FINANCIAL ADVISORY AGREEMENT

FINANCIAL ADVISORY AGREEMENT

THIS FINANCIAL ADVISORY AGREEMENT (“Agreement” or “FAA”) is made and entered into on this the 18th day of October, 2006, by and between Halter Financial Group, L.P., a Texas limited partnership (“HFG”), and International Stem Cell Corporation, a California corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, the Company desires to engage HFG to provide certain financial advisory and consulting services as specifically enumerated below commencing as of the date hereof related to the Going Public Transaction and the Post-Transaction Period (each as hereinafter defined), and HFG is willing to be so engaged.

NOW, THEREFORE, for and in consideration of the covenants set forth herein and the mutual benefits to be gained by the parties hereto, and other good and valuable consideration, the receipt and adequacy of which are now and forever acknowledged and confessed, the parties hereto hereby agree and intend to be legally bound as follows:

1. Retention. As of the date hereof, the Company hereby retains and HFG hereby agrees to be retained as the Company’s financial advisor during the term of this Agreement. The Company acknowledges that HFG shall have the right to engage third parties to assist it in its efforts to satisfy its obligations hereunder. In its capacity as a financial advisor to the Company, HFG will:

A. Going Public Transaction.

Assist the Company in evaluating the manner of effecting a going public transaction with a public shell corporation (“Pubco”) domiciled in the United States of America and quoted on the “OTC BB” (a “Going Public Transaction”). It is anticipated that (a) upon consummation of the Going Public Transaction, (b) the closing of the Company’s current private placement of securities (the “Company Offering”) and (c) the closing of the private placement of Pubco (the “Pubco Offering”) contemplated to be undertaken immediately upon the closing of the Going Public Transaction, which together with the Company Offering will generate estimated gross offering proceeds of $10,000,000, the Company’s current stockholders, investors in the Company Offering and the Pubco Offering, respectively, will hold 93.5% of all the issued and outstanding shares of Pubco’s common capital stock.

Specifically, ownership by the former shareholders of Pubco following the Going Public Transaction and the Pubco offering shall therefore consist of 2,210,000 shares of common stock. Ownership of the balance of Pubco common stock shall be held as follows: approximately 21,790,000 shares of common stock will be held by the Company’s shareholders immediately prior to such transactions, and an estimated 10,000,000 shares will be issued to investors in the Pubco Offering, a total of approximately 34,000,000 shares. In order to permit the completion of share splits or

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other capital structure adjustments to Pubco that may be required prior to closing, no adjustment in the shares to be held by the initial Pubco shareholders shall be made for the possible oversubscription or undersubscription of the Pubco Offering by Brookstreet Securities, the Company’s placement agent.

B. Post Transaction Period

Upon consummation of the Going Public Transaction, HFG agrees to: