PALO ALTO, Calif., July 1, 2011 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM) today announced that it will effect a one-for-ten reverse stock split at 12:01am on July 6, 2011. The Company anticipates that its common stock will begin trading on a split adjusted basis on The NASDAQ Global Market at the opening of trading on July 6, 2011.
"In deciding to proceed with the reverse stock split, our Board of Directors considered several factors, including the NASDAQ continued listing requirements, the historical trading price, volatility and volume of our common stock, and current market and economic conditions," said Martin McGlynn, President and CEO of StemCells, Inc. "While the reverse stock split does not change the intrinsic value of the Company, the split should broaden the Company's appeal to investors, especially institutional investors favoring stocks trading above a $1.00 a share, and help attract long-term owners whose primary desire is to prosper as the Company advances its clinical and commercial programs. At the Company's Annual Stockholder Meeting held yesterday, stockholders approved the reverse stock split by an affirmative vote of more than 80% of the votes cast and we are thankful for the support of our stockholders."
Upon the effectiveness of the reverse stock split, each ten shares of the Company's issued and outstanding common stock will be automatically converted into one issued and outstanding share of Company common stock. The reverse stock split will affect all issued and outstanding shares of the Company's common stock, as well as common stock underlying stock options, warrants and other common stock based equity grants outstanding immediately prior to the effectiveness of the reverse stock split. Each stockholder's new share count will be rounded up to the nearest whole share if the number of shares is not evenly divisible by the ratio of the reverse stock split. There will be no cash or fractional shares issued as part of the Company's reverse stock split. The reverse stock split will not affect any stockholder's ownership percentage of the Company's common stock, except to the limited extent that the reverse stock split would result in any fractional shares being rounded up.
The reverse stock split will reduce the number of shares outstanding from approximately 137 million to approximately 13.7 million. Concurrent with the reverse stock split, the Company will reduce its authorized number of common shares to 75 million. The number of shares available under the Company's equity-based plans will also be proportionately reduced.
The Company's trading symbol of "STEM" will not change as a result of the reverse stock split, although it is expected that NASDAQ will append a "D" to the Company's ticker symbol for approximately 20 trading days following the effective date to indicate the completion of the reserve stock split. In addition, the common stock will trade under a new CUSIP number, 85857R204, effective as of July 6, 2011.
The Company has chosen its transfer agent, Computershare, to act as exchange agent for the reverse stock split. Stockholders holding certificated shares or shares through a brokerage account will have their shares automatically adjusted to reflect the reverse stock split as of the effective date. The issuance of new stock certificates will not be required, however stockholders may obtain a new certificate from the Company's transfer agent.
About StemCells, Inc.
StemCells, Inc. is engaged in the research, development, and commercialization of cell-based therapeutics and tools for use in stem cell-based research and drug discovery. The Company's lead therapeutic product candidate, HuCNS-SC® cells (purified human neural stem cells), is currently in development as a potential treatment for a broad range of central nervous system disorders. Clinical trials are currently underway in spinal cord injury and in Pelizaeus-Merzbacher disease (PMD), a fatal myelination disorder in children. In addition, the Company plans to file an IND by year-end 2011 to initiate a clinical trial of HuCNS-SC cells in a retinal disorder, such as age-related macular degeneration, and is also pursuing preclinical studies of its HuCNS-SC cells in Alzheimer's disease and stroke. StemCells also markets stem cell research products, including media and reagents, under the SC Proven®brand, and is developing stem cell-based assay platforms for use in pharmaceutical research, drug discovery and drug development. Further information about StemCells is available at http://www.stemcellsinc.com.
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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") and the timing and effect of the anticipated reverse stock split and whether it will attract additional investors. 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 regulatory and clinical uncertainties; uncertainties with respect to the Company's ability to obtain the increased capital resources needed to continue its current and planned research and development operations, including such operations of the Company for non-therapeutic applications, and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; 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, 2010 and in its subsequent reports on Form 10-Q and Form 8-K.