DD Support Board and Research Team

[236T568]

ISCO – The Russians, The Panama Papers, The Latvians – Follow The Money


International Stem Cell Corporation (OTCQB symbol: ISCO)



1. ISCO is a publicly traded company based in Carlsbad, CA at the following address:

5950 Priestly Drive
Carlsbad, CA 92008
760-940-6383

Corporate Website:
http://internationalstemcell.com/


2. ISCO SEC filings and Otcmarkets.com:

Otcmarkets.com
https://www.otcmarkets.com/stock/ISCO/profile

SEC filings
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001355790&type=&dateb=&owner=include&count=40

latest 10Q, March 31, 2019
https://www.sec.gov/Archives/edgar/data/1355790/000156459019019386/isco-10q_20190331.htm

latest 10K, Dec 31, 2018
https://www.sec.gov/Archives/edgar/data/1355790/000156459019011540/isco-10k_20181231.htm

latest Proxy Statement, filed 4/30/19
https://www.sec.gov/Archives/edgar/data/1355790/000156459019013942/isco-def14a_20190603.htm



3. ISCO currently lists only 3 officers, with several other additional board members.

The 3 officers are all Russian, with one, Russel Kern, now a U.S. Citizen, according to SEC filings by ISCO

From 10K and Proxy Statement

Dr. Andrey Semechkin, Chief Executive Officer and Co-Chairman of the Board of Directors
Dr. Russell Kern, Executive Vice President and Chief Scientific Officer and a director
Sophia Garnette, Vice President, Legal Affairs & Operations and Principal Financial Officer

It appears that ISCO has had 3 different CFO’s in the last 5 years, not a good sign

An acting CFO, Jennifer Stephens, resigned abruptly in March 2018 and has been replaced currently by VP Legal Affairs of ISCO, Sophia Garnette as the Principal Financial Officer.
https://www.sec.gov/Archives/edgar/data/1355790/000156459018002639/isco-8k_20180213.htm


Russell Kern is the son of Andrey Semechkin and officially changed his name to the current name in September 2015:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=140627695&txt2find=isco


and Sophia Garnette was formerly Sofya Bakalova


here are the backgrounds of these 3 officers:

https://www.sec.gov/Archives/edgar/data/1355790/000156459018007802/isco-10k_20171231.htm#Item10_DIRECTORS_EXECUTIVE_OFFICERS

Andrey Semechkin, Ph.D., Co-Chairman and CEO, has been a Director of the Company since December 2008. Dr. Semechkin has served as our Chief Executive Officer since November 2009, and from December 2008 to November 2009 he served in other senior management positions with the Company. Dr. Semechkin is a specialist in system analysis, strategic planning and corporate management. He is a member of the Russian Academy of Sciences and has been Deputy Director of Institute of System Analysis since 2004. 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.

Further research shows that Andrey Semechkin previously was on the board of the Russian Government owned Russian National Railway company before it was privatized.


Russell Kern, Ph.D, Executive Vice President and Chief Scientific Officer, became a Director in October 2008. Dr. Kern has served as our Chief Scientific officer since June 2013 and previously served since December 2008 in various scientific and management positions, including as Vice President Research and Development. Dr. Kern was trained in medical genetics, embryology and stem cell biology. He holds a Ph.D. degree in Human Physiology from the Russian Academy of Medical Sciences and has broad expertise in neuroscience, and was part of the team, along with scientists from the NYU Medical School that elucidated the physiological changes that occur in the brains of Parkinson’s disease patients. Dr. Kern directs ISCO’s R&D programs including stem cell derivation, differentiation and the pre-clinical and clinical evaluation of stem cell derived cells and tissue. He has developed a general method of deriving highly pure populations of neural stem cells and dopaminergic neurons from pluripotent stems cells that is novel, practical and suitable for use in a clinical setting. Dr. Kern is a well-known speaker on stem cell biology, including the use of stem cells for neurology and skin regeneration. He has more than 40 publications in the field of Parkinson’s disease and stem cell biology and he is an active member of the American Academy of Neurology and the Society for Neuroscience. Dr. Russell Kern is the son of Dr. Andrey Semechkin, our Co-Chairman and Chief Executive Officer..

Russel Kern appears to have obtained his PhD from the Russian Academy of Medical Sciences while he was working and living full-time for ISCO in California.


Sophia Garnette (formerly Sofya Bakalova), J.D., Vice President, Legal Affairs & Operations and Principal Financial Officer, received her law degree from the University of Miami School of Law and has experience in various aspects of corporate and biotechnology law, regulatory affairs, project management, and business operations. After joining the Company in March 2011, she has held a variety of business and legal roles, including in-house counsel, advisor to the CEO, and Vice Chairman of the Board of Directors for Lifeline Skin Care. Ms. Garnette holds a Bachelor’s degree in Economics from San Francisco State University and worked in the banking and finance industries prior to beginning her legal career.



4. Control of ISCO

Dr. Andrey Semechkin and his son and Dr. Russell Kern have gone from 0% beneficial ownership in ISCO in 2008 to over 80% currently

https://www.sec.gov/Archives/edgar/data/1355790/000156459019019386/isco-10q_20190331.htm

As of March 31, 2019, Dr. Andrey Semechkin, Chief Executive Officer and Co-Chairman of the Board of Directors, and Dr. Russell Kern, Executive Vice President and Chief Scientific Officer and a director, beneficially own approximately 80% of our outstanding shares of common stock, including shares issuable upon conversion of the outstanding shares of our Series D, Series G, and Series I-2 Preferred Stock and shares issuable upon exercise of options and warrants that they hold and that are exercisable within 60 days of March 31, 2019..


5. CEO Semechkin and his son CSO Kern have used many different spelling variations of first and last name in SEC filings from 2009 to 2018, which are official legal documents

Andrey Semechkin
Andrei Semechkin
Andrei Semetchkine

Russell Kern
Ruslan Semechkin
Rouslan Semechkin
Rouslan Semetchkine
Ruslan Semechkine



6. The changing appearances of ISCO CSO Russel Kern/Ruslan Semchkin through the years:

Notice that the Nov 8, 2016 picture using his original Russian name, Ruslan Semechkin, 14 months AFTER the alleged name change to Russell Kern


https://www.researchgate.net/profile/Ruslan_Semechkin

March 10, 2014
https://www.facebook.com/InternationalStemCellCorporation/photos/pb.172262287089.-2207520000.1450653306./10152294326682090/?type=3&theater

Nov 8, 2016:
https://www.ranchosantafereview.com/cm-cm-rowecap-12-20161108-photo.html


7. CEO Andrei Semechkin was living in $322,200 Condo in New Hampshire until he purchased for CASH of $7.35 million a 10,032 square foot home on 4.27 acres in wealthy town of Rancho Santa Fe, Calif on Feb 23, 2009, the year after he began his involvement with ISCO. Semechkin last appears to have owned the NH condo as of January 1, 2011.



8. CEO Semechkin and his son, CSO Kern, directly and through related entities, have funneled over $20 million of dollars into ISCO from 2008 to 2018 to increase their ownership up to the over 80% beneficial interest in the form of loans, common stock and preferred stock.

The more recent amounts for 2012 to 2018 totaling at least $16.8 million:


a) $4.7 million loaned/invested into ISCO by CEO Andrey Semechkin between January 12, 2017 and August 8, 2018.

https://www.sec.gov/Archives/edgar/data/1355790/000156459018021759/isco-10q_20180630.htm

b) $1.3 million from the ISCO CEO on Jan 12, 2017 and March 20, 2017:

https://www.sec.gov/Archives/edgar/data/1355790/000156459017007607/isco-def14a_20170531.htm#tx144565_12

c) $0.5 million from both ISCO CEO and his son Kern between Feb 23, 2015 and Nov 24, 2015:

https://www.sec.gov/Archives/edgar/data/1355790/000156459017007607/isco-def14a_20170531.htm#tx144565_12

d) $1.5 million from both the ISCO CEO and son Kern from June 29, 2016 to Dec 8, 2016:

https://www.sec.gov/Archives/edgar/data/1355790/000156459017007607/isco-def14a_20170531.htm#tx144565_12

