsolete inventories, allowance for sales returns and doubtful accounts, and the fair value of stock option grants using the Black-Scholes option valuation model. Actual results could differ from those estimates.

Segments

The Company’s chief operating decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information by each reportable company’s statement of operations. The Company operates the business on the basis of three reporting segments, the parent company and two business units: ISCO – therapeutic market; LCT – biomedical market, and; LSC – anti-aging market.

Inventory

Inventory is accounted for using the average cost and first-in, first-out (“FIFO”) methods for LCT cell culture media and reagents, average cost and specific identification methods for LSC products, and specific identification method for other LCT products. Inventory balances are stated at the lower of cost or net realizable value. Laboratory supplies used in the research and development process are expensed as consumed. LCT’s inventory has a long product life cycle, does not have a shelf life when frozen, and future demand is uncertain. As such, at each reporting period, the Company estimates its reserve for allowance and obsolescence using historical sales data and inventory turnover rates. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. If the Company is able to sell such inventory, any related reserves would be reduced in the period of sale. The value of the inventory that is not expected to be sold within twelve months of the current reporting period is classified as non-current inventory on the accompanying condensed consolidated balance sheets.

Accounts Receivable

Trade accounts receivable are recorded at the net invoice value and are not interest bearing. Accounts receivable primarily consist of trade accounts receivable from the sales of LCT’s products, timing of cash receipts by the Company related to LSC credit card sales to customers, as well as LSC trade receivable amounts related to spa and distributor sales. The Company considers receivables past due based on the contractual payment terms. The Company reviews its exposure to accounts receivable and reserves specific amounts if collectability is no longer reasonably assured. The Company recorded an allowance for doubtful accounts of $3,000 and $12,000 as of June 30, 2021 and December 31, 2020, respectively.

Research and Development Tax Credit Receivable

As of June 30, 2021, the Company recognized a research and development tax credit receivable of $113,000 within prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets earned by its wholly-owned subsidiary, Cyto Therapeutics, which conducts various research and development activities on the Company’s product candidates in Australia. Under Australian tax law, the Australian Taxation Office provides for a refundable tax credit in the form of a cash refund equal to 43.5% of qualified research and development expenditures, not to exceed established thresholds. The Company recognizes the R&D tax credit as a reduction to research and development expense when there is reasonable assurance that the tax credit will be received, the relevant expenses have been incurred, and the amount can be reliably measured.

Advances

On June 18, 2008, the Company entered into an agreement with BioTime, Inc. (“BioTime”), whereby BioTime paid an advance of $250,000 to LCT to produce, make, and distribute certain products. The $250,000 advance will be paid down with the first $250,000 of net revenues that otherwise would be allocated to LCT under the agreement. As of June 30, 2021, no revenues were realized and attributable to BioTime under this agreement.

Property and Equipment

Property and equipment are stated at cost. The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years. Costs related to leasehold improvements are capitalized and amortized over the shorter of the remaining term of the lease or the estimated life of the asset.

Intangible Assets

Intangible assets consist of acquired patent licenses and capitalized legal fees related to the acquisition, filing, maintenance, and defense of patents and trademarks. Amortization begins once the patent is issued by the appropriate authoritative bodies. In the period in which a patent application is rejected or efforts to pursue the patent are abandoned, all the related accumulated costs are expensed. Patents and other intangible assets are amortized on a straight-line basis over the shorter of the useful life of the underlying patent, which is generally 15 years, or when the intangible asset is rejected or abandoned. All amortization expense related to intangible assets is included in general and administrative expense in the accompanying condensed consolidated statements of operations.

Long-Lived Asset Impairment

The Company reviews long-lived assets for impairment when events or changes in circumstances (“triggering event”) indicate that the carrying value of an asset or group of assets may not be recovered. If a triggering event is determined to have occurred, the carrying value of an asset or group of assets is compared to the future undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying value exceeds the undiscounted cash flows of the asset or group of assets, then impairment exists. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Revenue Recognition

Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following five-step process:

1. Identify the contract with the customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when (or as) each performance obligation is satisfied

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following table presents the Company's revenue disaggregated by segment, product and geography (in thousands):

Biomedical market:

	Three Months Ended June 30, 2021									Six Months Ended June 30, 2021
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	186	$	171	$	357		24	%	$	351	$	329	$	680		23	%
Media		939		197		1,136		76	%		1,912		328		2,240		77	%
Total	$	1,125	$	368	$	1,493		100	%	$	2,263	$	657	$	2,920		100	%

	Three Months Ended June 30, 2020									Six Months Ended June 30, 2020
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	213	$	87	$	300		22	%	$	475	$	204	$	679		20	%
Media		994		85		1,079		77	%		2,461		210		2,671		79	%
Other		16		—		16		1	%		16		—		16		1	%
Total	$	1,223	$	172	$	1,395		100	%	$	2,952	$	414	$	3,366		100	%

Anti-aging market:

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Total		% of Total			Total		% of Total			Total		% of Total			Total		% of Total
	Revenues		Revenues			Revenues		Revenues			Revenues		Revenues			Revenues		Revenues
Skin care sales channels
Ecommerce	$	245		72	%	$	299		72	%	$	411		72	%	$	522		65	%
Professional		95		28	%		118		28	%		160		28	%		283		35	%
Total	$	340		100	%	$	417		100	%	$	571		100	%	$	805		100	%

The Company's revenue consists primarily of sales of products from its two revenue-generating operating segments, the biomedical market and anti-aging market business segments. The biomedical market segment markets and sells primary human cell research products with two product categories, cells and media, which are sold both domestically within the United States and internationally. The anti-aging market segment markets and sells a line of skincare products sold through two sales channels: ecommerce and professional. The ecommerce channel sells direct to customers through online orders, while professional sales are primarily to spas, salons and other skincare providers.

Contract terms for unit price, quantity, shipping and payment are governed by sales agreements, invoices or online order forms which the Company considers to be a customer's contract in all cases. The unit price is considered the observable stand-alone selling price for the performance obligation(s) within the arrangements. Any promotional or volume sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price.

The Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Product sales generally consist of a single performance obligation that the Company satisfies at a point in time (i.e., upon delivery of the product).

For LSC products, ecommerce sales are primarily paid through credit card charges, while professional sales are invoiced. The professional sales and biomedical products' standard payment terms for its customers are generally 30 days after the Company satisfies the performance obligation(s).

The Company elects to account for shipping and handling costs as activities to fulfill the promise to transfer the goods to a customer. As a result, no consideration is allocated to shipping and handling costs. Rather, the Company accrues the cost of shipping and handling upon shipment of the product, and all contract revenue (i.e., the transaction price) is recognized at the same time.

Variable Consideration

The Company records revenue from customers in an amount that reflects the consideration it expects to be entitled to after transferring control of those goods or services to a customer. From time to time, the Company offers sales promotions on its products such as discounts and free product offers. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur and is updated at the end of each reporting period as additional information becomes available.

Contract Balances

The Company records a receivable when it has an unconditional right to receive consideration after a performance obligation is satisfied. As of June 30, 2021 and December 31, 2020, accounts receivable, net, totaled $547,000 and $403,000, respectively. During the six months ended June 30, 2021 and 2020, the Company did not incur material write-offs of its accounts receivable.

Practical Expedients

The Company has elected the practical expedient to not determine whether contacts with customers contain significant financing components. The Company pays commissions on certain sales for its biomedical and anti-aging product markets once the customer payment has been received, which are accrued at the time of the sale. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. In addition, the Company has elected to exclude sales taxes consideration from the determined transaction price.

Allowance for Sales Returns

The Company’s anti-aging products have a 30-day product return guarantee; however, the Company determined that there is a low probability that returns will occur based on its historical rate of returns. Historically, returns have not been significant and are recognized as a reduction to current period revenue. As of June 30, 2021 and December 31, 2020, the Company recorded no allowance for sales returns.

Cost of Sales

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead. Certain of the Company’s licensed technology agreements may require the Company to pay royalties based on the future sale of the Company’s products. Such royalties will be recorded as a component of cost of sales when incurred. Additionally, milestone payments or the amortization of license fees related to developed technologies used in the Company’s products will be included as a component of cost of sales to the extent that such payments become due in the future.

Research and Development Costs

Research and development costs, which are expensed as incurred, primarily consist of salaries and benefits associated with research and development personnel, overhead and occupancy costs, contract services costs and amortization of license costs for technology used in research and development with alternative future uses, offset by the research and development tax credit provided by the Australian Taxation Office for qualified expenditures.

Stock-Based Compensation

The cost of a stock-based award is measured at the grant date based on the estimated fair value of the award, and is recognized as expense on a straight-line basis, net of forfeitures which are recognized as incurred, over the requisite service period of the award. The fair value of stock options is estimated using the Black-Scholes option valuation model, which requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. The fair value of restricted stock awards is based on the market value of the Company’s common stock on the date of grant.

Fair Value of Financial Instruments

The Company believes that the carrying value of its cash, accounts receivables, accounts payable, accrued liabilities, Paycheck Protection Program loan and related party note payable as of June 30, 2021 and December 31, 2020 approximate their fair values because of the short-term nature of those instruments.

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1:  Observable inputs such as quoted prices in active markets.

Level 2:  Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of June 30, 2021, the Company had no financial assets or liabilities measured at fair value on a recurring basis. As of December 31, 2020, the Company had outstanding a warrant liability which was measured at fair value on a recurring basis. The fair value of the warrant liability was calculated using the Monte-Carlo simulation model, which required the use of certain estimates. As of December 31, 2020, the fair value of the warrant liability was estimated to be zero.

Income Taxes

The Company accounts for income taxes in accordance with applicable authoritative guidance, which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Potentially dilutive common stock equivalents are comprised of stock options, common stock warrants and convertible preferred stock. For the three and six months ended June 30, 2021 and 2020, there was no difference in the number of shares used to calculate basic and diluted shares outstanding.

For the three and six months ended June 30, 2021 and 2020, the following common stock options, common stock warrants and convertible preferred stock were not included in the diluted net income (loss) per share calculation because the effect would be anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options outstanding		4,545,211		4,620,033		4,386,367		4,739,281
Common stock warrants outstanding		—		3,948,951		—		3,950,002
Redeemable convertible preferred stock		2,457,143		2,457,143		2,457,143		2,457,143
Non-redeemable convertible preferred stock		3,452,533		3,675,135		3,563,219		3,675,135
Total		10,454,887		14,701,262		10,406,729		14,821,561

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in stockholders’ equity except those resulting from investments by owners and distributions to owners. The Company did not have any items of comprehensive income (loss) other than net income (loss) from operations for the three and six months ended June 30, 2021 and 2020.

Customer Concentrations

During the six months ended June 30, 2021, two customers accounted for approximately 35% and 10%, respectively, of consolidated revenues. During the six months ended June 30, 2020, one customer accounted for approximately 47% of consolidated revenues. As of June 30, 2021 and December 31, 2020, the two customers accounted for approximately 42% and 62%, respectively, of accounts receivable, net. No other single customer accounted for more than 10% of revenues for the periods then ended for any segment.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The new standard will be effective for the Company on January 1, 2023 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded features that could be recognized separately from the host contract. Consequently, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 also requires use of the if-converted method in the diluted earnings per share calculation for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for smaller reporting companies, with early adoption permitted. The new standard will be effective for the Company on January 1, 2024 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application, and the simplification, of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

XML

Inventory

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Inventory

2. Inventory

The components of inventory are as follows (in thousands):

	June 30,			December 31,
	2021			2020
Raw materials	$	595		$	427
Work in process		411			481
Finished goods		994			991
		2,000			1,899
Less: allowance for inventory excess and obsolescence		(564	)		(611	)
Total current and non-current inventory, net	$	1,436		$	1,288
Inventory, net	$	1,073		$	917
Non-current inventory		363			371
Total current and non-current inventory, net	$	1,436		$	1,288

During the six months ended June 30, 2021, the Company disposed of obsolete inventory in the amount of $45,000. The inventory had been fully reserved for and the write-off had no impact on the Company’s consolidated statements of operations for the periods presented.

XML

Property and Equipment

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment consist of the following (in thousands):

	June 30,			December 31,
	2021			2020
Machinery and equipment	$	1,661		$	1,661
Computer equipment and software		243			241
Office equipment		230			230
Leasehold improvements		1,303			1,303
Construction in progress		1			3
		3,438			3,438
Less: accumulated depreciation and amortization		(2,987	)		(2,904	)
Property and equipment, net	$	451		$	534

Depreciation and amortization expense for the three months ended June 30, 2021 and 2020 was $41,000 and $43,000, respectively. Depreciation and amortization expense for the six months ended June 30, 2021 and 2020 was $83,000.

XML

Intangible Assets

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

4. Intangible Assets

Intangible Assets consists of the following (in thousands):

	June 30,			December 31,
	2021			2020
Patents	$	2,299		$	2,286
Less: accumulated amortization		(1,146	)		(1,099	)
		1,153			1,187
Indefinite life logos and trademarks		75			75
Intangible assets, net	$	1,228		$	1,262

Amortization expense for the three months ended June 30, 2021 and 2020 was $23,000. Amortization expense for the six months ended June 30, 2021 and 2020 was $47,000 and $45,000, respectively.

XML

Paycheck Protection Program Loan

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Paycheck Protection Program Loan

5. Paycheck Protection Program Loan

In May 2020, the Company received a loan of $654,000 from its lender under the Paycheck Protection Program (“First Draw Loan”). The Paycheck Protection Program (“PPP”), as amended, was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The First Draw Loan has a two-year term and bears interest at a rate of 1% per annum. Principal and interest payments are deferred for ten months following the loan forgiveness period, which is defined as the 24-week period following the loan origination date, at which time the loan balance is payable in monthly installments unless the Company applies for, and receives, forgiveness in accordance with the CARES Act and the terms of the loan executed by the Company and its lender. As required by the CARES Act, the Company used the proceeds from the PPP Loan for payroll, healthcare benefits, rent and other qualifying expenses.

In March 2021, the Company received a loan of $474,000 from its lender under the PPP (“Second Draw Loan”). The Second Draw Loan has a five-year term and bears interest at a rate of 1% per annum. Principal and interest payments are deferred until August 2022, at which time the loan balance is payable in monthly installments unless the Company applies for, and receives, forgiveness in accordance with the CARES Act and the terms of the loan executed by the Company and its lender. The Second Draw Loan may be used to help fund payroll, healthcare benefits, rent, worker protection costs related to COVID-19, certain supplier costs and other qualifying expenses.

In June 2021, the Company applied for and received forgiveness of its First Draw Loan in whole from the SBA and its lender. The amount of forgiveness totaled $661,000, which consisted of unpaid principal and accrued interest. The Company recorded the forgiveness of debt as a gain in other income (expense), net on the accompanying condensed consolidated statements of operations. In August 2021, the Company applied for and received forgiveness of its Second Draw Loan in whole from the SBA and its lender. Refer to Note 10 – Subsequent Events for further discussion.

As of June 30, 2021, $476,000 of outstanding principal and accrued interest of the Second Loan Draw was classified as non-current on the accompanying condensed consolidated balance sheets based on the contractual payment schedule of the loan.

XML

Convertible Preferred Stock and Stockholders' Deficit

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Convertible Preferred Stock and Stockholders' Deficit

6. Convertible Preferred Stock and Stockholders’ Deficit

Non-Redeemable Convertible Preferred Stock

The Company’s Series B, Series G, Series I-1 and Series I-2 non-redeemable convertible preferred stock has been classified as equity on the accompanying condensed consolidated balance sheets.

During the three months ended June 30, 2021, holders of all remaining shares of the Company’s Series I-1 preferred stock converted 814 shares of issued and outstanding Series I-1 preferred stock into 465,300 shares of common stock of the Company. On June 25, 2021, the Company filed a Certificate of Elimination for the Series I-1 convertible preferred stock with the Secretary of State of the State of Delaware. The Certificate of Elimination amended the provisions of the Certificate of Incorporation of the Company to eliminate the powers, designations, preferences, privileges and other rights of the Series I-1 preferred stock.

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of June 30, 2021 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	449	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-2		4,310		4,310		4,310		—
Total		10,004,310		5,254,310	$	9,759	$	5

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of December 31, 2020 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	441	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-1		2,000		814		814		—
Series I-2		4,310		4,310		4,310		—
Total		10,006,310		5,255,124	$	10,565	$	5

Common Stock

As of June 30, 2021, the Company was authorized to issue 120,000,000 shares of common stock, $0.001 par value per share, and 20,000,000 shares of preferred stock, $0.001 par value per share. The Company has designated 50 shares of Series D redeemable convertible preferred stock and a total of 10,004,310 shares of Series B, Series G and Series I-2 non-redeemable convertible preferred stock.

Common Stock Warrants

In October 2014 and March 2016, the Company issued warrants exercisable for 62,047 and 11,159,995 shares of common stock, respectively, at an exercise price of $1.75 per share to certain placement agents and existing investors in connection with financing arrangements. In April 2020, the common stock warrants issued in October 2014 expired unexercised. The common stock warrants issued in March 2016 expired unexercised in March 2021. As of December 31, 2020, 3,948,569 common stock warrants issued in March 2016 were outstanding.

