AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 9, 2002
REGISTRATION NO. 333-75806
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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STEMCELLS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other Jurisdiction 2836 94-3078125
of Incorporation or (Primary Standard Industrial (I.R.S. Employer
Organization) Classification Code Number) Identification No.)
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3155 PORTER DRIVE
PALO ALTO, CA 94304
(650) 475-3100
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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IRIS BREST, ESQ.
STEMCELLS, INC.
3155 PORTER DRIVE
PALO ALTO, CA 94304
(650) 475-3100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
GEOFFREY B. DAVIS, ESQ.
Ropes & Gray
One International Place
Boston, Massachusetts 02110
(617) 951-7000
(617) 951-7050 (fax)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
Common Stock, par value $.01 per share...... 3,997,201 shares $3.65 $14,589,783 $ 3,487(2)
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, based on the average
of the high and low prices as reported on the Nasdaq National Market on
December 14, 2001.
(2) Paid as of December 21, 2001
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
STEMCELLS, INC.
3,997,201 SHARES OF COMMON STOCK
---------------
The selling stockholders listed on page 7 of this prospectus or in an
accompanying supplement to this prospectus are offering to sell up to 3,997,201
shares of our common stock.
Our common stock is listed on the Nasdaq National Market under the symbol
"STEM." The last reported sale price for our common stock on the Nasdaq National
Market on January 8, 2002 was $3.80 per share.
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THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY 10, 2002.
TABLE OF CONTENTS
PAGE
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Executive Office....................... 1
Risk Factors........................... 1
Use of Proceeds........................ 6
Selling Stockholders................... 7
Plan of Distribution................... 9
PAGE
--------
Legal Matters.......................... 10
Experts................................ 10
Where You Can Find More Information.... 10
Incorporation of Documents by
Reference............................ 10
i
EXECUTIVE OFFICE
Our principal executive office is located at 3155 Porter Drive, Palo Alto,
California 94304 and our telephone number is (650) 475-3100. We maintain a
website on the Internet at WWW.STEMCELLSINC.COM. Our website, and the
information contained therein, is not a part of this prospectus.
RISK FACTORS
THE OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER
THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE
MAKING AN INVESTMENT DECISION REGARDING STEMCELLS, INC. OUR BUSINESS, FINANCIAL
CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED IF ANY
OF THESE RISKS ACTUALLY OCCUR. CONSEQUENTIALLY, THE TRADING PRICE OF OUR COMMON
STOCK COULD DECLINE, RESULTING IN THE LOSS OF ALL OR PART OF YOUR INVESTMENT.
OUR TECHNOLOGY IS AT AN EARLY STAGE OF DISCOVERY AND DEVELOPMENT, AND WE MAY
FAIL TO DEVELOP ANY COMMERCIALLY ACCEPTABLE PRODUCTS.
Our stem cell technology is at the early pre-clinical stage for the brain
stem cell and at the discovery phase for the liver and pancreas stem cells and
has not yet led to the development of any product. We may fail to discover the
stem cells we are seeking, to develop any products, to obtain regulatory
approvals, to enter clinical trials, or to commercialize any products. Any
product using stem cell technology may fail to:
- survive and persist in the desired location;
- provide the intended therapeutic benefits;
- properly integrate into existing tissue in the desired manner; or
- achieve therapeutic benefits equal to or better than the standard of
treatment at the time of testing.
In addition, our products may cause undesirable side effects. Results of early
pre-clinical research may not be indicative of the results that will be obtained
in later stages of pre-clinical or clinical research. If regulatory authorities
do not approve our products, or if we fail to maintain regulatory compliance, we
would have limited ability to commercialize our products, and our business and
results of operations would be harmed. Furthermore, because stem cells are a new
form of therapy, the marketplace may not accept any products we may develop.
If we do succeed in developing products, we will face many potential
obstacles such as the need to obtain regulatory approvals, and to develop or
obtain manufacturing, marketing and distribution capabilities. In addition, we
will face substantial additional risks such as product liability.
WE HAVE PAYMENT OBLIGATIONS RESULTING FROM REAL PROPERTY OWNED OR LEASED BY
US IN RHODE ISLAND, WHICH DIVERTS FUNDING FROM OUR STEM CELL RESEARCH AND
DEVELOPMENT.
Prior to our reorganization in 1999 and the consolidation of our business in
California, we carried out our encapsulated cell therapy programs in Lincoln,
Rhode Island, where we also had our administrative offices. Although we have
vacated the Rhode Island facilities, we remain obligated to make lease payments
and payments for operating costs of approximately $1,200,000 per year for our
former science and administrative facility, which we have leased through June
30, 2013, and debt service payments and payments for operating costs of
approximately $1,000,000 per year for our former encapsulated cell therapy pilot
manufacturing facility, which we own. We have currently subleased a portion of
the science and administrative facility, but cannot be sure that we will be able
to do so for the entire duration of our obligation. We are seeking to sublease
the remaining portion of the science
1
and administrative facility. We have currently subleased the entire pilot
manufacturing facility, but may not be able to sublease or sell the facility in
the future once the current sublease agreements expire. These continuing costs
significantly reduce our cash resources and adversely affect our ability to fund
further development of our stem cell technology.
WE MAY NEED BUT FAIL TO OBTAIN PARTNERS TO SUPPORT OUR STEM CELL DEVELOPMENT
EFFORTS AND TO COMMERCIALIZE OUR TECHNOLOGY.
Equity and debt financings alone may not be sufficient to fund the cost of
developing our stem cell technologies, and we may need to rely on our ability to
reach partnering arrangements to provide financial support for our stem cell
discovery and development efforts. In addition, in order to successfully develop
and commercialize our technology, we may need to enter into a wide variety of
arrangements with corporate sponsors, pharmaceutical companies, universities,
research groups and others. While we have engaged, and expect to continue to
engage, in discussions regarding such arrangements, we have not reached any
agreement, and we may fail to obtain any such agreement on terms acceptable to
us. Even if we enter into these arrangements, we may not be able to satisfy our
obligations under them or renew or replace them after their original terms
expire. Furthermore, these arrangements may require us to grant certain rights
to third parties, including exclusive marketing rights to one or more products,
may require us to issue securities to our collaborators or may contain other
terms that are burdensome to us. If any of our collaborators terminates its
relationship with us or fails to perform its obligations in a timely manner, the
development or commercialization of our technology and potential products may be
adversely affected.
WE HAVE A HISTORY OF OPERATING LOSSES AND WE MAY FAIL TO OBTAIN REVENUES OR
BECOME PROFITABLE.
We expect to continue to incur substantial operating losses in the future in
order to conduct our research and development activities, and, if those
activities are successful, to fund clinical trials and other expenses. These
expenses include the cost of acquiring technology, product testing, acquiring
regulatory approvals, establishing production, marketing, sales and distribution
programs and administrative expenses. We have not earned any revenues from sales
of any product. All of our past revenues have been derived from, and any
revenues we may obtain for the foreseeable future are expected to be derived
from, cooperative agreements, research grants, investments and interest on
invested capital. We currently have no cooperative agreements and we have
received only two research grants for our stem cell technology, and we may not
obtain any such agreements or additional grants in the future or receive any
revenues from them.
IF WE ARE UNABLE TO PROTECT OUR PATENTS AND PROPRIETARY RIGHTS, OUR
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATION WILL BE HARMED.
We own or license a number of patents and pending patent applications
covering human nerve stem cell cultures, central nervous system stem cell
cultures, neuroblast cultures, peripheral nervous system stem cell cultures, and
an animal model for liver failure. Patent protection for products such as those
we propose to develop is highly uncertain and involves complex and continually
evolving factual and legal questions. The governmental authorities that consider
patent applications can deny or significantly reduce the patent coverage
requested in an application before or after issuing the patent. Consequently, we
do not know whether any of our pending applications will result in the issuance
of patents, or if any existing or future patents will provide sufficient
protection or significant commercial advantage or if others will circumvent
these patents. We cannot be certain that we were the first to make the
inventions covered by each of our pending patent applications or that we were
the first to file patent applications for such inventions because patent
applications are secret until patents are issued in the United States or until
the applications are published in foreign countries, and because publication of
discoveries in the scientific or patent literature often lags behind actual
discoveries. Patents may not
2
issue from our pending or future patent applications or, if issued, may not be
of commercial benefit to us, or may not afford us adequate protection from
competing products. In addition, third parties may challenge our patents or
governmental authorities may declare them invalid. In the event that a third
party has also filed a patent application relating to inventions claimed in our
patent applications, we may have to participate in proceedings to determine
priority of invention. This could result in substantial uncertainties and cost
for us, even if the eventual outcome is favorable to us, and the outcome might
not be favorable to us. Even if a patent issues, a court could decide that the
patent was issued invalidly.
Proprietary trade secrets and unpatented know-how are also important to our
research and development activities. We cannot be certain that others will not
independently develop the same or similar technologies on their own or gain
access to our trade secrets or disclose such technology, or that we will be able
to meaningfully protect our trade secrets and unpatented know-how and keep them
secret. We require our employees, consultants, and significant scientific
collaborators and sponsored researchers to execute confidentiality agreements
upon the commencement of an employment or consulting relationship with us. These
agreements may, however, fail to provide meaningful protection or adequate
remedies for us in the event of unauthorized use, transfer or disclosure of such
information or inventions.
IF OTHERS ARE FIRST TO DISCOVER AND PATENT THE STEM CELLS WE ARE SEEKING TO
DISCOVER, WE COULD BE BLOCKED FROM FURTHER WORK ON THOSE STEM CELLS.
Because the first person or entity to discover and obtain a valid patent to
a particular stem or progenitor cell may effectively block all others, it will
be important for us or our collaborators to be the first to discover any stem
cell that we are seeking to discover. Failure to be the first could prevent us
from commercializing all of our research and development affected by that
patent.
WE MAY BE UNABLE TO OBTAIN NECESSARY LICENSES TO THIRD PARTY PATENTS AND
OTHER RIGHTS.
A number of pharmaceutical, biotechnology and other companies, universities
and research institutions have filed patent applications or have received
patents relating to cell therapy, stem cells and other technologies potentially
relevant to or necessary for our expected products. We cannot predict which, if
any, of the applications will issue as patents. If third party patents or patent
applications contain claims infringed by our technology and these claims are
valid, we may be unable to obtain licenses to these patents at a reasonable
cost, if at all, and may also be unable to develop or obtain alternative
technology. If we are unable to obtain such licenses at a reasonable cost, our
business could be significantly harmed.
We have obtained rights from universities and research institutions to
technologies, processes and compounds that we believe may be important to the
development of our products. Licensors may cancel our licenses or convert them
to non-exclusive licenses if we fail to use the relevant technology or otherwise
breach these agreements. Loss of these licenses could expose us to the risks of
third party patents and/or technology. We can give no assurance that any of
these licenses will provide effective protection against our competitors.
WE COMPETE WITH COMPANIES THAT HAVE SIGNIFICANT ADVANTAGES OVER US.
The market for therapeutic products that address degenerative diseases is
large and competition is intense. We expect competition to increase. We believe
that our most significant competitors will be fully integrated pharmaceutical
companies and more established biotechnology companies, such as Biogen, Inc. and
Genzyme, an Elan Corporation. These companies already produce or are developing
treatments for degenerative diseases that are not stem cell-based, and they have
significantly greater capital resources and expertise in research and
development, manufacturing, testing, obtaining
3
regulatory approvals and marketing than we do. Many of these potential
competitors have significant products approved or in development that could be
competitive with our potential products, and also operate large, well-funded
research and development programs. In addition, we expect to compete with
smaller companies such as NeuralStem and Layton Bioscience and with universities
and other research institutions who are developing treatments for degenerative
diseases that are stem cell-based.
Our competitors may succeed in developing technologies and products that are
more effective than the ones we are developing, or that would render our
technology obsolete or non-competitive.
The relative speed with which we and our competitors can develop products,
complete the clinical testing and approval processes, and supply commercial
quantities of a product to market will affect our ability to gather market
acceptance and market share. With respect to clinical testing, competition may
delay progress by limiting the number of clinical investigators and patients
available to test our potential products.
DEVELOPMENT OF OUR TECHNOLOGY IS SUBJECT TO AND RESTRICTED BY EXTENSIVE
GOVERNMENT REGULATION.
Our research and development efforts, as well as any future clinical trials,
and the manufacturing and marketing of any products we may develop, will be
subject to and restricted by extensive regulation by governmental authorities in
the United States and other countries. The process of obtaining U.S. Food and
Drug Administration and other necessary regulatory approvals is lengthy,
expensive and uncertain. We or our collaborators may fail to obtain the
necessary approvals to commence or continue clinical testing or to manufacture
or market our potential products in reasonable time frames, if at all. In
addition, the U.S. Congress and other legislative bodies may enact regulatory
reforms or restrictions on the development of new therapies that could adversely
affect the regulatory environment in which we operate or the development of any
products we may develop.