e) $5.0 million invested into ISCO by affiliate of ISCO CEO and son Kern on March 9, 2012:

https://www.sec.gov/Archives/edgar/data/1355790/000156459016019502/isco-10q_20160331.htm


f) $3.8 million loan from ISCO CEO from May 6, 2015 and March 9, 2016





9. The Semechkin’s initial investment into ISCO was by an affiliate, X-Master, Inc., for $2.0 million on August 20, 2008, then $1.0 million each in 3 tranches on Dec 30, 2008, Feb 5, 2009 and March 16, 2009 for a total of $5.0 million. (note: the initial names used were spelled as Andrei Semetchkine and Rouslan Semetchkine)


From the ISCO Proxy Statement filed March 30, 2009:


https://www.sec.gov/Archives/edgar/data/1355790/000101968709001107/interstem_def14a-032709.htm

On August 20, 2008, to obtain funding for working capital, we entered into a subscription agreement with X-Master, Inc. a corporation controlled by two of our directors, to sell for three million dollars up to three million shares of Series C Preferred Stock at a price of $1.00 per share. A total of two million shares were sold.

On December 30, 2008, to obtain funding for both working capital and the eventual repayment of the outstanding obligation under an OID Senior Secured Convertible Note with a principal amount of $1,000,000 issued in May 2008, we entered into a Series D Preferred Stock Purchase Agreement (the “Series D Agreement”) with X-Master, Inc., Andrei Semetchkine and Rouslan Semetchkine to sell for up to five million dollars ($5,000,000) up to fifty shares of Series D Preferred Stock (“Series D Preferred”) at a price of $100,000 per Series D Preferred share. 10 shares were sold December 30, 2008; 10 shares were sold February 5, 2009; and 10 shares were sold on March 16, 2009.


10. X-Master, Inc. filed a form 13D with the SEC on January 9, 2009 for the first $3.0 million that was invested by X-Master, Inc. into ISCO on Aug 20, 2008, Sept 23, 2008 and Dec 30, 2008.


Here are the descriptions and backgrounds. Notice that X-Master is a New Hampshire corporation and that both Semechkins state that at that point in time they were citizens of Russia:

https://www.sec.gov/Archives/edgar/data/1355790/000101968709000132/internationalstem_13d-123008.htm

This statement is filed on behalf of X-Master, Inc., ("X-Master"), Andrei Semechkin ("A. Semechkin") and Rouslan Semechkin ("R. Semechkin") (each, a "Reporting Person" and collectively, the "Reporting Persons").

X-Master is a New Hampshire corporation which holds real estate and other assets and investments. The principal business address of X-Master is 1 Overlook Drive, Unit 11, Amherst, New Hampshire 03031.

A. Semechkin’s business address is 1 Overlook Drive, Unit 11, Amherst, New Hampshire 03031. Mr. Semechkin is Director and sole shareholder of X-Master. Mr. Semechkin is also a Director and the Chief Business Officer of the Issuer, which is an early-stage stem cell therapeutics company, with an address of 2595 Jason Court, Oceanside, CA 92056. Mr. Semechkin is the father of R. Semechkin. Mr. Semechkin is a citizen of Russia.

R. Semechkin’s business address is 1 Overlook Drive, Unit 11, Amherst, New Hampshire 03031. Mr. Semechkin is President of X-Master. Mr. Semechkin is also a Director and research scientist of the Issuer. Mr. Semechkin is the son of A. Semechkin. Mr. Semechkin is a citizen of Russia.



And here is the New Hampshire corporation entry for X-Master:

https://quickstart.sos.nh.gov/online/BusinessInquire/BusinessInformation?businessID=28364



11. In the same 13D that is discussed above, the following is what is stated as the source of funds for X-Master for the ISCO investment. It states that the source of funds is from “working capital of X-Master”

https://www.sec.gov/Archives/edgar/data/1355790/000101968709000132/internationalstem_13d-123008.htm

The source of funds for the acquisition of the 2,000,000 shares of Series C Preferred Stock on August 20, 2008 and September 23, 2008, for an aggregate purchase price of $2,000,000; and the acquisition of the 10 shares of Series D Preferred Stock on December 30, 2008 for $1,000,000, was from the working capital of X-Master.