Equity Incentive Plans

The Company adopted the 2006 Equity Participation Plan (as amended the “2006 Plan”), which provides for the grant of stock options, restricted stock and other equity-based awards. Awards for up to 100,000 shares may be granted to employees, directors and consultants under this Plan. The options granted under the 2006 Plan may be either qualified or non-qualified options. Options may be granted with different vesting terms and expire no later than 10 years from the date of grant. The 2006 Plan expired on November 16, 2016. Options and other equity-based awards granted prior to the expiration of the 2006 Plan will continue in effect until the option or award is exercised or terminates pursuant to its terms. No new awards may be granted under the 2006 Plan following its expiration.

In April 2010, the Company adopted the 2010 Equity Participation Plan, as amended (the “2010 Plan”), which provides for the grant of stock options, restricted stock and other equity-based awards. Awards for up to 9,700,000 shares may be granted to employees, directors and consultants under the 2010 Plan. The options granted under the 2010 Plan may be either qualified or non-qualified options. Options may be granted with different vesting terms and expire no later than 10 years from the date of grant. In June 2020, the Company amended the 2010 Plan to extend the term of the 2010 Plan until March 2030. No other material provisions were amended.

Stock Options

Transactions involving stock options issued to employees, directors and consultants under the 2006 Plan and the 2010 Plan are summarized below. Options issued have a maximum life of 10 years. The following tables summarize the changes in options outstanding and the related exercise prices for the Company’s common stock options issued:

						Weighted-
						Average
						Remaining
	Number of			Weighted-		Contractual		Aggregate
	Outstanding			Average		Term		Intrinsic Value
	Options			Exercise		(in years)		(in thousands)
Outstanding at December 31, 2020		4,255,371		$	3.41
Granted		1,761,962		$	0.39
Forfeited or canceled		(287,471	)	$	2.13
Expired		(21,874	)	$	285.32
Outstanding at June 30, 2021		5,707,988		$	1.47		7.74	$	495
Vested and expected to vest at June 30, 2021		5,418,495		$	1.52		7.63	$	416
Exercisable at June 30, 2021		3,791,027		$	1.96		6.72	$	—

Stock-Based Compensation

The fair value of stock options granted is estimated at the date of grant using the Black-Scholes option valuation model. All options are amortized over the requisite service periods. The weighted-average assumptions used in the Black-Scholes option valuation model to determine the fair value of stock options granted for the three months and six ended June 30, 2021 and 2020 were as follows:

	Three and Six Months Ended June 30,
	2021		2020
Risk-free interest rate	0.89%		0.37%
Expected stock price volatility	83.85%		88.82%
Expected dividend yield	0%		0%
Expected life of options (in years)		5.67		5.36

Total stock-based compensation expense for the three and six months ended June 30, 2021 and 2020 was comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of sales	$	7	$	21	$	15	$	45
Research and development		8		30		31		79
Selling and marketing		5		20		22		42
General and administrative		152		253		338		576
Total	$	172	$	324	$	406	$	742

Unrecognized compensation expense related to stock options as of June 30, 2021 was $540,000, which is expected to be recognized over a weighted-average period of 1.9 years.

Common Stock Reserved for Future Issuance

As of June 30, 2021, the Company had shares of common stock reserved for future issuance as follows:

Options outstanding	5,707,988
Common stock available for issuance under the 2010 Plan	3,827,272
Redeemable convertible preferred stock	2,457,143
Non-redeemable convertible preferred stock	3,209,835
Total	15,202,238

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

7. Related Party Transactions

In 2011, the Company executed an operating lease for its corporate offices with S Real Estate Holdings LLC. S Real Estate Holdings LLC is owned by Dr. Russell Kern, the Company’s Executive Vice President and Chief Scientific Officer and a director and was previously owned by Dr. Andrey Semechkin, the Company’s Chief Executive Officer and Co-Chairman of the Board of Directors. The lease agreement was negotiated at arm’s length and was reviewed by the Company’s outside legal counsel. The terms of the lease were reviewed by a committee of independent directors, and the Company believes that, in total, those terms are at least as favorable to the Company as could be obtained for comparable facilities from an unaffiliated party. In March 2017, the Company signed an amendment to the lease agreement to extend the term of the lease until 2020 and include annual adjustments to the monthly lease payments. In March 2020, the Company entered into an amendment to the lease agreement. The amendment extended the term of the lease for three years (until February 2023) and provided for a 2% increase in monthly rent. For the six months ended June 30, 2021 and 2020, the Company recorded $86,000 and $84,000, respectively, in rent expense that was related to the facility lease arrangement with related parties.

Between March 6, 2018 and December 17, 2019, to obtain funding for working capital purposes, the Company borrowed a total of $2.3 million from Dr. Semechkin and issued an unsecured, non-convertible promissory note in the principal amount of $2.3 million (the “Note”) to Dr. Semechkin. The outstanding principal amount under the Note accrued interest at a rate of 4.5% per annum. The outstanding principal and accrued interest on the Note was due and payable on January 15, 2021 and could be pre-paid without penalty at any time.

On January 15, 2021, the Company and Dr. Semechkin modified the Note to extend the maturity date of the Note to January 15, 2022. No other terms of the Note were modified as a result of the extension.

On March 5, 2021, to obtain additional funding for working capital purposes, the Company further modified the Note and issued an unsecured, non-convertible promissory note (the “New Note”) in the amount of $2.650 million to Dr. Semechkin. In exchange, Dr. Semechkin surrendered the Note and provided additional funding in the amount of $350,000 to the Company. The outstanding principal amount under the New Note accrues interest at a rate of 4.5% per annum. The outstanding principal and accrued interest on the New Note is due and payable on January 15, 2022 and may be pre-paid by the Company without penalty at any time.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Leases

The Company has three operating leases for real estate in California and Maryland:

• Carlsbad, California – corporate offices with a term date of February 2023 and leased from a related party (see also Note 7 –Related Party Transactions);

• Oceanside, California – primary research facility and laboratory space with a term date of December 2021;

• Frederick, Maryland – mixed laboratory and administrative space with a term date of November 2025.

The Company’s operating leases for real estate are subject to additional variable charges for common area maintenance and other variable costs, and do not include an option to extend the lease term. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of future minimum lease payments over the lease term. As of June 30, 2021, total right-of-use assets and operating lease liabilities were approximately $733,000 and $1.0 million, respectively. All operating lease expense is recognized on a straight-line basis over the lease term. For the three months ended June 30, 2021 and 2020 lease expense totaled $118,000 and $119,000, respectively. For the six months ended June 30, 2021 and 2020 lease expense totaled $236,000 and $237,000, respectively. As of June 30, 2021, the Company had no finance leases.

Maturities of lease liabilities are as follows (in thousands):

Years ending December 31,
2021 (remaining six months)	$	257
2022		394
2023		255
2024		233
2025		240
Thereafter		—
Total minimum lease payments		1,379
Less: imputed interest		(356	)
Total future minimum lease payments		1,023
Less: operating lease liabilities, current		(309	)
Operating lease liabilities, net of current portion	$	714

Licensed Patents

The Company has a minimum annual license fee of $75,000 payable in two installments per year to Astellas Pharma pursuant to the amended UMass IP license agreement. The license agreement with Astellas Pharma may be terminated by the Company at any time with a 30-day notice.

XML

Segments

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segments

9. Segments

The Company operates the business on the basis of three reporting segments, the parent company and two business units: ISCO – therapeutic market; LCT – biomedical market; LSC – anti-aging market.

The Company does not measure the performance of its segments on any asset-based metrics. Therefore, segment information is presented only for operating income (loss). Revenues, expenses and operating income (loss) for the three and six months ended June 30, 2021 and 2020 by market segment were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Biomedical market	$	1,493		$	1,395		$	2,920		$	3,366
Anti-aging market		340			417			571			805
Total revenues		1,833			1,812			3,491			4,171
Operating expenses:
Therapeutic market		745			952			1,558			1,784
Biomedical market		1,078			1,281			2,161			2,722
Anti-aging market		416			411			745			953
Total operating expenses		2,239			2,644			4,464			5,459
Operating income (loss)
Therapeutic market		(745	)		(952	)		(1,558	)		(1,784	)
Biomedical market		415			114			759			644
Anti-aging market		(76	)		6			(174	)		(148	)
Total operating loss	$	(406	)	$	(832	)	$	(973	)	$	(1,288	)

XML

Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

In August 2021, the Company applied for and received forgiveness of its Second Draw Loan. The amount of forgiveness totaled $476,000, which consisted of unpaid principal and accrued interest. The Company will record the forgiveness of debt as a gain in other income (expense), net on its condensed consolidated statements of operations for the three and nine months ending September 30, 2021.

