International Stem Cell Corporation Issues Letter to Shareholders

Letter Describes Capital Funding, Strengthening of Senior Management Team, Agreement with Cytograft Tissue Engineering, Positive Results from Animal Trials, and Other Developments

International Stem Cell Corporation (OTCBB:ISCO), the first company to perfect a method of creating human stem cells from unfertilized eggs, has issued a letter to its shareholders. To view the shareholder letter in its entirety, please follow the link to the company's website: http://www.internationalstemcell.com/shareholderletter.htm.

In the letter, International Stem Cell CEO and Chairman, Kenneth Aldrich updates shareholders on the company's continued efforts to increase shareholder value related to its key initiatives and developments, which include:

* The Company continues to lead in the development of human parthenogenetic stem cell ("hpSC") research. ISCO has made major strides in deriving cells that may be useful in the treatment of liver disease and in the creation of human corneal tissue both as a potential therapeutic product for corneal disease and as an alternative to animal testing to assess the safety of drugs and consumer products.

* $5 million investment commitment with a biotechnology-focused fund announced in July; funding expected to be in tranches, with first $1.5 million expected in September. Additional $1 million tranche funded on schedule under previously announced preferred stock offering, and over $500,000 in private common stock sales funded during first 6 months of 2009

* Senior management team strengthened to provide greater capacity and flexibility as company expands its therapeutic and commercial activities

* Positive early results reported in May from animal trials designed to improve photorefractive keratectomy (PRK), a form of corrective laser eye surgery that offers an improved alternative to LASIK

* March 2009 agreement with Cytograft Tissue Engineering to design custom cell culture medium to cultivate living human vascular grafts

"Viewed from a scientific, political, managerial, and financial perspective, the past six months have been a vibrant and compelling time in our corporate history," says Mr. Aldrich. "The company remains committed to its vision of creating the means to manufacture, bank, and provide cells for patients that need them, on demand, at low cost, without the risk of immune rejection. We look forward to our shareholders reviewing this update, thank them for their steadfastness and support, and look forward to our shared work in the months and years ahead."

ABOUT INTERNATIONAL STEM CELL CORPORATION (ISCO.OB)

International Stem Cell Corporation is a California biotechnology company focused on developing therapeutic and research products. ISCO's technology, Parthenogenesis, results in the creation of pluripotent human stem cell lines from unfertilized human eggs. ISCO scientists have created the first Parthenogenetic homozygous stem cell line (phSC-Hhom-4) that can be a source of therapeutic cells that will minimize immune rejection after transplantation into hundreds of millions of individuals of differing sexes, ages and racial groups. These advancements offer the potential to create the first true "Stem Cell Bank" and address ethical issues by eliminating the need to use or destroy fertilized embryos. ISCO also produces and markets specialized cells and growth media worldwide for therapeutic research through its subsidiary Lifeline Cell Technology. For more information, visit the ISCO website at: www.internationalstemcell.com.

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For more news and information on International Stem Cell Corporation please visit www.IRGnews.com/coi/ISCO where you can find the CEO's video, a fact sheet on the company, investor presentations, and more.

FORWARD-LOOKING STATEMENTS:

Statements pertaining to expected future financial and/or operating results, anticipated funding, future research, technology and clinical development plans and potential opportunities for the company and its subsidiary, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to statements that contain words such as "will," "believes," "plans," "anticipates," "expects," "estimates,") should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the completion of funding commitments, the development and/or commercialization of potential products, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital,and maintenance of intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements and as such should be evaluated together with the many uncertainties that affect the company's business, particularly those mentioned in the cautionary statements found in the company's Securities and Exchange Commission filings. The company disclaims any intent or obligation to update these forward-looking statements.

Key Words: Stem Cells, Biotechnology, Parthenogenesis

International Stem Cell Corporation
Kenneth C. Aldrich, Chairman, CEO
kaldrich@intlstemcell.com
760-940-6383
or
The Investor Relations Group
212-825-3210
Investor Relations:
Adam S. Holdsworth
aholdsworth@investorrelationsgroup.com
or
Media Relations:
Laura Colontrelle
lcolontrelle@investorrelationsgroup.com