SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

INTERNATIONAL STEM CELL CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

March 24,October 29, 2014

Dear Stockholder:

This year’s annualPlease take notice that a special meeting of stockholders will be held on Thursday, May 8,December 4, 2014, at 8:00 a.m. PDT, at the Sheraton Carlsbad Resort & Spa, 5480 Grand PacificInternational Stem Cell Corporation, 5950 Priestly Drive, Carlsbad, California 92008. You are cordially invited to attend.

The Notice of AnnualSpecial Meeting of Stockholders and a Proxy Statement, which describes the formal business to be conducted at the meeting, follow this letter.

It is important that you use this opportunity to take part in the affairs of International Stem Cell Corporation by voting on the business to come before this meeting. After reading the Proxy Statement, please promptly mark, sign, date and return the enclosed proxy card in the prepaid envelope to assure that your shares will be represented. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before our stockholders is important.

A copy of International Stem Cell Corporation’s Annual Report to Stockholders is also enclosed for your information. At the annual meeting we will review International Stem Cell Corporation’s activities over the past year and our plans for the future. The Board of Directors and management look forward to seeing you at the annual meeting.

Sincerely yours,

TABLE OF CONTENTS

5950 Priestly Drive

Carlsbad, California 92008

NOTICEOF ASNNUALPECIAL MEETINGOF STOCKHOLDERS

TO BE HELD MDAYECEMBER 8,4, 2014

TO OUR STOCKHOLDERS:

Notice is hereby given that the annuala special meeting of the stockholders of International Stem Cell Corporation, a Delaware corporation, will be held on May 8,December 4, 2014, at 8:00 a.m. PDT, at the Sheraton Carlsbad Resort & Spa, 5480 Grand PacificInternational Stem Cell Corporation, 5950 Priestly Drive, Carlsbad, California 92008 for the following purposes:

Stockholders of record at the close of business on March 19,October 24, 2014 are entitled to notice of, and to vote at, this meeting and any adjournment or postponement thereof.

Jay Novak

Chief Financial Officer and Secretary

Carlsbad, California

March24,October 29, 2014

IMPORTANT: Please fill in, date, sign and promptly mail the enclosed proxy card in the accompanying postage-paid envelope to assure that your shares are represented at the meeting. If you attend the meeting, you may choose to vote in person even if you have previously sent in your proxy card. However, if your shares are held of record by a broker or other nominee you will need to obtain a legal proxy from the holder of record to vote in person at the meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUALSPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 8,DECEMBER 4, 2014: Our Proxy Statement is attached. Financial and other information concerning International Stem Cell Corporation is contained in our Annual Report to Stockholders for the fiscal year ended December 31, 2013. A complete set of proxy materials relating to our annualspecial meeting is available on the Internet. These materials, consisting of the Notice of AnnualSpecial Meeting, Proxy Statement, and Proxy Card, and Annual Report to Stockholders, may be viewed at:

http://ISCO.proxy.internationalstemcell.com

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS

Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials via the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders. All stockholders will have the ability to access our Annual Report to Stockholders and this Proxy Statement on the website referred to in the Notice or request to receive a printed set of our Annual Report to Stockholders and this Proxy Statement. Instructions on how to access our Annual Report to Stockholders and this Proxy Statement over the Internet or to request a printed copy of our Annual Report to Stockholders and this Proxy Statement may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail on an ongoing basis. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our annual meetings.

Our Annual Report to Stockholders and this Proxy Statement are also available on our website at http://ISCO.proxy.internationalstemcell.com.

PROXY STATEMENT FOR ANNUALSPECIAL MEETING OF STOCKHOLDERS

The accompanying proxy is solicited by the Board of Directors of International Stem Cell Corporation, a Delaware corporation, for use at its annualthe special meeting of stockholders to be held on May 8,December 4, 2014, or any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of AnnualSpecial Meeting of Stockholders. A Notice of Internet Availability ofThis Proxy Materials isStatement and accompanying proxy are first being mailedsent to stockholders on or about March 27,October 30, 2014.

SOLICITATION AND VOTING

Voting Securities. Only stockholders of record as of the close of business on March 19,October 24, 2014, will be entitled to vote at the meeting and any adjournment thereof. As of March 19,October 24, 2014, we had 155,575,053outstanding 224,304,073 shares of Common Stock, 300,000 shares of Series B Preferred Stock, 43 shares of Series D Preferred Stock, and 5,000,000 shares of Series G Preferred Stock outstanding.Stock. All of the above shares are entitled to vote with respect to all matters to be acted upon at the annualspecial meeting. In addition, we had outstanding 2,000 shares of non-voting Series H-1 Preferred Stock and 500 shares of non-voting Series H-2 Preferred Stock. Each stockholder of record as of that date is entitled to one vote for each share of Common Stock held by him or her and each holder of shares of Preferred Stock is entitled to vote the equivalent number of common shares that the respective classes of preferred shares can be converted into.into, with the exception of Series H-1 and Series H-2 Preferred Stock, which is non-voting. As a result, the shares of Series B Preferred Stock are entitled to a total of 2,066,1164,653,327 votes, the shares of Series D Preferred Stock are entitled to a total of 28,666,66766,697,689 votes, and the shares of Series G Preferred Stock are entitled to a total of 16,533,44426,309,115 votes. Our Bylaws provide that a majority of all of the shares of the stock entitled to vote, whether present in person or represented by proxy, shall constitute a quorum for the transaction of business at the meeting. Votes for and against, abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum.