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business

Description of Business

International Stem Cell Corporation (the “Company”) was organized in Delaware in June 2005 and is publicly traded on the OTCQX under the symbol “ISCO”. The Company is primarily a research and development company, for the therapeutic market, which has focused on advancing potential clinical applications of human parthenogenetic stem cells (“hpSCs”) for the treatment of various diseases of the central nervous system and liver diseases. The Company has the following wholly-owned subsidiaries:

• Lifeline Cell Technology, LLC (“LCT”) – for the biomedical market, develops, manufactures and commercializes primary human cell research products including over 200 human cell culture products, including frozen human “primary” cells and the reagents (called “media”) needed to grow, maintain and differentiate the cells;

• Lifeline Skin Care, Inc. (“LSC”) – for the anti-aging market, develops, manufactures and markets a category of anti-aging skin care products based on the Company’s proprietary parthenogenetic stem cell technology and small molecule technology;

• Cyto Therapeutics Pty. Ltd. (“Cyto Therapeutics”) – performs research and development (“R&D”) for the therapeutic market and is currently conducting clinical trials in Australia for the use of ISC-hpNSC® in the treatment of Parkinson’s disease.

COVID-19 Pandemic

COVID-19 Pandemic

The COVID-19 pandemic has caused business disruptions in the Company’s business globally. The Company’s condensed consolidated financial statements reflect judgments and estimates that could change in the future as a result of the COVID-19 pandemic. For the six months ended June 30, 2021, the Company experienced a year-over-year decline in product sales. In response, the Company has reduced its capital spending and, where possible, operating expenses while facilitating ongoing safe and reliable operations. As of the date of this report, the Company expects the COVID-19 pandemic will continue to adversely impact its business, financial condition, liquidity, and future results of operations. The full extent to which the COVID-19 pandemic will impact the Company remains uncertain and ultimately will be dictated by the length and severity of the pandemic, as well as the economic recovery and federal, state and local government actions taken in response. The Company is continuing to monitor the impact of COVID-19 on the Company’s operations, workforce, suppliers, customers and industry.

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows for the periods presented. The operating results presented in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s annual report on Form 10-K filed with the SEC on March 30, 2021.

Liquidity and Going Concern

Liquidity and Going Concern

The Company had an accumulated deficit of approximately $109.5 million as of June 30, 2021 and has, on an annual basis, incurred net losses and negative operating cash flows since inception. The Company has had no revenue from its principal operations in therapeutic and clinical product development through research and development efforts. Unless the Company obtains additional financing, the Company does not have sufficient cash on hand to sustain operations at least through one year after the issuance date of these condensed consolidated financial statements.

There can be no assurance that the Company will be successful in maintaining normal operating cash flow or obtaining additional funding. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional financing. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

The Company continues to evaluate various financing sources and options to raise working capital to help fund current research and development programs and operations. The Company will need to obtain significant additional funding from sources, including through debt and/or equity financing, license arrangements, grants and/or collaborative research arrangements to sustain its operations and develop products.

The timing and degree of any future capital requirements will depend on many factors, including:

• the accuracy of the assumptions underlying the estimates for capital needs in 2021 and beyond;

• the extent that revenues from sales of LSC and LCT products cover the related costs and provide capital;

• scientific progress in research and development programs;

• the magnitude and scope of the Company’s research and development programs and its ability to establish, enforce and maintain strategic arrangements for research, development, clinical testing, manufacturing and marketing;

• the progress with preclinical development and clinical trials;

• the time and costs involved in obtaining regulatory approvals;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims;

• the number and type of product candidates that the Company decides to pursue;

• demand from the Company’s largest original equipment manufacturer customers; and

• the development of major public health concerns, including COVID-19 or other pandemics arising globally, and the current and future impact that such concerns may have on the Company’s operations and funding requirements.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including inconsistent liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. As the pandemic continues and restrictions remain in place or new restrictions are imposed, it may make any additional debt and/or equity financing more difficult, more costly and more dilutive.

In addition, debt financing may be expensive and require the Company to pledge all or a substantial portion of its assets. If additional funds are obtained through arrangements with collaborative partners, these arrangements may require the Company to relinquish rights to some of its technologies, product candidates or products that the Company would otherwise seek to develop and commercialize on its own. Furthermore, if sufficient capital is not available, the Company may be required to delay, reduce the scope of or eliminate one or more of its product initiatives. The Company’s failure to raise capital or enter into applicable arrangements when needed would have a negative impact on its financial condition.

Principles of Consolidation and Foreign Currency Transactions

Principles of Consolidation and Foreign Currency Transactions

The condensed consolidated financial statements include the accounts of International Stem Cell Corporation and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The functional currency of the Company and its subsidiaries, including its wholly-owned Australian subsidiary, Cyto Therapeutics, is the U.S. dollar. Assets and liabilities that are not denominated in the functional currency are remeasured into U.S. dollars at foreign currency exchange rates in effect at the respective balance sheet dates. Revenue and expenses are translated at the average rate in effect on the date of the transaction. Net realized and unrealized gains and losses from foreign currency transactions and remeasurement are reported in general and administrative expense in the accompanying condensed consolidated statements of operations and were not material for the periods presented.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements. Significant estimates include patent life (remaining legal life versus remaining useful life), inventory carrying values, allowance for excess and obsolete inventories, allowance for sales returns and doubtful accounts, and the fair value of stock option grants using the Black-Scholes option valuation model. Actual results could differ from those estimates.

Segments

Segments

The Company’s chief operating decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information by each reportable company’s statement of operations. The Company operates the business on the basis of three reporting segments, the parent company and two business units: ISCO – therapeutic market; LCT – biomedical market, and; LSC – anti-aging market.

Inventory

Inventory

Inventory is accounted for using the average cost and first-in, first-out (“FIFO”) methods for LCT cell culture media and reagents, average cost and specific identification methods for LSC products, and specific identification method for other LCT products. Inventory balances are stated at the lower of cost or net realizable value. Laboratory supplies used in the research and development process are expensed as consumed. LCT’s inventory has a long product life cycle, does not have a shelf life when frozen, and future demand is uncertain. As such, at each reporting period, the Company estimates its reserve for allowance and obsolescence using historical sales data and inventory turnover rates. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. If the Company is able to sell such inventory, any related reserves would be reduced in the period of sale. The value of the inventory that is not expected to be sold within twelve months of the current reporting period is classified as non-current inventory on the accompanying condensed consolidated balance sheets.

Accounts Receivable

Accounts Receivable

Trade accounts receivable are recorded at the net invoice value and are not interest bearing. Accounts receivable primarily consist of trade accounts receivable from the sales of LCT’s products, timing of cash receipts by the Company related to LSC credit card sales to customers, as well as LSC trade receivable amounts related to spa and distributor sales. The Company considers receivables past due based on the contractual payment terms. The Company reviews its exposure to accounts receivable and reserves specific amounts if collectability is no longer reasonably assured. The Company recorded an allowance for doubtful accounts of $3,000 and $12,000 as of June 30, 2021 and December 31, 2020, respectively.

Advances

Advances

On June 18, 2008, the Company entered into an agreement with BioTime, Inc. (“BioTime”), whereby BioTime paid an advance of $250,000 to LCT to produce, make, and distribute certain products. The $250,000 advance will be paid down with the first $250,000 of net revenues that otherwise would be allocated to LCT under the agreement. As of June 30, 2021, no revenues were realized and attributable to BioTime under this agreement.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years. Costs related to leasehold improvements are capitalized and amortized over the shorter of the remaining term of the lease or the estimated life of the asset.

Intangible Assets

Intangible Assets

Intangible assets consist of acquired patent licenses and capitalized legal fees related to the acquisition, filing, maintenance, and defense of patents and trademarks. Amortization begins once the patent is issued by the appropriate authoritative bodies. In the period in which a patent application is rejected or efforts to pursue the patent are abandoned, all the related accumulated costs are expensed. Patents and other intangible assets are amortized on a straight-line basis over the shorter of the useful life of the underlying patent, which is generally 15 years, or when the intangible asset is rejected or abandoned. All amortization expense related to intangible assets is included in general and administrative expense in the accompanying condensed consolidated statements of operations.

