StemCells, Inc. Announces Closing of $20 Million Offering

StemCells, Inc. Announces Closing of $20 Million Offering

NEWARK, Calif., July 18, 2014 (GLOBE NEWSWIRE) -- StemCells, Inc.
(Nasdaq:STEM), today announced that it has closed its previously announced
offering of common stock and short term warrants. The Company sold a total of
11,299,435 units to two well recognized institutional biotechnology investors
and received total proceeds, net of offering expenses and placement agent
fees, of approximately $18.7 million. Each unit consists of one share of
common stock and a warrant to purchase 0.85 of a share of common stock at a
price of $1.77 per unit. The warrants will first be exercisable six months
from the date of issuance at an initial exercise price of $2.17 per share. The
warrants will expire at the close of business on August 17, 2015.

"Two sophisticated investors approached us to provide $20 million of capital
based upon the strength of our interim clinical data, and our ongoing
translation agenda," said Greg Schiffman, chief financial officer of
StemCells, Inc. "Moreover, this transaction was structured with a short term
warrant which provides the investors with the potential to provide
approximately $20 million in additional capital next year. The proceeds from
this financing, combined with the funds from the warrants, should they be
exercised, would provide sufficient capital to finance our projected 2015
operating expenditures, by which time we expect to have final data from our
Phase I/II clinical programs in spinal cord injury and dry age related macular
degeneration and should have initiated controlled proof of concept Phase II
clinical programs in both of these indications."

Ascendiant Capital Markets, LLC acted as financial advisor and placement agent
for the offering.

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. In
a PhaseI clinical trial in Pelizaeus-Merzbacher disease (PMD), a fatal
myelination disorder in children, the Company has shown preliminary evidence
of progressive and durable donor-derived myelination in all four patients
transplanted with HuCNS-SC cells.The Company conducted a Phase I/II clinical
trial in chronic spinal cord injury in Switzerland, Canada and the United
States, and has reported positive interim data for the first eight
patients.The Company is also conducting a Phase I/II clinical trial in dry
age-related macular degeneration (AMD) in the United States. In addition, the
Company is pursuing preclinical studies in Alzheimer's disease, with support
from the California Institute for Regenerative Medicine (CIRM).StemCells
also markets stem cell research products, including media and reagents, under
the SC Proven^® brand.Further information about StemCells 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 Company's expected
use of net proceeds; the sufficiency of the proceeds from the offering
together with proceeds from the exercise of the warrants, if any, to fund 2015
operating expenditures; and the prospect for continued clinical development of
the Company's HuCNS-SC cells in CNS disorders including the prospect of
initiating Phase II clinical studies in dry age related macular degeneration
and spinal cord injury.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 the fact that additional trials will be required
to demonstrate the safety and efficacy of the Company's HuCNS-SC cells for the
treatment of any disease or disorder; uncertainty as to whether the FDA or
other applicable regulatory agencies or review boards will permit the Company
to continue clinical testing in AMD or spinal cord injury; uncertainties
regarding the timing and duration of any clinical trials; uncertainties
regarding the Company's ability to recruit the patients required to conduct
its clinical trials or to obtain meaningful results; uncertainties regarding
the Company's ability to obtain the increased capital resources needed to
continue its current and planned research and development operations;
uncertainties regarding the Company's manufacturing capabilities given its
increasing preclinical and clinical commitments; 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 ability to commercialize a therapeutic product and its ability to
successfully compete with other products on the market; 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, 2013, and in its subsequent
reports on Form 10-Q and Form 8-K.

CONTACT: Greg Schiffman
         StemCells, Inc.
         Chief Financial Officer
         (510) 456-4128
         Andrea Flynn
         Russo Partners
         (646) 942-5631

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