Broker Non-Votes. A broker non-vote occurs when a broker submits a proxy card with respect to shares held in a fiduciary capacity (typically referred to as being held in “street name”) but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. Under the rules that apply to brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include the ratification of auditors and the approval of the amendment to our certificate of incorporation to increase the number of authorized shares of common stock. The electionstock and the approval of directors, isthe amendment to our certificate of incorporation to effect a non-routine matter, and if your shares are held in street name they will only be voted on this matter if you provide instructions to your broker.reverse stock split of our common stock.

Solicitation of Proxies. We will bear the entire cost of soliciting proxies. In addition to soliciting stockholders by mail and through our employees, we will request banks, brokers and other custodians, nominees and fiduciaries to solicit customers for whom they hold our stock and will reimburse them for their reasonable, out-of-pocket costs. We may use the services of our officers, directors and others to solicit proxies, personally or by telephone, without additional compensation. In addition, we may retain a proxy solicitation firm or other third party to assist us in collecting or soliciting proxies from our stockholders, although we do not currently plan on retaining such a proxy solicitor.

Voting of Proxies. All valid proxies received before the meeting will be exercised. All shares represented by a proxy will be voted, and where a proxy specifies a stockholder’s choice with respect to any matter to be acted upon, the shares will be voted in accordance with that specification. If no choice is indicated on the proxy, the shares will be voted on each proposal as recommended by the Board of Directors.

Revocation orof Proxies.A stockholder giving a proxy has the power to revoke his or her proxy at any time before it is exercised by delivering to the Secretary of International Stem Cell Corporation, a written instrument revoking the proxy or a duly executed proxy with a later date, or by attending the meeting and voting in person.

Voting Results. We will announce preliminary voting results at the annualspecial meeting. We will report final results in a Form 8-K report filed with the Securities and Exchange Commission (the “SEC”).

PROPOSAL NO. 1

ELECTION OF DIRECTORS

We have an unclassified Board of Directors that consists of five directors. Our directors are elected for a term of one year and are up for election every year. Once elected, directors serve until their respective successors are duly elected and qualified.

Two of our directors are elected by the holders of Series D Preferred Stock voting as a separate class. The holders of Series D Preferred Stock have nominated Ruslan Semechkin and Andrey Semechkin for reelection to the Board of Directors. Additionally, holders of the Series G Preferred Stock previously nominated Donald A. Wright for election to the Board of Directors, which nominations were approved by our Governance Committee and recommended for election by our shareholders. The other two nominees recommended by the Board of Directors for election by our stockholders are Paul V. Maier and Charles J. Casamento. All nominees are current members of our Board of Directors and, if reelected, they will serve as directors until our annual meeting of stockholders in 2015 or until their successors, if any, are elected and qualified. If any nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as we may designate.

The following table sets forth, the director nominees to be elected at this meeting, information with respect to their ages and background:

Director Nominees:

Andrey Semechkin, Ph.D., Co-Chairman and CEO, has been a director of the Company since December 2008. Dr. Semechkin has served as our CEO since 2009. Dr. Semechkin is a specialist in system analysis, strategic planning and corporate management. He is a member of the Russian Academy of Sciences and was the Deputy Director of Institute of System Analysis from 2004 to 2011. Dr. Semechkin was awarded the Russian Government Award in Science and Technology in 2006 and has written several scientific books. He has over 20 years experience creating and managing businesses across different industries and scientific sectors. The Governance Committee noted that Dr. Andrey Semechkin has been nominated, and is expected to be elected, by the holders of Series D Preferred Stock. The Governance Committee noted Dr. Semechkin’s knowledge and understanding of business management combined with his business acumen and judgment provide our Board with valuable expertise and leadership skills. Dr. Semechkin is the father of Dr. Ruslan Semechkin, one of our directors and Chief Scientific Officer.

Donald A. Wright became a director in March 2007. Since January 2010, Mr. Wright has served as Chief Executive Officer and President of ISIS, Inc. which provides various services under contract to various agencies of the US Government and armed services. Mr. Wright was previously the Chairman and Founder of Everett, Washington-based Confluence Capital Group Inc., which provided consulting services to institutional investors, debt holders and public and private companies. From 1995 until 2006, Mr. Wright was Chief Executive Officer and President of Pacific Aerospace & Electronics, Inc., an engineering and manufacturing company that he helped to found and that designs, manufactures and sells components primarily for the aerospace, defense and transportation industries. The Governance Committee believes that Mr. Wright’s director qualifications include

serving on multiple public and private company Boards over the last 35 years, and certification from UCLA’s Anderson School of Business for Directors of Public Companies which included modules on the Finance, Audit, Compensation and Corporate Governance Committees.

Charles J. Casamento has been a director since June 2010. Since 2007, Mr. Casamento has been Executive Director and Principal of The Sage Group, a healthcare advisory group specializing in mergers, acquisitions, and partnerships between biotechnology companies and pharmaceutical companies. He was the president and CEO of Osteologix, Inc., a public biopharmaceutical company developing products for treating osteoporosis, from 2004 through 2007. From 1999 through 2004, he served as chairman of the board, president and CEO of Questcor Pharmaceuticals, Inc. Mr. Casamento formerly served as RiboGene, Inc.’s president, CEO and chairman of the board from 1993 through 1999 until it merged with Cypros to form Questcor. He was co-founder, president and CEO of Interneuron Pharmaceuticals, Inc. (Indevus), a biopharmaceutical company, from 1989 until 1993. Mr. Casamento has also held senior management positions at Genzyme Corporation, where he was senior vice president, pharmaceuticals and biochemicals; American Hospital Supply, where he was vice president of business development and strategic planning for the Critical Care Division; Johnson & Johnson, Hoffmann-LaRoche, Inc. and Sandoz Inc. Mr. Casamento also serves on the Boards of Directors of CORTEX Pharmaceuticals, SuperGen, Inc. and VIVUS, Inc. He holds a bachelor’s degree in Pharmacy from Fordham University and an M.B.A. from Iona College and was originally licensed to practice pharmacy in the states of New York and New Jersey. The Governance Committee believes that Mr. Casamento’s director qualifications include serving as President or CEO of various life sciences companies, and his experience serving on other Boards and in other senior management positions.

Paul V. Maier became a director in July 2007 and has over 20 years of experience as a senior executive in biotechnology and pharmaceutical companies. Since November 2009, he has been serving as Chief Financial Officer of Sequenom, Inc., a publicly held company serving the discovery, clinical research, and molecular diagnostics market. From February 2007 until November 2009, he served as an independent financial consultant. Previously, Mr. Maier was Senior Vice President and Chief Financial Officer of Ligand Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, a position he held from 1992 to 2007. From 1990 to 1992, Mr. Maier served as Vice President, Finance of DFS West, a division of DFS Group, LP a private multinational retailer. From 1984 to 1990, Mr. Maier was employed by ICN Pharmaceuticals, a pharmaceutical and biotechnology research products company, where he held various executive positions in finance and general management in ICN as well as SPI Pharmaceuticals, a publicly held subsidiary. Mr. Maier currently serves on the Board of Directors of Apricus Biosciences. Mr. Maier received an MBA from Harvard Business School and a BS from Pennsylvania State University. The Governance Committee believes that Mr. Maier’s director qualifications include his education and his financial and management experience and Board experience with life sciences companies. Mr. Maier currently serves as Audit Committee Chair of Apricus Biosciences.

Ruslan Semechkin, Ph.D., Director, Chief Scientific Officer, became a Director in October 2008. He has served as our Chief Scientific Officer since June 2013 and has served in various positions (most recently as Vice President of Research and Development) since joining us in December 2008. Dr. Semechkin was trained in neuroscience, stem cell biology and international business administration, and holds an M.Sc. degree in Clinical Genetics from the Faculty of Medicine of Moscow State University. He earned his Ph.D. degree in Human Physiology from the Russian Academy of Medical Sciences. Dr. Semechkin is a well-known speaker on stem cell biology, including the use of stem cells for neurology and skin regeneration. He has publications in the field of clinical and molecular biology, and is author of various patent applications. Dr. Semechkin is an active member of the American Academy of Neurology, the Society of Neuroscience and the International Society for Stem Cell Research. Dr. Ruslan Semechkin was nominated, and is expected to be elected, by the holders of our Series D Preferred Stock. The Governance Committee notes Dr. Semechkin’s knowledge and understanding of our skincare business and research programs, combined with his business acumen and judgment, provide our Board with valuable insight and expertise. Dr. Ruslan Semechkin is the son of Dr. Andrey Semechkin, ourCo-Chairman and Chief Executive Officer.

Vote Required and Board Recommendation

If a quorum is present and voting at the meeting, the nominees for election by the holders of Series D Preferred Stock, and three other nominees for director receiving the highest number of votes will be elected as the directors. Abstentions and broker non-votes have no effect on the vote.

The Board of Directors unanimously recommends a vote “FOR” each of the nominees named above (Item 1 on the Enclosed Proxy Card).

CORPORATE GOVERNANCE

Director Independence

The Board of Directors has determined that each of Mr. Maier, Mr. Wright, and Mr. Casamento satisfy the independence requirements specified in the listing requirements of Nasdaq Marketplace Rules.

Executive Sessions

Our independent directors generally meet in executive sessions without management present each time the Board holds its regularly scheduled meetings.

Board Meetings and Committees

During 2013, the Board of Directors met seven times. The Board of Directors has an Audit Committee, a Compensation Committee, and a Governance Committee. During the last fiscal year, each of our current directors attended all of meetings of the Board and all of the committees of the Board on which such director served during that period.

Audit Committee.

The members of the Audit Committee are Paul V. Maier (Chairman), Donald A. Wright and Charles Casamento. Mr. James H. Berglund served as a member of the Audit Committee until his Board service ended in September 2013. Each of the members of the Audit Committee satisfies the independence requirements established by the Nasdaq Marketplace Rules. Mr. Maier is an audit committee financial expert, as defined in the rules of the Securities and Exchange Commission. The Audit Committee operates under a written charter that is available on our website at: www.internationalstemcell.com. The primary purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the functions of the Audit Committee include retaining our independent auditors, reviewing their independence, reviewing and approving the planned scope of our annual audit, reviewing and approving any fee arrangements with our auditors, overseeing their audit work, reviewing and pre-approving any non-audit services that may be performed by them, reviewing the adequacy of accounting and financial controls, reviewing our critical accounting policies and reviewing and approving any related party transactions. The Audit Committee held four meetings during the fiscal year ended December 31, 2013. The Committee meets and confers at least quarterly with the outside auditors and generally conducts an executive session without management at each meeting.

Additional information regarding the Audit Committee is set forth in the Report of the Audit Committee immediately following Proposal No. 2.

Governance Committee.

The members of the Governance Committee are Donald A. Wright (Chairman), Paul V. Maier, and Charles J. Casamento. Each of the members of the Governance Committee satisfies the independence requirements established by the Nasdaq Marketplace Rules. The Governance Committee operates under a written charter that is available on our website at: www.internationalstemcell.com. The primary responsibilities of the Governance Committee are to (i) recommend applicable corporate governance principles, codes of conduct and compliance mechanisms, (ii) evaluate the effectiveness of the board and board committees; (iii) evaluate the effectiveness of senior management and succession planning; (iv) review the corporation’s director compensation programs and policies; (v) examine board meeting policies, such as meeting schedule and location, meeting agenda, the presence and participation of non-director senior executives and written materials distributed in advance of meeting; (vi) review the board’s committee structure, including each committee’s charter and size. The Governance Committee held two meetings during the fiscal year ended December 31, 2013.

The Governance Committee’s goal is to assemble a Board of Directors that brings a variety of perspectives and skills derived from high quality business and professional experience. There are no stated minimum criteria for director nominees, but the Governance Committee believes that at least one member of the Board should meet the criteria for an “audit committee financial expert” as defined by U.S. Securities and Exchange Commission rules, and that at least three members of the Board should meet the definition of “independent director” under the Nasdaq Marketplace Rules. The Governance Committee also believes it appropriate for certain key members of management to participate as members of the Board.

While we do not have a formal diversity policy, our Board of Directors believes that our Board should have diversity of knowledge base, professional experience and skills. When considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by our stockholders, the Governance Committee will review the candidate’s integrity, business acumen, age, experience, commitment, diligence, conflicts of interest, existing time commitments and the ability to act in the interests of all stockholders. Once a potential qualified candidate is identified, multiple members of the Governance Committee will interview that candidate. The committee may also ask the candidate to meet with non-committee members of the Board and/or members of management and, if the committee believes a candidate would be a valuable addition to the Board, it will recommend that candidate to the full Board.

Compensation Committee.

The members of the Compensation Committee are Donald A. Wright (Chairman), Paul V. Maier, and Charles J. Casamento. Each of the members of the Compensation Committee satisfies the independence requirements established by the Nasdaq Marketplace Rules. The Compensation Committee operates under a written charter that is available on our website at: www.internationalstemcell.com. The Compensation Committee’s responsibilities are to (i) establish and modify through consultation with senior management, the Company’s general compensation philosophy and oversee the development and implementation of executive compensation programs and policies; (ii) evaluate the performance and set compensation (including base salary, incentive compensation and equity based awards) of the Chief Executive officer; (iii) review and approve the compensation (including base salary, incentive compensation and equity-based awards) of officers above the level of Vice President, review and approve compensation guidelines for all other officers, review compensation of Directors above the equivalent level of Vice president and review and approve the compensation guidelines for all other officers; (iv) review the terms of the Company’s incentive compensation plans, equity based plans, retirement plans, and welfare benefit plans; (v) review policies with respect to post-service arrangements and perquisites provided to officers above the level of Vice President, including the Chief Executive Officer and perquisites policies for Vice Presidents; and (vi) review the related tabular and other disclosures about director and executive compensation proposed by management for inclusion in the Company’s annual report and proxy statement. The Compensation Committee held two meetings during the fiscal year ended December 31, 2013.

In determining executive compensation, the Committee reviews and approves any Company goals and objectives relevant to the compensation of executive officers and evaluates the performance of executive officers in light of those goals and objectives. Based on such evaluation, the Committee has the sole authority to set the compensation (including base salary, incentive compensation and equity-based awards) of the executive officers. In determining incentive compensation, the Committee considers, among other factors it deems appropriate, the Company’s performance, the recommendations of the CEO, the value of similar incentive awards to executive officers at comparable companies, and the awards given to management in prior years.

Stockholder Recommendations for Director Nominees

Pursuant to the terms of its charter, the Governance Committee will consider qualified director candidates suggested by our stockholders. Stockholders may recommend individuals for the Governance Committee to consider as potential director candidates by submitting the candidate’s name, contact information and biographical information in writing to the “International Stem Cell Corporation Governance Committee” c/o Corporate Secretary, 5950 Priestly Drive, Carlsbad, CA 92008. The biographical information and background

materials will be forwarded to the Governance Committee for its review and consideration. The committee’s review of candidates identified by our stockholders is essentially identical to the review process for candidates identified by the committee. In addition to the process discussed above regarding the consideration of the Governance Committee of candidates suggested by our stockholders, our Bylaws contain provisions that address the process and related deadlines by which a stockholder may nominate an individual to stand for election to our Board at our annual meeting of stockholders.

Communications with Directors

Any stockholder who desires to contact any members of our Board of Directors may do so by writing to: Board of Directors, c/o Corporate Secretary, 5950 Priestly Drive, Carlsbad, CA 92008. Communications received in writing are distributed to the Co-Chairmen of the Board or the other members of the Board as appropriate depending on the facts and circumstances outlined in the communication received.

Director Attendance at Annual Meetings

Although we do not have a formal policy regarding attendance by members of the Board at our annual meeting of stockholders, we encourage directors to attend. All of our directors attended last year’s annual meeting.

Non-Director Executive Officers

John Simon Craw, Ph.D., Executive Vice President of Business Development, joined us in 2010. Dr. Craw obtained his Ph.D. in Chemistry from the University of Manchester and began his career at the University of Rio de Janeiro followed by positions at the University of Sydney and the University of Manchester. He has over 18 years experience in research and development as well as operations and information technology at Merck, Astra-Zeneca and Novartis and as head of R&D Informatics and Regulatory Operations at ACADIA Pharmaceuticals. Dr. Craw’s has numerous scientific publications, has been a guest on numerous radio and television programs including National Public Radio and Fox News, and is a frequent speaker at international conferences.

Jay Novak, Chief Financial Officer and Secretary has over 18 years of experience in finance and accounting. He joined the Company in July 2011 and served as Director of Finance from May 2012 until he became Chief Financial Officer in April 2013. Prior to joining the Company, Mr. Novak has served in various finance and accounting roles at several publicly traded companies. His experience includes serving as Associate Director of Finance at Nanogen, Inc., Associate Director of Finance at Elan Pharmaceuticals, and Assistant Director of Finance at Isis Pharmaceuticals, Inc. Mr. Novak is a certified public accountant, and began his career with Deloitte & Touche, LLP. He has received a B.S in Accountancy from California State University, Long Beach and an M.B.A. from University of California, Irvine.

Code of Conduct and Ethics

The Board has adopted a Code of Conduct and Ethics that applies to all of our employees, officers and directors. We will provide to any person, without charge, a copy of the Code of Conduct and Ethics upon request directed to our Corporate Secretary at 5950 Priestly Drive, Carlsbad, CA, 92008 or by telephone at(760) 940-6383.

Risk Management

The Board as a whole is responsible for overseeing the Company’s risk exposure as part of determining a business strategy that generates long-term shareholder value. Each of the Board’s standing committees focuses on risk areas associated with its area of responsibility.

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Audit Committee of the Board of Directors of International Stem Cell Corporation has selected Mayer Hoffman McCann P. C. as independent auditors to audit the consolidated financial statements of International Stem Cell Corporation for the fiscal year ending December 31, 2014. Mayer Hoffman McCann P.C. has acted as our independent auditors since its appointment on March 25, 2011. A representative of Mayer Hoffman McCann P.C. is expected to be present at the annual meeting, with the opportunity to make a statement if the representative desires to do so, and is expected to be available to respond to appropriate questions.

Stockholder ratification of the selection of Mayer Hoffman McCann P.C. as our independent auditors is not required by our Bylaws or otherwise. However, the Board is submitting the selection of Mayer Hoffman McCann P.C. to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. Mayer Hoffman McCann P.C. (“MHM”) has advised the Company that MHM leases substantially all of its personnel, who work under the control of MHM’s shareholders, from wholly-owned subsidiaries of CBIZ, Inc., in an alternative practice structure. Accordingly, substantially all of the hours expended on MHM’s engagement to audit the Company’s consolidated financial statements for the year ended December 31, 2013 and 2012, were attributed to work performed by persons other than MHM’s full-time, permanent employees.

The following table sets forth the aggregate fees billed to International Stem Cell Corporation for the fiscal years ended December 31, 2013 and 2012 by Mayer Hoffman McCann P.C. our independent registered public accounting firm:

The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent auditors. These services may include audit services, audit-related services, tax services and other

services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. The independent auditor and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval. The Audit Committee pre-approved all services provided by our independent auditors during the fiscal years ended December 31, 2013 and 2012.

Vote Required and Board of Directors Recommendation

The affirmative vote of a majority of the votes cast at the meeting is required to ratify the appointment of Mayer Hoffman McCann P.C. as our independent auditor for the fiscal year ending December 31, 2014. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.

The Board of Directors unanimously recommends a vote “FOR” the ratification of the appointment of Mayer Hoffman McCann P.C. as our independent auditors for the fiscal year ending December 31, 2014.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS*

The Audit Committee has reviewed and discussed the audited consolidated financial statements for the fiscal year ended December 31, 2013 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standards No. 16 “Communication with Audit Committees,”, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

PROPOSAL NO. 3

APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

The Board of Directors is requesting stockholder approval of an amendment to our Certificate of Incorporation to increase our authorized number of shares of common stock from 300,000,000600,000,000 shares to 600,000,000720,000,000 shares.

The additional common stock to be authorized by adoption of the amendment would have rights identical to our currently outstanding common stock. Adoption of the proposed amendment and issuance of the common stock would not affect the rights of the holders of our currently outstanding common stock, except for effects incidental to increasing the number of shares of our common stock outstanding, such as dilution of the earnings per share and voting rights of current holders of our common stock. If the amendment is adopted, it will become effective upon filing of a Certificate of Amendment of our Certificate of Incorporation with the Secretary of State of the State of Delaware.

In addition to the 154,375,053224,304,073 shares of common stock outstanding on February 28,October 24, 2014, the Board has reserved 23,553,19327,032,993 shares for issuance upon exercise of stock options that were outstanding on February 28,October 24, 2014 and 12,877,7508,532,791 shares for future issuances and grants made under our equity incentive plans. In addition, the Board has reserved 47,245,689136,437,857 shares of common stock which may be issued upon the conversion of shares of our preferred stock outstanding on February 28,October 24, 2014, 45,658,654and 133,402,332 shares of common stock which may be issued upon the exercise of warrants outstanding on February 28, 2014 and 15,133,334 shares of common stock which may be issued and sold pursuant to our Common Stock Purchase Agreement with Lincoln Park Capital, LLC if we are able to satisfy the conditions precedent for sales of shares under this agreement.October 24, 2014. As a result, on February 28,October 24, 2014, there were only 1,164,32770,289,953 shares of common stock available for issuance for other purposes. If we are unable to use shares of common stock to raise capital, we would be required to curtail various research and development programs and/or sell or grant licenses to our technology for various fields of use.

Although at presentOn October 14, 2014, we closed a private placement (the “Private Placement”) of Series H-1 and Series H-2 preferred stock and warrants, convertible and exercisable, respectively, into shares of our common stock, for gross proceeds of $2,500,000. The investors in the Private Placement included institutional investors and Andrey and Ruslan Semechkin, our Chief Executive Officer and Chairman and Chief Scientific Officer and Director, respectively. The securities purchase agreement entered into in the Private Placement requires us to hold a special meeting of stockholders to seek stockholder approval of an increase the number of authorized shares of common stock under our certificate of incorporation to 720,000,000 shares and approve a reverse stock split as described below under Proposal 2. In connection with the Private Placement, we also entered into a registration rights agreement as amended, (the “Registration Rights Agreement”) with the investors pursuant to which we are obligated to file a registration statement to register the resale of (i) 200% of the shares of Common Stock issuable upon conversion of the Preferred Stock, and (ii) 100% of the shares of common stock issuable upon exercise of the warrants. Therefore, we are submitting this proposal to comply with the terms of the Private Placement agreements.

In addition to the requirements of the Private Placement, the Board of Directors has no specific plans to issue the additional shares of common stock that would be available if this proposal is approved, the Board of Directorsalso desires to have the shares available to provide additional flexibility to use capital stock for business and financial purposes in the future.future, although the Board of Directors has no specific plans to issue additional shares of common stock that would be available if this proposal is approved. The additional shares may be used for various purposes without further stockholder approval. These purposes may include: raising capital; providing equity incentives to employees, officers or directors; establishing strategic relationships with other companies; expanding our business or product lines through the acquisition of other businesses or products; and other purposes.

The additional shares of common stock that would become available for issuance if the proposal is adopted could also be used by the company to oppose a hostile takeover attempt or to delay or prevent changes in control or management of the company. For example, without further stockholder approval, the Board of Directors could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board of Directors. Although this proposal to increase the authorized common stock has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board of Directors currently aware of any such attempts directed at us), stockholders should be aware that approval of this proposal could facilitate future efforts by the company to deter or prevent changes in control of the company, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices.

If this proposal is approved and the amendment becomes effective, Section 1 of Article Fourth of our Certificate of Incorporation, which sets forth our currently authorized capital stock, will be amended to read in its entirety as follows:

“Section 1. Authorization of Shares.

The aggregate number of shares of capital stock which the Corporation will have the authority to issue is 740,000,000 shares, consisting of 720,000,000 shares of common stock, having a par value of $0.001 per share (“Common Stock”), and 20,000,000 shares of preferred stock, having a par value of $0.001 per share (“Preferred Stock”).”

Description of Common Stock

Voting Rights

Holders of our common stock are entitled to one vote per share. Subject to any voting rights granted to holders of any preferred stock, the affirmative vote of a majority of the shares present in person or by proxy and

entitled to vote on the subject matter, other than the election of directors, will generally be required to approve matters voted on by our stockholders. Directors will be elected by plurality of the votes of the shares present in person or represented by a proxy at the meeting entitled to vote on the election of directors. Our certificate of incorporation does not provide for cumulative voting.

Dividends

Subject to the rights of holders of any outstanding preferred stock, the holders of outstanding shares of our common stock will share ratably on a per share basis in any dividends declared from time to time by our Board of Directors.

Other Rights

Subject to the rights of holders of any outstanding preferred stock, upon our liquidation, dissolution or winding up, we will distribute any assets legally available for distribution to our stockholders, ratably among the holders of our common stock outstanding at that timetime.

Vote Required and Board of Directors Recommendation

The affirmative vote of the holders of (i) a majority of the outstanding shares of our common stock and (ii) a majority of the outstanding shares of our common stock and preferred stock, voting together as a single class on an as-converted to common stock basis, will be required to approve this amendment to the our Certificate of Incorporation. As a result, abstentions and broker non-votes will have the same effect as negative votes.

If this proposal is approved and the amendment becomes effective, Section 1 of Article Fourth of our Certificate of Incorporation, which sets forth our currently authorized capital stock, will be amended to read in its entirety as follows:

“Section 1. Authorization of Shares.

The aggregate number of shares of capital stock which the Corporation will have the authority to issue is 620,000,000 shares, consisting of 600,000,000 shares of common stock, having a par value of $0.001 per share (“Common Stock”), and 20,000,000 shares of preferred stock, having a par value of $0.001 per share (“Preferred Stock”).”

The Board of Directors unanimously recommends a vote “FOR” Proposal 31 to amend our Certificate of Incorporation to increase the number of authorized shares of common stock from 300,000,000600,000,000 shares to 600,000,000720,000,000 shares.

EXECUTIVE COMPENSATIONPROPOSAL NO. 2

Executive OfficersAPPROVAL OF REVERSE STOCK SPLIT OF COMMON STOCK

We describeOn October 7, 2014, our Board approved an amendment to the Certificate of Incorporation, which the Board is recommending to the stockholders for approval, to implement a reverse split of our Common Stock at a ratio not less than one-for-fifty and not greater than one-for-one-hundred-fifty, with the exact ratio to be set within such range in the discretion of the Board of Directors, without further approval or authorization of our stockholders, provided that such amendment is filed with the Delaware Secretary of State no later than September 30, 2015.

Based on the number of shares currently issued and outstanding, immediately following the reverse split we would have approximately 4,486,081 shares of Common Stock issued and outstanding (without giving effect to rounding for fractional shares) if the ratio for the reverse split is one-for-fifty, and 1,495,360 shares of Common Stock issued and outstanding (without giving effect to rounding for fractional shares) if the ratio for the reverse split is one-for-one-hundred-fifty. Any other ratio selected within such range would result in a number of shares of Common Stock issued and outstanding following the transaction between the number of shares resulting from the reverse stock split ratios of 50 and 150.

The reverse split will be effective upon the filing of a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware. The Board of Directors will determine the exact ratio of the reverse split and the actual time of filing of the applicable Certificate of Amendment, provided that such amendment is filed no later than September 30, 2015. If both Proposal 1 and Proposal 2 are approved at the Special Meeting, we plan to file the Certificate of Amendment approved as part of Proposal 1 (in the form described in Proposal 1) before the Certificate of Amendment approved as part of Proposal 2 (in the form described below).

In the event that the Board of Directors decides to effect the reverse stock split (following stockholder approval) we would file a Certificate of Amendment to add the following paragraph to Section 1 of Article Fourth of our Certificate of Incorporation:

“Upon this sectionCertificate of Amendment becoming effective pursuant to the executive compensationDelaware General Corporation Law (the “Effective Time”), each [            ] ** shares of Common Stock issued and outstanding immediately prior to the Effective Time shall automatically, without further action on the part of the Company or any holder of Common Stock, be reclassified, combined and converted as of the Effective Time into one fully paid and non-assessable share of Common Stock. From and after the Effective Time, certificates representing shares of the Common Stock that were issued and outstanding prior to the Effective Time shall represent the number of whole shares of Common Stock into which such issued and outstanding shares of Common Stock shall have been reclassified pursuant to this Certificate of Amendment (subject to the treatment of fractional shares as set forth below); provided, however, that no fractional shares shall be issued to any holder of shares of Common Stock issued and outstanding prior to the Effective Time and that, instead of issuing such fractional shares, the Company shall round any fractional shares up to the nearest whole number in lieu of any other payment that would otherwise be made for such fractional share.”

Mechanics of Reverse Split

If the proposed reverse split proposal is approved by the our stockholders after the Board of Directors approves the ratio of the reverse split, the reverse split will be implemented by filing a Certificate of Amendment to our three named executive officers during 2013: Andrey Semechkin, Chief Executive Officer, John Simon Craw, Executive Vice PresidentCertificate of Business Development,Incorporation with the Secretary of State of the State of Delaware, in the form described below, and Ruslan Semechkin, Chief Scientific Officer.the reverse split will become effective on the date of the filing (the “Split Effective Date”). We will

obtain a new CUSIP number for the new Common Stock effective at the time of the reverse split. Stockholders who held shares of our Common Stock as of the close of business on the Split Effective Date (“Record Holders”) will be notified as soon as practicable after the Effective Date that the reverse split has been effected.

Compensation Overview

We are currently consideredShares registered directly in stockholder’s name. Our transfer agent will act as the exchange agent (the “Exchange Agent”) in implementing the exchange of outstanding certificates. As soon as practicable after the Split Effective Date, Record Holders will be notified and requested to surrender their certificates representing shares of pre-split Common Stock (“Old Common Stock”) to the Exchange Agent in exchange for certificates representing post-split Common Stock (“New Common Stock”). Any fractional shares resulting from the reverse split will be rounded up to nearest whole number. At the Split Effective Date, each lot of between 50 and 150 shares of Old Common Stock issued and outstanding immediately prior to the effective time will, automatically and without any further action on the part of our stockholders, be combined into and become one share of New Common Stock, subject to the treatment for fractional shares described above, and each certificate which, immediately prior to the effective time represented Old Common Stock, will be deemed cancelled and, for all corporate purposes, will be deemed to evidence ownership of New Common Stock. As soon as practicable after the Split Effective Date, a “smaller reporting company”letter of transmittal will be sent to stockholders of record as of the Split Effective Date for purposes of Securities andsurrendering to the Exchange Commission executive compensation and other disclosure rules and as such we have elected to complyAgent certificates representing Old Common Stock in exchange for certificates representing New Common Stock in accordance with the disclosure requirements applicableprocedures set forth in the letter of transmittal. No new certificates will be issued to smaller reporting companies. This executive compensation summary isa shareholder until such shareholder has surrendered such shareholder’s outstanding certificate(s), together with the properly completed and executed letter of transmittal, to the Exchange Agent. From and after the Split Effective Date, any certificates representing Old Common Stock which are submitted for transfer, whether pursuant to a sale, other disposition or otherwise, will be exchanged for certificates representing New Common Stock.

STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

Shares held through a bank, broker or other nominee. Stockholders holding our common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the consolidation than those that would apply for registered stockholders. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your bank, broker or nominee.

The number of shares which will result in fractional interests cannot be precisely predicted as we cannot determine in advance the number of stockholders whose total holdings are not intended to meet the “Compensation Discussion and Analysis” disclosure required of larger reporting companies.

Role of the Compensation Committee

All compensation for our executive officers is determined from time to timeevenly divisible by the Compensation Committeereverse stock split ratio. We do not anticipate that a substantial number of shares will be required to be issued as a result of rounding up fractional shares.

We believe that enabling our Board of Directors to set the reverse stock split ratio within the stated range will provide us with the flexibility to implement the reverse stock split in a manner designed to maximize the anticipated benefits for our stockholders. In determining the ratio within the stated range, our Board of Directors may consider, among other things, factors such as: the initial listing requirements of any national securities exchange for which is composed onlywe may intend to seek listing of independent directors. The Compensation Committee is also responsible for administrationour Common Stock; the historical trading price and trading volumes of our Common Stock; the number of shares of our Common Stock outstanding; the then prevailing trading price and trading volumes of our Common Stock; the anticipated impact of the equity incentive plans, including grants of equity awards to Company employees and consultants. In performing its functions the Compensation Committee relies, in part,reverse stock split on the input fromtrading market for our Common Stock; prevailing general market and economic conditions.

