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Thread: StemCells to Raise $6.5 Million in a Private Placement/StemCells Reports Financial Results for First Quarter of 2003

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    Senior Member Max's Avatar
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    StemCells to Raise $6.5 Million in a Private Placement/StemCells Reports Financial Results for First Quarter of 2003

    StemCells to Raise $6.5 Million in a Private Placement

    Business Editors/Health/Medical Writers

    PALO ALTO, Calif.--(BUSINESS WIRE)--May 13, 2003--StemCells, Inc. (Nasdaq:STEM) has entered into an agreement, subject to regulatory approval, providing for the sale of four million shares of its common stock at $1.625 per share to The Riverview Group, LLC, a New York based private equity investment firm, for total proceeds of $6.5 million. The agreement also provides for issuance of a warrant for an additional 1.898 million shares exercisable at $1.50 per share. The agreement is subject to normal closing conditions. Proceeds of the sale of the units will be used by StemCells for general corporate purposes.
    Riverview had previously purchased $5 million face value of StemCells' 3% Convertible Preferred redeemable stock. To date, Riverview has converted $3 million of its initial purchase, and as a result, still holds $2 million in the 3% Convertible Preferred redeemable stock.
    "Current market conditions remain difficult for small cap, early stage biotechnology companies, so we are particularly gratified by Riverview's continued support for the Company. The market for our stock has responded favorably to our recently published study results. This investment provides us with the ability to follow up on those results without loss of momentum," said Martin McGlynn, President and CEO of StemCells.
    StemCells recently reported on preclinical studies in spinal cord injury and Batten Disease, the results in both cases establishing proof of principle of the potential for use of its patented human central nervous system stem cells in treating the conditions. Press releases describing the studies can be found on the Company's web site, at www.stemcellsinc.com. About StemCells, Inc.

    StemCells, Inc., is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the nervous system, liver, and pancreas. The Company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. Further information about the Company is available on its web site www.stemcellsinc.com. Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). The forward-looking statements speak only as of the date of this news release. StemCells 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 the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company's ability to obtain the capital resources needed to continue its current research and development operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical stage and has not yet led to the development of any proposed product; the uncertainty whether the Company will achieve revenues from product sales or become profitable; uncertainties regarding the Company's obligations in regard to its former encapsulated cell therapy facilities in Rhode Island; and other factors that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward-Looking Statements."


    --30--BRM/se*

    CONTACT: StemCells, Inc.
    Martin McGlynn, 650/475-3100, ext 108
    or
    The Investor Relations Group
    Media / Investor Relations
    Janet Vasquez / Jane Lin
    212/825-3210

    KEYWORD: CALIFORNIA
    INDUSTRY KEYWORD: MEDICAL PHARMACEUTICAL BIOTECHNOLOGY
    SOURCE: StemCells, Inc.


    http://www.businesswire.com/cgi-bin/...m&footer_file=

    [This message was edited by Max on 05-16-03 at 03:59 PM.]

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    Senior Member Max's Avatar
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    StemCells Reports Financial Results for First Quarter of 2003

    StemCells Reports Financial Results for First Quarter of 2003
    Friday May 16, 8:00 am ET


    PALO ALTO, Calif., May 16 /PRNewswire-FirstCall/ -- StemCells, Inc. (Nasdaq: STEM - News) today reported its financial results for the first quarter ended March 31, 2003.
    StemCells' net loss applicable to common shareholders was $2.7 million, or $0.10 per share, for the first quarter of 2003, compared to a net loss of $3.1 million, or $0.13 per share, for the same period in 2002. Cash and cash equivalents were $1.5 million as of March 31, 2003. The Company has since raised over $6.8 million. $6.5 million resulted from the purchase of 4,000,000 shares of common stock by The Riverview Group LLC as announced on May 13th; that transaction closed on Thursday, May 15th. Another $365,000 was received on May 12th as the proceeds of a draw on the Company's equity line.

    The decrease in net loss from 2002 to 2003 was primarily attributable to a reduction in rent expense as a result of an amendment to the lease on the Company's Palo Alto facility and the result of a cost reduction program initiated in September 2002.

    Martin McGlynn, President & CEO said, "We are pleased to have decreased our overall spending from prior periods as we continue to make progress toward developing new stem cell-based therapies to bring to patients. The $6.5 million funding announced on Tuesday of this week has greatly improved our financial situation. However, I think it is important to recognize that despite working under severe financial constraints, we have achieved some extremely significant milestones and are making good progress towards our goal of identifying disease targets for our stem cell technology. In the past several months we have announced the issuance of four important patents, the success of two preclinical studies using our human neural stem cells in Batten Disease and in spinal cord injury, and the potential for using our method for isolating precursors to insulin-producing cells in a novel treatment for diabetes."

    The four new U.S. patents of which StemCells is the grantee or exclusive licensee, include three for neural stem cells and one for pancreatic progenitor cells. These patents cover:

    -- Transplantation of neural stem cells and progeny cells into the central
    nervous system and peripheral nervous system, including the spinal cord
    -- Drug screening using human neural stem cell cultures
    -- Methods of producing a cell population enriched for neural stem cells
    that can initiate neurospheres
    -- Methods for isolating pancreatic progenitor cells that give rise to
    insulin producing cells


    About StemCells Inc.

    StemCells, Inc is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of the nervous system, liver, and pancreas. The Company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. Further information about the Company is available on its web site at www.stemcellsinc.com.
    Apart from statements of historical facts, the text of this press release constitutes forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). The forward-looking statements speak only as of the date of this news release. StemCells 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 the forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company's ability to obtain the capital resources needed to continue its current research and development operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical stage and has not yet led to the development of any proposed product; the uncertainty whether the Company will achieve revenues from product sales or become profitable; uncertainties regarding the Company's obligations in regard to its former encapsulated cell therapy facilities in Rhode Island; and other factors that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward-Looking Statements."

    StemCells Inc.
    Condensed Consolidated Statement of Operations
    (in thousands, except share and per share amounts)
    (unaudited)

    Three months ended
    March 31,
    2003 2002
    Revenue from grants and licensing agreements $59 $111
    Operating expenses
    Research & development 1,339 1,537
    General & administrative 1,069 1,339
    Total operating expenses 2,408 2,876
    Loss from operations (2,349) (2,765)
    Other income (expense) (60) (45)
    Net loss (2,409) (2,810)
    Deemed dividends to preferred shareholders (320) (320)
    Net loss applicable to common shareholders $(2,729) $(3,130)
    Basic and diluted earnings per share:
    Net loss per share applicable to common
    Shareholders, basic and diluted $(0.10) $(0.13)
    Weighted average common shares 26,943,019 24,220,952


    StemCells, Inc.

    Condensed Consolidated Balance Sheets

    March 31, December 31,
    2003 2002
    (in thousands) (unaudited) (A)

    Current assets
    Cash & cash equivalents $1,549 $4,236
    Other current assets 401 274
    Total current assets 1,950 4,510

    Property, plant & equipment, net 4,183 4,338
    Other assets, net 2,959 2,481
    Total assets 9,092 11,329

    Liabilities and stockholders equity
    Current liabilities 1,117 999
    Non-current liabilities 3,788 3,882
    Convertible preferred stock 2,979 2,660
    Stockholders' equity 1,208 3,788
    Total liabilities, redeemable preferred stock
    and stockholders' equity $9,092 $11,329

    (A) Derived from audited financial statements included in StemCells'
    annual report on form 10-K filed with the SEC.



    CONTACT: Martin McGlynn, President & CEO of StemCells, Inc., +1-650-475-3100, ext 108; or media and investors, Janet Vasquez or Jane Lin of The Investor Relations Group, +1-212-825-3210, for StemCells, Inc.



    --------------------------------------------------------------------------------
    Source: StemCells, Inc.

    http://biz.yahoo.com/prnews/030516/sff007_1.html

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