12. The form 13D discussed above was amended and filed with the SEC on March 17, 2009. The main difference was that the true source of the funds from X-Master was stated, mainly a British Virgin Islands corporation by the name of Hartcom Impex, Ltd.


https://www.sec.gov/Archives/edgar/data/1355790/000101968709000875/xmaster_13da2-issc.htm

The source of funds for the acquisition of the 2,000,000 shares of Series C Preferred Stock on August 20, 2008 and September 23, 2008, for an aggregate purchase price of $2,000,000; and the acquisition of the 10 shares of Series D Preferred Stock on December 30, 2008 for $1,000,000, was primarily from the proceeds of loans made to X-Master by Hartcom Impex, Ltd., a British Virgin Islands corporation (“Hartcom”), and from the working capital of X-Master. X-Master entered into loan agreements with Hartcom on February 22, 2008 for $1,400,000, July 28, 2008 for $700,000, and September 22, 2008 for $1,000,000. The loans provide that the proceeds may be used for general working capital purposes, or any other lawful purpose. The loans are for a term of seven (7) years and twenty (20) days from funding date and at a fixed interest rate of 4.8% per annum with principal and interest payable at maturity.



13. A search of Hartcom Impex, Ltd. in the Panama Papers website shows that it was incorporated in January 5, 2007 and that it lists Cascado AG, a Panama company, as its sole Officer, Director and Shareholder:


https://offshoreleaks.icij.org/nodes/207869


14. A search for Cascado AG results in:


a) A book (“The Almost Classified Guide to CIA Front Companies, Proprietaries & Contractors”
By Wayne Madsen) that states that Cascado AG is a CIA front. Based in Panama and involved in weapons smuggling to CIA-supported groups:

https://books.google.com/books?id=rdw9DwAAQBAJ&pg=PA99&lpg=PA99&dq=CASCADO+AG&source=bl&ots=UoD9qrcaIf&sig=UhaEy0Afvc-F0cf_IDX6pzfBT7I&hl=en&sa=X&ved=0ahUKEwip76mNrPfaAhVDw2MKHWk2BgE4ChDoAQhQMAc#v=onepage&q=CASCADO%20AG&f=false



b) Cascado AG, a shell company registered in Panama. Cascado AG has been associated with a number of scandals, including corrupt Ukrainian state procurement and export deals, and lower-level import-export invoice fraud in Russia and other CIS countries. According to an investigation by the Organized Crime and Corruption Reporting Center and Novaya Gazeta, Cascado AG was also involved in the case of the merchant vessel MV Faina. The ship, sailing under Belizean flag was captured by Somali pirates in 2008, coming from Odessa, with 33 Soviet-made T-72 tanks, grenade launchers and small arms on board, reportedly destined to reach South Sudan, which at the time was under an EU arms embargo.

https://www.transparency.ge/en/blog/gncc-candidates-there-risk-conflict-interests


c) Cascado AG is a Panamanian company controlled by a Latvian Erik Vanagels, that has been allegedly used for arms dealing and money laundering, much out of Eastern Europe:

http://www.intellinews.com/massive-ukrainian-government-money-laundering-system-surfaces-500012901/?archive=bne

https://economiccrimeintelligence.wordpress.com/2012/02/23/erik-vanagels-trademark-the-extent-of-a-money-laundering-supermarket/

https://www.occrp.org/en/daily/8523-buzzfeed-uk-companies-still-being-used-for-money-laundering

https://www.slideshare.net/TransparINT/shell-company-presentation-erik-vanagels-case-study

http://www.duncancampbell.org/content/boozy-latvian-%E2%80%98billionaire%E2%80%99-smokescreen-fraud

https://www.irishtimes.com/business/financial-services/latvian-pair-behind-firm-named-over-quinn-payments-1.1735619

https://www.baltictimes.com/news/articles/33495/

https://www.theguardian.com/us-news/2016/aug/16/donald-trump-campaign-paul-manafort-ukraine-yanukovich

https://www.reportingproject.net/proxy/en/the-latvian-proxies