Item 1.01 Entry into a Material Definitive Agreement

On October 26, 2021, International Stem Cell Corporation (the "Company") and S Real Estate Holdings, LLC ("Co-Tenant") entered into a lease agreement (the "Lease") with Rehco Holdings (the "Landlord") for the purpose of establishing the Company's new corporate headquarters at 9745 Businesspark Ave, San Diego, CA (the "Premises"). The Premises will consolidate the Company's Carlsbad and Oceanside offices, combining corporate, R&D, and manufacturing operations.

The lease covers approximately 7,260 square feet, which will be shared with the Co-Tenant and its affiliated entities. 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 term will begin on November 1, 2021 ("Commencement Date") and will continue for five years and two months, through December 31, 2026. The Company and the Co-Tenant will begin paying rent at the Commencement Date, at an initial combined rate of $10,890 per month ("Base Rent"). The monthly Base Rent will increase in accordance with the schedule set forth in the Lease, up to $12,933.90 at the conclusion of the lease.

Throughout the term of the Lease, the Company and the Co-Tenant are responsible for paying certain costs and expenses in addition to Base Rent, as specified in the Lease, including insurance, maintenance costs, taxes, and operating expenses. The Lease includes various covenants, indemnities, defaults, termination rights, and other provisions customary for lease transactions of this nature.

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