Long-Lived Asset Impairment

Long-Lived Asset Impairment

The Company reviews long-lived assets for impairment when events or changes in circumstances (“triggering event”) indicate that the carrying value of an asset or group of assets may not be recovered. If a triggering event is determined to have occurred, the carrying value of an asset or group of assets is compared to the future undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying value exceeds the undiscounted cash flows of the asset or group of assets, then impairment exists. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Revenue Recognition

Revenue Recognition

Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following five-step process:

1. Identify the contract with the customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when (or as) each performance obligation is satisfied

The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following table presents the Company's revenue disaggregated by segment, product and geography (in thousands):

Biomedical market:

	Three Months Ended June 30, 2021									Six Months Ended June 30, 2021
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	186	$	171	$	357		24	%	$	351	$	329	$	680		23	%
Media		939		197		1,136		76	%		1,912		328		2,240		77	%
Total	$	1,125	$	368	$	1,493		100	%	$	2,263	$	657	$	2,920		100	%

	Three Months Ended June 30, 2020									Six Months Ended June 30, 2020
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	213	$	87	$	300		22	%	$	475	$	204	$	679		20	%
Media		994		85		1,079		77	%		2,461		210		2,671		79	%
Other		16		—		16		1	%		16		—		16		1	%
Total	$	1,223	$	172	$	1,395		100	%	$	2,952	$	414	$	3,366		100	%

Anti-aging market:

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Total		% of Total			Total		% of Total			Total		% of Total			Total		% of Total
	Revenues		Revenues			Revenues		Revenues			Revenues		Revenues			Revenues		Revenues
Skin care sales channels
Ecommerce	$	245		72	%	$	299		72	%	$	411		72	%	$	522		65	%
Professional		95		28	%		118		28	%		160		28	%		283		35	%
Total	$	340		100	%	$	417		100	%	$	571		100	%	$	805		100	%

The Company's revenue consists primarily of sales of products from its two revenue-generating operating segments, the biomedical market and anti-aging market business segments. The biomedical market segment markets and sells primary human cell research products with two product categories, cells and media, which are sold both domestically within the United States and internationally. The anti-aging market segment markets and sells a line of skincare products sold through two sales channels: ecommerce and professional. The ecommerce channel sells direct to customers through online orders, while professional sales are primarily to spas, salons and other skincare providers.

Contract terms for unit price, quantity, shipping and payment are governed by sales agreements, invoices or online order forms which the Company considers to be a customer's contract in all cases. The unit price is considered the observable stand-alone selling price for the performance obligation(s) within the arrangements. Any promotional or volume sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price.

The Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Product sales generally consist of a single performance obligation that the Company satisfies at a point in time (i.e., upon delivery of the product).

For LSC products, ecommerce sales are primarily paid through credit card charges, while professional sales are invoiced. The professional sales and biomedical products' standard payment terms for its customers are generally 30 days after the Company satisfies the performance obligation(s).

The Company elects to account for shipping and handling costs as activities to fulfill the promise to transfer the goods to a customer. As a result, no consideration is allocated to shipping and handling costs. Rather, the Company accrues the cost of shipping and handling upon shipment of the product, and all contract revenue (i.e., the transaction price) is recognized at the same time.

Variable Consideration

The Company records revenue from customers in an amount that reflects the consideration it expects to be entitled to after transferring control of those goods or services to a customer. From time to time, the Company offers sales promotions on its products such as discounts and free product offers. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur and is updated at the end of each reporting period as additional information becomes available.

Contract Balances

The Company records a receivable when it has an unconditional right to receive consideration after a performance obligation is satisfied. As of June 30, 2021 and December 31, 2020, accounts receivable, net, totaled $547,000 and $403,000, respectively. During the six months ended June 30, 2021 and 2020, the Company did not incur material write-offs of its accounts receivable.

Practical Expedients

The Company has elected the practical expedient to not determine whether contacts with customers contain significant financing components. The Company pays commissions on certain sales for its biomedical and anti-aging product markets once the customer payment has been received, which are accrued at the time of the sale. The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. In addition, the Company has elected to exclude sales taxes consideration from the determined transaction price.

Allowance for Sales Returns

Allowance for Sales Returns

The Company’s anti-aging products have a 30-day product return guarantee; however, the Company determined that there is a low probability that returns will occur based on its historical rate of returns. Historically, returns have not been significant and are recognized as a reduction to current period revenue. As of June 30, 2021 and December 31, 2020, the Company recorded no allowance for sales returns.

Cost of Sales

Cost of Sales

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead. Certain of the Company’s licensed technology agreements may require the Company to pay royalties based on the future sale of the Company’s products. Such royalties will be recorded as a component of cost of sales when incurred. Additionally, milestone payments or the amortization of license fees related to developed technologies used in the Company’s products will be included as a component of cost of sales to the extent that such payments become due in the future.

Research and Development Costs

Research and Development Costs

Research and development costs, which are expensed as incurred, primarily consist of salaries and benefits associated with research and development personnel, overhead and occupancy costs, contract services costs and amortization of license costs for technology used in research and development with alternative future uses, offset by the research and development tax credit provided by the Australian Taxation Office for qualified expenditures.

Stock-Based Compensation

Stock-Based Compensation

The cost of a stock-based award is measured at the grant date based on the estimated fair value of the award, and is recognized as expense on a straight-line basis, net of forfeitures which are recognized as incurred, over the requisite service period of the award. The fair value of stock options is estimated using the Black-Scholes option valuation model, which requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. The fair value of restricted stock awards is based on the market value of the Company’s common stock on the date of grant.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company believes that the carrying value of its cash, accounts receivables, accounts payable, accrued liabilities, Paycheck Protection Program loan and related party note payable as of June 30, 2021 and December 31, 2020 approximate their fair values because of the short-term nature of those instruments.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1:  Observable inputs such as quoted prices in active markets.

Level 2:  Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of June 30, 2021, the Company had no financial assets or liabilities measured at fair value on a recurring basis. As of December 31, 2020, the Company had outstanding a warrant liability which was measured at fair value on a recurring basis. The fair value of the warrant liability was calculated using the Monte-Carlo simulation model, which required the use of certain estimates. As of December 31, 2020, the fair value of the warrant liability was estimated to be zero.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with applicable authoritative guidance, which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock and if-converted methods. Potentially dilutive common stock equivalents are comprised of stock options, common stock warrants and convertible preferred stock. For the three and six months ended June 30, 2021 and 2020, there was no difference in the number of shares used to calculate basic and diluted shares outstanding.

For the three and six months ended June 30, 2021 and 2020, the following common stock options, common stock warrants and convertible preferred stock were not included in the diluted net income (loss) per share calculation because the effect would be anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options outstanding		4,545,211		4,620,033		4,386,367		4,739,281
Common stock warrants outstanding		—		3,948,951		—		3,950,002
Redeemable convertible preferred stock		2,457,143		2,457,143		2,457,143		2,457,143
Non-redeemable convertible preferred stock		3,452,533		3,675,135		3,563,219		3,675,135
Total		10,454,887		14,701,262		10,406,729		14,821,561

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in stockholders’ equity except those resulting from investments by owners and distributions to owners. The Company did not have any items of comprehensive income (loss) other than net income (loss) from operations for the three and six months ended June 30, 2021 and 2020.

Customer Concentrations

Customer Concentrations

During the six months ended June 30, 2021, two customers accounted for approximately 35% and 10%, respectively, of consolidated revenues. During the six months ended June 30, 2020, one customer accounted for approximately 47% of consolidated revenues. As of June 30, 2021 and December 31, 2020, the two customers accounted for approximately 42% and 62%, respectively, of accounts receivable, net. No other single customer accounted for more than 10% of revenues for the periods then ended for any segment.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU introduced a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to maturity debt securities, trade receivables and other receivables measured at amortized cost at the time the financial asset is originated or acquired. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional ASUs to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. In November 2019, the FASB issued an amendment making this ASU effective for fiscal years beginning after December 15, 2022 for smaller reporting companies. The new standard will be effective for the Company on January 1, 2023 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded features that could be recognized separately from the host contract. Consequently, more convertible debt instruments will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 also requires use of the if-converted method in the diluted earnings per share calculation for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years for smaller reporting companies, with early adoption permitted. The new standard will be effective for the Company on January 1, 2024 or at such earlier time where it is no longer a smaller reporting company. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves the consistent application, and the simplification, of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or related disclosures.

