StemCells (STEM) Closes $20 Million Equity Financing

November 18, 2008 8:15 AM EST

StemCells (NASDAQ: STEM) announced that it has closed the sale of 13,793,104 units to certain institutional investors at a price of $1.45 per unit, for gross proceeds of $20.0 million. Each unit consists of one share of common stock and one five-year warrant to purchase 0.75 share of common stock at an exercise price of $2.30 per share. The units were sold in a registered direct offering under the Company's effective shelf registration statement previously filed with the Securities and Exchange Commission (SEC). The Company received total proceeds, net of offering expenses and placement agency fees, of approximately $18.5 million. The proceeds will be used for general corporate purposes, including working capital, product development and capital expenditures, as well as for other strategic purposes. At September 30, 2008, the Company had cash, cash equivalents, and marketable debt securities of approximately $21.3 million, and together with the net proceeds of this offering, would have a pro forma cash balance of approximately $39.8 million.

"It is no secret that development-stage biotechnology companies like StemCells need to raise capital from time to time. The capital markets are extremely volatile and impossible to predict, so we are pleased to have strengthened our cash reserves in such turbulent times," said Martin McGlynn, President and Chief Executive Officer.

StemCells, Inc. is a clinical-stage biotechnology company focused on the discovery, development and commercialization of cell-based therapeutics to treat diseases of the central nervous system and liver.

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