| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 21, 2019, International Stem Cell Corporation (the “Company”) entered into a Note Conversion Agreement with Dr. Andrey Semechkin, the Company’sCo-Chairman and Chief Executive Officer (the “Conversion Agreement”). The Conversion Agreement provides for the conversion of a total of $1,048,638.89 (representing $1,000,000 of principal and $48,638.89 of accrued interest, representing all accrued interest on the amount owed to Dr. Semechkin) under the promissory note issued to Dr. Semechkin on August 8, 2018 (the “Original Note”) into a total of 599,222 shares of the Company’s common stock, representing a conversion price of $1.75 per share. Under the Conversion Agreement, the remaining $1,000,000 owned to Dr. Semechkin under the Original Note has been reflected in a new unsecured,non-convertible promissory note in the principal amount of $1,000,000 (the “New Note”). The outstanding principal amount under the New Note accrues interest at a rate of four andone-half percent (4.5%) per annum. The New Note is due and payable on January 15, 2020, but may bepre-paid by the Company without penalty at any time.
The foregoing descriptions of the Conversion Agreement and the New Note are subject to, and qualified in their entirety by, such documents attached hereto as Exhibit 10.1, which is incorporated herein by reference
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information included in Item 1.01 above is incorporated by reference into this Item 3.02.
On November 14, 2018, the Company filed its Quarterly Report on Form10-Q for the quarterly period ended September 30, 2018 (the “Quarterly Report”), reporting 6,771,425 shares of common stock outstanding as of November 9, 2018.
Through January 21, 2019, the Company has issued a total of an additional 749,222 shares of common stock (including the 599,222 shares discussed in Item 1.01) in transactions that were not registered under the Securities Act of 1933, resulting in an increase in the number of shares of common stock outstanding by more than 5% compared to the number of shares outstanding as reported in the Quarterly Report. On November 15, 2018, the Company issued 150,000 shares to the holders of SeriesI-1 Convertible Preferred Stock upon the conversion of a portion of the shares of SeriesI-1 Convertible Preferred Stock held by such holders, with a conversion price of $1.75 per share. These shares of common stock issued upon conversion of the shares of SeriesI-1 Convertible Preferred Stock were issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act of 1933. As noted in Item 1.01, on January 21, 2019, the Company issued 599,222 shares of common stock upon conversion of a portion of the Company’s outstanding indebtedness and all accrued interest. The shares of common stock issued upon such conversion were issued in a private transaction in reliance upon the exemption from registration in Section 4(a)(2) of the Securities Act of 1933.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