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Summary of Revenue Disaggregated by Segment, Product and Geography

The following table presents the Company's revenue disaggregated by segment, product and geography (in thousands):

Biomedical market:

	Three Months Ended June 30, 2021									Six Months Ended June 30, 2021
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	186	$	171	$	357		24	%	$	351	$	329	$	680		23	%
Media		939		197		1,136		76	%		1,912		328		2,240		77	%
Total	$	1,125	$	368	$	1,493		100	%	$	2,263	$	657	$	2,920		100	%

	Three Months Ended June 30, 2020									Six Months Ended June 30, 2020
					Total		% of Total							Total		% of Total
	Domestic		International		Revenues		Revenues			Domestic		International		Revenues		Revenues
Biomedical products
Cells	$	213	$	87	$	300		22	%	$	475	$	204	$	679		20	%
Media		994		85		1,079		77	%		2,461		210		2,671		79	%
Other		16		—		16		1	%		16		—		16		1	%
Total	$	1,223	$	172	$	1,395		100	%	$	2,952	$	414	$	3,366		100	%

Anti-aging market:

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Total		% of Total			Total		% of Total			Total		% of Total			Total		% of Total
	Revenues		Revenues			Revenues		Revenues			Revenues		Revenues			Revenues		Revenues
Skin care sales channels
Ecommerce	$	245		72	%	$	299		72	%	$	411		72	%	$	522		65	%
Professional		95		28	%		118		28	%		160		28	%		283		35	%
Total	$	340		100	%	$	417		100	%	$	571		100	%	$	805		100	%

Summary of Antidilutive Securities not Included in Diluted Net Income (Loss) Per Share Calculation

For the three and six months ended June 30, 2021 and 2020, the following common stock options, common stock warrants and convertible preferred stock were not included in the diluted net income (loss) per share calculation because the effect would be anti-dilutive.

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options outstanding		4,545,211		4,620,033		4,386,367		4,739,281
Common stock warrants outstanding		—		3,948,951		—		3,950,002
Redeemable convertible preferred stock		2,457,143		2,457,143		2,457,143		2,457,143
Non-redeemable convertible preferred stock		3,452,533		3,675,135		3,563,219		3,675,135
Total		10,454,887		14,701,262		10,406,729		14,821,561

XML

Inventory (Tables)

6 Months Ended

Jun. 30, 2021

Inventory Disclosure [Abstract]

Summary of the Components of Inventory

The components of inventory are as follows (in thousands):

	June 30,			December 31,
	2021			2020
Raw materials	$	595		$	427
Work in process		411			481
Finished goods		994			991
		2,000			1,899
Less: allowance for inventory excess and obsolescence		(564	)		(611	)
Total current and non-current inventory, net	$	1,436		$	1,288
Inventory, net	$	1,073		$	917
Non-current inventory		363			371
Total current and non-current inventory, net	$	1,436		$	1,288

XML

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consist of the following (in thousands):

	June 30,			December 31,
	2021			2020
Machinery and equipment	$	1,661		$	1,661
Computer equipment and software		243			241
Office equipment		230			230
Leasehold improvements		1,303			1,303
Construction in progress		1			3
		3,438			3,438
Less: accumulated depreciation and amortization		(2,987	)		(2,904	)
Property and equipment, net	$	451		$	534

XML

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible Assets consists of the following (in thousands):

	June 30,			December 31,
	2021			2020
Patents	$	2,299		$	2,286
Less: accumulated amortization		(1,146	)		(1,099	)
		1,153			1,187
Indefinite life logos and trademarks		75			75
Intangible assets, net	$	1,228		$	1,262

XML

Convertible Preferred Stock and Stockholders' Deficit (Tables)

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Schedule of Authorized, Issued and Outstanding Shares of Non-redeemable Convertible Preferred Stock

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of June 30, 2021 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	449	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-2		4,310		4,310		4,310		—
Total		10,004,310		5,254,310	$	9,759	$	5

The authorized, issued and outstanding shares of non-redeemable convertible preferred stock as of December 31, 2020 consist of the following:

	Shares		Shares Issued		Liquidation		Carrying
	Authorized		and Outstanding		Preference		Value
					(in thousands)
Series B		5,000,000		250,000	$	441	$	—
Series G		5,000,000		5,000,000		5,000		5
Series I-1		2,000		814		814		—
Series I-2		4,310		4,310		4,310		—
Total		10,006,310		5,255,124	$	10,565	$	5

Summary of Changes in Options Outstanding and Related Exercise Prices for Company's Common Stock Options Issued

The following tables summarize the changes in options outstanding and the related exercise prices for the Company’s common stock options issued:

						Weighted-
						Average
						Remaining
	Number of			Weighted-		Contractual		Aggregate
	Outstanding			Average		Term		Intrinsic Value
	Options			Exercise		(in years)		(in thousands)
Outstanding at December 31, 2020		4,255,371		$	3.41
Granted		1,761,962		$	0.39
Forfeited or canceled		(287,471	)	$	2.13
Expired		(21,874	)	$	285.32
Outstanding at June 30, 2021		5,707,988		$	1.47		7.74	$	495
Vested and expected to vest at June 30, 2021		5,418,495		$	1.52		7.63	$	416
Exercisable at June 30, 2021		3,791,027		$	1.96		6.72	$	—

Fair Value of Stock Options Grants, Weighted Average Assumptions

The weighted-average assumptions used in the Black-Scholes option valuation model to determine the fair value of stock options granted for the three months and six ended

	Three and Six Months Ended June 30,
	2021		2020
Risk-free interest rate	0.89%		0.37%
Expected stock price volatility	83.85%		88.82%
Expected dividend yield	0%		0%
Expected life of options (in years)		5.67		5.36

Schedule of Total Stock-Based Compensation Expense

Total stock-based compensation expense for the three and six months ended June 30, 2021 and 2020 was comprised of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Cost of sales	$	7	$	21	$	15	$	45
Research and development		8		30		31		79
Selling and marketing		5		20		22		42
General and administrative		152		253		338		576
Total	$	172	$	324	$	406	$	742

Summary of Shares of Common Stock Reserved for Future Issuance

As of June 30, 2021, the Company had shares of common stock reserved for future issuance as follows:

Options outstanding	5,707,988
Common stock available for issuance under the 2010 Plan	3,827,272
Redeemable convertible preferred stock	2,457,143
Non-redeemable convertible preferred stock	3,209,835
Total	15,202,238

XML

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities are as follows (in thousands):

Years ending December 31,
2021 (remaining six months)	$	257
2022		394
2023		255
2024		233
2025		240
Thereafter		—
Total minimum lease payments		1,379
Less: imputed interest		(356	)
Total future minimum lease payments		1,023
Less: operating lease liabilities, current		(309	)
Operating lease liabilities, net of current portion	$	714

XML

Segments (Tables)

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Revenues, Expenses and Operating Income (Loss) by Market Segment

Revenues, expenses and operating income (loss) for the three and six months ended June 30, 2021 and 2020 by market segment were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Biomedical market	$	1,493		$	1,395		$	2,920		$	3,366
Anti-aging market		340			417			571			805
Total revenues		1,833			1,812			3,491			4,171
Operating expenses:
Therapeutic market		745			952			1,558			1,784
Biomedical market		1,078			1,281			2,161			2,722
Anti-aging market		416			411			745			953
Total operating expenses		2,239			2,644			4,464			5,459
Operating income (loss)
Therapeutic market		(745	)		(952	)		(1,558	)		(1,784	)
Biomedical market		415			114			759			644
Anti-aging market		(76	)		6			(174	)		(148	)
Total operating loss	$	(406	)	$	(832	)	$	(973	)	$	(1,288	)

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail)	6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($) Segment Units ProductCategory SalesChannel Customer	Jun. 30, 2020 USD ($) Customer	Dec. 31, 2020 USD ($) Customer	Jun. 18, 2008 USD ($)
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Accumulated deficit	$ 109,498,000		$ 109,115,000
Number of reporting segments | Segment	3
Number of business units | Units	2
Allowance for doubtful accounts receivable	$ 3,000		12,000
Advances	250,000		250,000	$ 250,000
Specified amount of revenue to be utilized for advances				$ 250,000
Revenue realized from agreement	$ 0
Intangible assets useful life	15 years
Number of revenue-generating operating segments | Segment	2
Number of product categories | ProductCategory	2
Number of sales channels | SalesChannel	2
Description of payment terms	The Company's revenue consists primarily of sales of products from its two revenue-generating operating segments, the biomedical market and anti-aging market business segments. The biomedical market segment markets and sells primary human cell research products with two product categories, cells and media, which are sold both domestically within the United States and internationally. The anti-aging market segment markets and sells a line of skincare products sold through two sales channels: ecommerce and professional. The ecommerce channel sells direct to customers through online orders, while professional sales are primarily to spas, salons and other skincare providers.
Accounts receivable, net	$ 547,000		403,000
Write-off of accounts receivable	$ 0	$ 0
Product return guarantee period	30 days
Allowance for sales returns	$ 0		0
Financial assets	0
Financial liabilities	$ 0
Fair value of warrant liability			$ 0
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2021
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false]	true
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201912Member
Customer Concentration Risk [Member] | Accounts Receivable, Net [Member]
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of customers more than ten percentage of revenue | Customer	2		2
Concentration risk percentage	42.00%		62.00%
Biomedical Market [Member] | Customer Concentration Risk [Member] | Revenue, Segment Benchmark
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of customers more than ten percentage of revenue | Customer	2
Biomedical Market [Member] | Customer Concentration Risk [Member] | Major customer 1 [Member] | Revenue, Segment Benchmark
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Number of customers more than ten percentage of revenue | Customer		1
Concentration risk percentage	35.00%	47.00%
Biomedical Market [Member] | Customer Concentration Risk [Member] | Major customer 2 [Member] | Revenue, Segment Benchmark
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage	10.00%
Minimum [Member]
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Estimated useful life of property and equipment	3 years
Maximum [Member]
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Estimated useful life of property and equipment	5 years
Sales commissions amortization period	1 year
Prepaid Expenses and Other Current Assets [Member]
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Research and development tax credit receivable	$ 113,000
Australian Taxation Office [Member]
Description Of Business Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of refundable tax credit on qualified research and development	43.50%

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Revenue Disaggregated by Segment, Product and Geography (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 1,833	$ 1,812	$ 3,491	$ 4,171
Biomedical Market [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 1,493	$ 1,395	$ 2,920	$ 3,366
% of Total Revenues	100.00%	100.00%	100.00%	100.00%
Biomedical Market [Member] | U.S. [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 1,125	$ 1,223	$ 2,263	$ 2,952
Biomedical Market [Member] | International [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	368	172	657	414
Biomedical Market [Member] | Cells [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 357	$ 300	$ 680	$ 679
% of Total Revenues	24.00%	22.00%	23.00%	20.00%
Biomedical Market [Member] | Cells [Member] | U.S. [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 186	$ 213	$ 351	$ 475
Biomedical Market [Member] | Cells [Member] | International [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	171	87	329	204
Biomedical Market [Member] | Media [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 1,136	$ 1,079	$ 2,240	$ 2,671
% of Total Revenues	76.00%	77.00%	77.00%	79.00%
Biomedical Market [Member] | Media [Member] | U.S. [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 939	$ 994	$ 1,912	$ 2,461
Biomedical Market [Member] | Media [Member] | International [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	197	85	328	210
Biomedical Market [Member] | Other [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues		$ 16		$ 16
% of Total Revenues		1.00%		1.00%
Biomedical Market [Member] | Other [Member] | U.S. [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues		$ 16		$ 16
Anti-Aging Skincare Market [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 340	$ 417	$ 571	$ 805
% of Total Revenues	100.00%	100.00%	100.00%	100.00%
Anti-Aging Skincare Market [Member] | Ecommerce [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 245	$ 299	$ 411	$ 522
% of Total Revenues	72.00%	72.00%	72.00%	65.00%
Anti-Aging Skincare Market [Member] | Professional [Member]
Disaggregation Of Revenue [Line Items]
Total Revenues	$ 95	$ 118	$ 160	$ 283
% of Total Revenues	28.00%	28.00%	28.00%	35.00%

XML

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Antidilutive Securities not Included in Diluted Net Income (Loss) Per Share Calculation (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	10,454,887	14,701,262	10,406,729	14,821,561
Options [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	4,545,211	4,620,033	4,386,367	4,739,281
Common Stock Warrants [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share		3,948,951		3,950,002
Redeemable Convertible Preferred Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	2,457,143	2,457,143	2,457,143	2,457,143
Nonredeemable Convertible Preferred Stock [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	3,452,533	3,675,135	3,563,219	3,675,135

XML

Inventory - Summary of the Components of Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 595	$ 427
Work in process	411	481
Finished goods	994	991
Total current and non-current inventory, gross	2,000	1,899
Less: allowance for inventory excess and obsolescence	(564)	(611)
Total current and non-current inventory, net	1,436	1,288
Inventory, net	1,073	917
Non-current inventory	$ 363	$ 371

XML

Inventory - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021 USD ($)
Inventory Disclosure [Abstract]
Disposed of obsolete inventory	$ 45,000

XML

Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 3,438	$ 3,438
Less: accumulated depreciation and amortization	(2,987)	(2,904)
Property and equipment, net	451	534
Machinery and Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,661	1,661
Computer Equipment and Software [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	243	241
Office Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	230	230
Leasehold Improvements [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,303	1,303
Construction in Progress [Member]
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 1	$ 3

XML

Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Property Plant And Equipment [Abstract]
Depreciation and amortization expense	$ 41	$ 43	$ 83	$ 83

XML

Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Patents	$ 2,299	$ 2,286
Less: accumulated amortization	(1,146)	(1,099)
Total	1,153	1,187
Indefinite life logos and trademarks	75	75
Intangible assets, net	$ 1,228	$ 1,262

XML

Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense	$ 23,000	$ 23,000	$ 47,000	$ 45,000

XML

Paycheck Protection Program Loan - Additional Information (Detail) - USD ($)	1 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	May 31, 2020	Dec. 31, 2020
Paycheck Protection Program Loan Disclosure [Line Items]
Proceeds from Paycheck Protection Program loan as government aid		$ 474,000	$ 654,000
Paycheck Protection Program loan maturity period		5 years	2 years
Paycheck Protection Program loan interest rate		1.00%	1.00%
Paycheck Protection Program loan deferred payment period			10 months
Paycheck Protection Program loan forgiveness period			168 days
Paycheck Protection Program loan, non-current	$ 476,000			$ 517,000
First Draw Loan [Member]
Paycheck Protection Program Loan Disclosure [Line Items]
Amount of forgiveness	661,000
Second Draw Loan [Member]
Paycheck Protection Program Loan Disclosure [Line Items]
Paycheck Protection Program loan, non-current	$ 476,000

XML

Convertible Preferred Stock and Stockholders' Deficit - Non-Redeemable Convertible Preferred Stock - Additional Information (Detail) - Series I-1 [Member] - shares	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Non-redeemable convertible preferred stock, shares issued	814	814
Non-redeemable convertible preferred stock, shares outstanding	814	814
Common Stock [Member]
Class Of Stock [Line Items]
Conversion of common stock	465,300

XML

Convertible Preferred Stock and Stockholders' Deficit - Schedule of Authorized, Issued and Outstanding Shares of Non-redeemable Convertible Preferred Stock (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Shares Authorized	20,000,000
Series B [Member]
Class Of Stock [Line Items]
Shares Authorized	5,000,000	5,000,000
Shares Outstanding	250,000	250,000
Shares Issued	250,000	250,000
Liquidation Preference	$ 449	$ 441
Series G [Member]
Class Of Stock [Line Items]
Shares Authorized	5,000,000	5,000,000
Shares Outstanding	5,000,000	5,000,000
Shares Issued	5,000,000	5,000,000
Liquidation Preference	$ 5,000	$ 5,000
Carrying Value	$ 5	$ 5
Series I-2 [Member]
Class Of Stock [Line Items]
Shares Authorized	4,310	4,310
Shares Outstanding	4,310	4,310
Shares Issued	4,310	4,310
Liquidation Preference	$ 4,310	$ 4,310
Series B, Series G and Series I-2 Non-redeemable Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Shares Authorized	10,004,310
Shares Outstanding	5,254,310
Shares Issued	5,254,310
Liquidation Preference	$ 9,759
Carrying Value	$ 5
Series I-1 [Member]
Class Of Stock [Line Items]
Shares Authorized		2,000
Shares Outstanding	814	814
Shares Issued	814	814
Liquidation Preference		$ 814
Series B, Series G, Series I-1 and Series I-2 Non-redeemable Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Shares Authorized		10,006,310
Shares Outstanding		5,255,124
Shares Issued		5,255,124
Liquidation Preference		$ 10,565
Carrying Value		$ 5

XML

Convertible Preferred Stock and Stockholders' Deficit - Common Stock - Additional Information (Detail) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Common stock, shares authorized	120,000,000	120,000,000
Preferred stock, shares authorized	20,000,000
Common stock, par value	$ 0.001	$ 0.001
Non-redeemable convertible preferred stock, par value	$ 0.001
Series D Redeemable Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Redeemable convertible preferred stock shares authorized	50	50
Series B, Series G and Series I-2 Non-redeemable Convertible Preferred Stock [Member]
Class Of Stock [Line Items]
Preferred stock, shares authorized	10,004,310