Reasons for the Chief Executive Officer and other members of senior management, however, the Committee retains the final decision-making authority over all executive compensation matters.

Compensation Philosophy and ObjectivesReverse Stock Split

The objectivesCompany’s Common Stock is quoted on the OTCQB Marketplace under the symbol “ISCO”. The shares of Common Stock of the Company have traded at very low prices for some time. As of October 24, 2014, the last reported closing price of the Company’s executive compensation programCommon Stock was $0.10. The reverse stock split is intended to increase the per share stock price. A sufficiently large increase in the share price of our Common

Stock, such as one that could result from the reverse stock split, would allow us to, among other things, apply for the listing of our Common Stock on a national securities exchange, such as NASDAQ. We also believe that if we are successful in maintaining a higher stock price, the stock will generate greater interest among professional investors and institutions. If we are successful in generating interest among such entities, we anticipate that the Company’s Common Stock would have greater liquidity and a stronger investor base. Our Board of Directors considered that, at current trading prices, our Common Stock may not appeal to attract, retainbrokerage firms that are reluctant to recommend lower priced securities to their clients. Investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stock. Moreover, the analysts of many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks. Additionally, the Board of Directors believes that many investment funds and reward executive officersinstitutional investors are reluctant to invest, and other key employees who contributein some cases are prohibited from investing, in lower priced stocks.

Further, our Board believes that a reverse stock split can offer advantages to the Company’s successCompany and to provide year-to-year and long-term incentives for these individuals to enhance stockholder value. In order to accomplish this we offer a total compensation package that consists of: (1) an annual base salary, based on the seniority and level of performance of the executive, (2) long-term incentives in the form of stock options and restricted stock awards, and (3) other benefits. From time to time, we review our compensation levels in comparison to available industry data,its stockholders apart from compliance with the last review being conducted using data provided by Aon Hewitt (formerly Radford) in 2011.

Base Salaries. Base salaries are an integral componentrules of a stock exchange. For example, while the implementation of a reverse stock split would not change the total number of shares of our total compensation program and help us attract and retain senior executives with desired skill sets. Our Chief Executive Officer provides recommendationscommon stock authorized for issuance, the number of shares of our common stock available for issuance following implementation of a reverse stock split would increase to the Compensation Committee based on an analysisextent the reverse stock split reduces the outstanding number of industry standardsshares of our common stock. For this reason our Board of Directors believes that a reverse stock split would provide our Company added flexibility by helping to ensure that we have sufficient authorized, unissued and an evaluation of each executive officer’s contributionotherwise unreserved shares available for financings that we have completed and financing and strategic transactions that our Company may pursue. In addition to the Company’s performance. Base salaries are reviewed and adjusted periodically to take into account changes in responsibility, and relevant experience, as well as current and anticipated cash resource limitations. Our Compensation Committee considers, but retains the right to accept, reject or modify recommendations from the Chief Executive Officer. Consideration of base salaries is conducted during Compensation Committee meetings and neither the Chief Executive Officer nor any other member of management is present during these meetings.

Long-Term Equity Incentives. Our Compensation Committee believes that equity-based compensation provides the executive officers and other employees with a strong economic incentive to increase stockholder value over the long term. Equity-based awards are made pursuant to our 2006 and 2010 Equity Participation Plans (the “Stock Plans”) that provide for grants of stock options, shares of restricted stock and other equity-based awards. Long-term equity awards may be granted to executive officers and other employees for contributions to the Company’s success. The terms of these equity awards generally provide time based vesting provisions and require the recipient to remain employed to obtain or exercise such awards on each vesting date. The Compensation Committee does not currently have a policy for the automatic awarding of equity awards to the executive officers or our other employees. Our Chief Executive Officer provides recommendations to the

Compensation Committee for equity grants to the executive officers and other employees, taking into account each employee’s performance, achievements, and other criteria deemed relevant. The Compensation Committee reviews the proposed grants, but reserves the right to reject or modify such recommendations. The timing of our typical equity awards is determined in advance. In general, we do not anticipate option grants on dates other than the scheduled meetings of the Compensation Committee. The grant date is established when the Compensation Committee approves the grant and all key terms have been determined.

Other Benefits. We provide group life insurance, health, vision and dental care insurance to all employees, including the executive officers. These benefits do not discriminate in scope, terms or operation in favor of the executive officers. All such benefits terminate at the time each individual is no longer employed with the Company or as otherwise provided in the applicable employment agreement. In 2012, we implemented a 401(k) defined contribution plan, which is our primary retirement benefit for employees, including executives. Although permitted under the plan, we have not matched employee contributions to the 401(k) plan. We do not provide our executive officers with any type of defined benefit retirement benefit or the opportunity to defer compensation pursuant to a non-qualified deferred compensation plan.

Employment/Severance Agreements. We have entered into severance pay agreement with Dr. Craw. Pursuant to the agreement, if his employment is terminated without “cause”, Dr. Craw will be entitled to a severance pay equivalent to three months base salary. We do not have severance agreements with Dr. Semechkin and Mr. Novak.

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning the compensation earned during the fiscal years ended December 31, 2013 and 2012 by our most highly compensated executive officers, who are sometimes referred to herein as our named executive officers.

2013 SUMMARY COMPENSATION TABLE