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StemCells, Inc. Announces Closing of $8 Million Public Offering

NEWARK, Calif., March 14, 2016 (GLOBE NEWSWIRE) -- StemCells, Inc. (NASDAQ:STEM) today announced that it has closed its previously announced offering of common stock and warrants. The Company sold a total of 26,667,000 shares of common stock, Series A warrants to purchase up to 13,333,500 shares of the Company’s common stock, and Series B warrants to purchase up to 20,000,250 shares of the Company’s common stock, at a public offering price of approximately $8 million. In addition, pursuant to the underwriters’ over-allotment option, the Company issued additional Series A warrants to purchase up to an additional 1,997,665 shares of common stock and additional Series B warrants to purchase up to an additional 2,996,497 shares of common stock. The Company received total proceeds, net of offering expenses, underwriting discounts and commissions, of approximately $7.4 million. The Series A warrants have an initial exercise price of $0.30 per share, are exercisable immediately, and will expire two years from the date of issuance. The Series B warrants have an initial exercise price of $0.42 per share, are exercisable 12 months from the date of issuance, provided that the Company has sufficient authorized capital to allow all of the Series B Warrants to be exercised in full by the holders, and will expire on the fifth anniversary of the date they become exercisable. The Company plans to file a registration statement to cover the common stock underlying the Series B warrants upon the 12-month anniversary of the issuance of the Series B warrants. If the warrants are exercised in full, StemCells, Inc. will receive additional proceeds of approximately $14.3 million.

"Despite extremely challenging capital markets, we were very pleased to have raised this necessary capital to continue to move our Phase II Pathway™ Study forward for cervical spinal cord injury,” said Ian Massey Chief Executive Officer of StemCells, Inc. “We remain very excited by the early data we’ve seen in our spinal cord injury program and are focusing all of our efforts to complete enrollment in our ongoing Phase II study in cervical spinal cord injury (Pathway) this year with final results available next year. Positive efficacy data from the Pathway study will be truly transformative for the Company.”

Greg Schiffman, Chief Financial Officer of StemCells, Inc. said, "This transaction was structured to include short-term warrants, which provide the potential for the Company to receive approximately $4 million in additional capital over the next two years. This is a critical timeframe for the Company as we expect to have final results from our ongoing Pathway study in the fourth quarter of 2017. The Company is also actively pursuing non-dilutive sources of capital, which if successful, will allow us to place less reliance on the equity markets to provide the cash required to complete this Phase II program."

Maxim Group LLC is acting as sole book-running manager and Chardan Capital Markets is acting as co-manager for the offering.  Ascendiant Capital Markets, LLC is acting as financial advisor to the Company. 

About StemCells, Inc.

StemCells, Inc. is currently engaged in clinical development of its HuCNS-SC® platform technology (purified human neural stem cells) as a potential treatment for chronic spinal cord injury (SCI). The Company's Pathway Study, a Phase II proof-of-concept trial in cervical SCI is actively enrolling at twelve sites. Six-month interim data for the first cohort of the Pathway Study showed the first-ever clinical evidence of a treatment effect improving both muscle strength and motor function following cellular transplant in spinal cord injury. Top-line data from the Company's Phase I/II clinical trial in in chronic thoracic spinal cord injury showed measureable gains involving multiple sensory modalities and segments in 7 of 12 patients enrolled in the study, including the conversion of two patients from the complete AIS A injury to the incomplete AIS B injury post-transplant. The Company has also completed its Phase I/II clinical trial in geographic atrophy dry age related macular degeneration. Top-line results from this study show a positive safety profile and favorable preliminary efficacy data. In a Phase I clinical trial in Pelizaeus-Merzbacher disease (PMD), a fatal myelination disorder in children, the Company showed preliminary evidence of progressive and durable donor-derived myelination by MRI. A Phase 1 study in children with Batten disease showed that transplantation of the cells into the brain was safe and resulted in long term survival of the cells.

Further information about StemCells, Inc. is available at

Apart from statements of historical fact, the text of this press release constitutes forward-looking statements within the meaning of the U.S. securities laws, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding the future business operations of StemCells, Inc. (the "Company"), the prospect for continued clinical development of the Company's HuCNS-SC cells in CNS disorders, the timing of final data release in the Company’s Pathway Study in cervical spinal cord injury, and the expected use of funds raised in the Company’s completed public offering. These forward-looking statements speak only as of the date of this news release. The Company does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in such forward-looking statements due to risks and uncertainties to which the Company is subject, including risks whether the FDA or other applicable regulatory agencies, including applicable institutional review boards at one or more clinical trial sites, will permit the Company to continue clinical testing or conduct future clinical trials; uncertainties regarding the timing of patient enrollment in the Company’s Pathway Study; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current and planned research and development operations; uncertainty as to whether HuCNS-SC cells and any products that may be generated in the future in the Company's cell-based programs will prove safe and clinically effective and not cause tumors or other adverse side effects; uncertainties regarding the Company's manufacturing capabilities given its increasing preclinical and clinical commitments; uncertainties regarding the Company’s plans to increase its authorized share capital and whether the Company’s Series B warrants will become exercisable; uncertainties regarding the validity and enforceability of the Company's patents; uncertainties as to whether the Company will become profitable; and other factors that are described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Greg Schiffman
StemCells, Inc.
Executive Vice President and Chief Financial Officer
(510) 456-4128

Lena Evans
Russo Partners
(212) 845-4262

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StemCells, Inc.