XML

Convertible Preferred Stock and Stockholders' Deficit - Common Stock Warrants - Additional Information (Detail) - $ / shares	1 Months Ended
	Mar. 31, 2016	Oct. 31, 2014	Jun. 30, 2021	Dec. 31, 2020
Class Of Warrant Or Right [Line Items]
Warrants issued exercisable for shares of common stock	11,159,995	62,047
Exercise price of warrants	$ 1.75	$ 1.75
October 2014 [Member]
Class Of Warrant Or Right [Line Items]
Common stock warrants issued expiration date			Apr. 30, 2020
March 2016 [Member]
Class Of Warrant Or Right [Line Items]
Common stock warrants issued expiration date			Mar. 31, 2021
Common stock warrants outstanding				3,948,569

XML

Convertible Preferred Stock and Stockholders' Deficit - Equity Incentive Plans - Additional Information (Detail) - shares	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2010	Dec. 31, 2006
2006 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expiry of options	10 years
Stock options expiration date	Nov. 16, 2016
Options granted to employees, directors and consultants	0
2006 Plan [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options that may be granted			100,000
2010 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expiry of options	10 years
2010 Plan [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options that may be granted		9,700,000

XML

Convertible Preferred Stock and Stockholders' Deficit - Stock Options - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021
2006 Plan and 2010 Plan [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expiry of options	10 years

XML

Convertible Preferred Stock and Stockholders' Deficit - Summary of Changes in Options Outstanding and Related Exercise Prices for Company's Common Stock Options Issued (Detail) - 2006 Plan and 2010 Plan [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Outstanding Options, Outstanding, Beginning balance | shares	4,255,371
Number of Outstanding Options, Granted | shares	1,761,962
Number of Outstanding Options, Forfeited or canceled | shares	(287,471)
Number of Outstanding Options, Expired | shares	(21,874)
Number of Outstanding Options, Outstanding, Ending balance | shares	5,707,988
Number of Outstanding Options, Vested and expected to vest at March 31, 2021 | shares	5,418,495
Number of Outstanding Options, Exercisable at March 31, 2021 | shares	3,791,027
Weighted Average Exercise, Outstanding, Beginning balance | $ / shares	$ 3.41
Weighted Average Exercise, Granted | $ / shares	0.39
Weighted Average Exercise, Forfeited or canceled | $ / shares	2.13
Weighted Average Exercise, Expired | $ / shares	285.32
Weighted Average Exercise, Outstanding, Ending balance | $ / shares	1.47
Weighted Average Exercise, Vested and expected to vest at March 31, 2021 | $ / shares	1.52
Weighted Average Exercise, Exercisable at March 31, 2021 | $ / shares	$ 1.96
Weighted Average Remaining Contractual Term (in years), Options Outstanding Ending Balance	7 years 8 months 26 days
Weighted Average Remaining Contractual Term (in years), Vested and expected to vest at March 31, 2021	7 years 7 months 17 days
Weighted Average Remaining Contractual Term (in years), Exercisable at March 31, 2021	6 years 8 months 19 days
Aggregate Intrinsic Value, Outstanding, Ending balance | $	$ 495
Aggregate Intrinsic Value, Vested and expected to vest at March 31, 2021 | $	$ 416

XML

Convertible Preferred Stock and Stockholders' Deficit - Fair Value of Stock Options Grants, Weighted Average Assumptions (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk-free interest rate	0.89%	0.37%	0.89%	0.37%
Expected stock price volatility	83.85%	88.82%	83.85%	88.82%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected life of options (in years)	5 years 8 months 1 day	5 years 4 months 9 days	5 years 8 months 1 day	5 years 4 months 9 days

XML

Convertible Preferred Stock and Stockholders' Deficit - Schedule of Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 172	$ 324	$ 406	$ 742
Cost of Sales [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	7	21	15	45
Research and Development [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	8	30	31	79
Selling and Marketing [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	5	20	22	42
General and Administrative [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 152	$ 253	$ 338	$ 576

XML

Convertible Preferred Stock and Stockholders' Deficit - Stock-Based Compensation - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021 USD ($)
Stockholders Equity Note [Abstract]
Unrecognized compensation expense related to stock options	$ 540,000
Unrecognized compensation cost related to unvested shares expected to be recognized, weighted-average period	1 year 10 months 24 days

XML

Convertible Preferred Stock and Stockholders' Deficit - Summary of Shares of Common Stock Reserved for Future Issuance (Detail)	Jun. 30, 2021 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock reserved for future issuance net	15,202,238
Options Outstanding [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock reserved for future issuance net	5,707,988
2010 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock reserved for future issuance net	3,827,272
Redeemable Convertible Preferred Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock reserved for future issuance net	2,457,143
Non-Redeemable Convertible Preferred Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of common stock reserved for future issuance net	3,209,835

XML

Related Party Transactions - Additional Information (Detail) - USD ($)		3 Months Ended	6 Months Ended		21 Months Ended
	Mar. 05, 2021	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 17, 2019
Related Party Transaction [Line Items]
Related party rent expense			$ 86,000	$ 84,000
Conversion note surrendered	$ 350,000
Unsecured Non-convertible Promissory Note [Member]
Related Party Transaction [Line Items]
Non-convertible promissory note, principal amount	$ 2,650,000
Annual interest rate	4.50%
Maturity date	Jan. 15, 2022
Related party transaction, description		The outstanding principal and accrued interest on the New Note is due and payable on January 15, 2022 and may be pre-paid by the Company without penalty at any time
Unsecured Non-convertible Promissory Note [Member] | Chief Executive Officer and Co-Chairman [Member]
Related Party Transaction [Line Items]
Non-convertible promissory note, principal amount					$ 2,300,000
Annual interest rate					4.50%
Maturity date		Jan. 15, 2021
S Real Estate Holding LLC [Member]
Related Party Transaction [Line Items]
Extended term of lease		3 years
Expiry of lease		Feb. 28, 2023
Percentage of increase in monthly base rent		2.00%

XML

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) Lease Installment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Commitments And Contingencies [Line Items]
Number of operating leases for real estate | Lease			3
Right-of-use assets	$ 733,000		$ 733,000		$ 874,000
Operating lease liabilities	1,023,000		1,023,000
Lease expense	118,000	$ 119,000	236,000	$ 237,000
Finance leases	0		0
Astellas Pharma [Member]
Commitments And Contingencies [Line Items]
Minimum license fee payable	$ 75,000		$ 75,000
Number of installments per year | Installment			2
Notice of termination under license agreement			30 days
Carlsbad, California [Member]
Commitments And Contingencies [Line Items]
Operating leases with term date			2023-02
Oceanside
Commitments And Contingencies [Line Items]
Operating leases with term date			2021-12
Frederick, Maryland [Member]
Commitments And Contingencies [Line Items]
Operating leases with term date			2025-11

XML

Commitments and Contingencies - Schedule of Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Operating Leases Future Minimum Payments Due [Abstract]
2021 (remaining six months)	$ 257
2022	394
2023	255
2024	233
2025	240
Total minimum lease payments	1,379
Less: imputed interest	(356)
Total future minimum lease payments	1,023
Less: operating lease liabilities, current	(309)	$ (346)
Operating lease liabilities, net of current portion	$ 714	$ 845

XML

Segments - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2021 Segment Units
Segment Reporting [Abstract]
Number of reporting segments | Segment	3
Number of business units | Units	2

XML

Segments - Revenues, Expenses and Operating Income (Loss) by Market Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues:
Total revenues	$ 1,833	$ 1,812	$ 3,491	$ 4,171
Operating expenses:
Total operating expenses	2,239	2,644	4,464	5,459
Operating income (loss)
Total operating income (loss)	(406)	(832)	(973)	(1,288)
Anti-aging Market [Member]
Revenues:
Total revenues	340	417	571	805
Operating expenses:
Total operating expenses	416	411	745	953
Operating income (loss)
Total operating income (loss)	(76)	6	(174)	(148)
Therapeutic Market [Member]
Operating expenses:
Total operating expenses	745	952	1,558	1,784
Operating income (loss)
Total operating income (loss)	(745)	(952)	(1,558)	(1,784)
Biomedical Market [Member]
Revenues:
Total revenues	1,493	1,395	2,920	3,366
Operating expenses:
Total operating expenses	1,078	1,281	2,161	2,722
Operating income (loss)
Total operating income (loss)	$ 415	$ 114	$ 759	$ 644

XML

Subsequent Events - Additional Information (Detail)	Aug. 13, 2021 USD ($)
Subsequent Events [Member] | Second Draw Loan [Member]
Subsequent Event [Line Items]
Amount of forgiveness consisted of unpaid principal and accrued interest	$ 476,000