We base our research and development on the use of human stem and progenitor
cells obtained from fetal tissue. The federal and state governments and other
jurisdictions impose restrictions on the use of fetal tissue. These restrictions
change from time to time and may become more onerous. Additionally, we may not
be able to identify or develop reliable sources for the cells necessary for our
potential products--that is, sources that follow all state and federal
guidelines for cell procurement. Further, we may not be able to obtain such
cells in the quantity or quality sufficient to satisfy the commercial
requirements of our potential products. As a result, we may be unable to develop
or produce our products in a profitable manner.
We may apply for status under the Orphan Drug Act for some of our therapies
to gain a seven year period of marketing exclusivity for those therapies. The
U.S. Congress in the past has considered, and in the future again may consider,
legislation that would restrict the extent and duration of the market
exclusivity of an orphan drug. If enacted, such legislation could prevent us
from obtaining some or all of the benefits of the existing statute even if we
were to apply for and be granted orphan drug status with respect to a potential
product.
WE DEPEND ON A LIMITED NUMBER OF KEY PERSONNEL.
We are highly dependent on the principal members of our management and
scientific staff and some of our outside consultants, including the members of
our scientific advisory board, our chief executive officer, our vice president
and the directors of our neural stem cell and liver stem cell programs. Although
we have entered into employment agreements with some of these individuals, they
may terminate their agreements at any time. We currently have outside
consultants and interim personnel, rather than permanent employees, in key
management and scientific positions. Loss of services of any of these
individuals could have a material adverse effect on our operations because these
individuals possess management experience or specialized scientific skills that
we do not otherwise have and that we may not be able to replace. In addition,
our operations are dependent upon
4
our ability to attract and retain additional qualified scientific and management
personnel. We may not be able to attract and retain the personnel we need on
acceptable terms given the competition for experienced personnel among
pharmaceutical, biotechnology and health care companies, universities and
research institutions. If we lose the services of these key personnel or are
unable to attract and retain additional qualified personnel, we may have to
delay, reduce or eliminate some or all of our research and development programs.
HEALTH CARE INSURERS AND OTHER ORGANIZATIONS MAY NOT PAY FOR OUR PRODUCTS OR
MAY IMPOSE LIMITS ON REIMBURSEMENTS.
In both domestic and foreign markets, sales of potential products are likely
to depend in part upon the availability and amounts of reimbursement from third
party health care payor organizations, including government agencies, private
health care insurers and other health care payors, such as health maintenance
organizations and self-insured employee plans. There is considerable pressure to
reduce the cost of therapeutic products, and government and other third party
payors are increasingly attempting to contain health care costs by limiting both
coverage and the level of reimbursement for new therapeutic products, and by
refusing, in some cases, to provide any coverage for uses of approved products
for disease indications for which the U.S. Food and Drug Administration has not
granted marketing approval. Significant uncertainty exists as to the
reimbursement status of newly approved health care products. We can give no
assurance that reimbursement will be provided by such payors at all or without
substantial delay, or, if such reimbursement is provided, that the approved
reimbursement amounts will be sufficient to enable us to sell products we
develop on a profitable basis. Changes in reimbursement policy could also
adversely affect the willingness of pharmaceutical companies to collaborate with
us on the development of our stem cell technology.
In certain foreign markets, pricing or profitability of prescription
pharmaceuticals is subject to government control. We also expect that there will
continue to be a number of federal and state proposals to implement government
control over health care costs. Efforts at health care reform are likely to
continue in future legislative sessions. We do not know what legislative
proposals federal or state governments will adopt or what actions federal, state
or private payers for health care goods and services may take in response to
health care reform proposals or legislation. We cannot predict the effect
government control and other health care reforms may have on our business.
WE HAVE LIMITED LIQUIDITY AND CAPITAL RESOURCES AND MAY NOT OBTAIN THE
SIGNIFICANT CAPITAL RESOURCES WE WILL NEED TO SUSTAIN OUR RESEARCH AND
DEVELOPMENT EFFORTS.
We have limited liquidity and capital resources and must obtain substantial
additional capital to support our research and development programs, for
acquisition of technology and intellectual property rights, and, to the extent
we decide to undertake these activities ourselves, for pre-clinical and clinical
testing of our anticipated products, pursuit of regulatory approvals,
establishment of production capabilities, establishment of marketing and sales
capabilities and distribution channels, and general administrative expenses. If
we do not obtain the necessary capital resources, we may have to delay, reduce
or eliminate some or all of our research and development programs or license our
technology or any potential products to third parties rather than
commercializing them ourselves.
If we are unable to draw down on our existing equity line or choose not to
do so, we intend to pursue our needed capital resources through equity and debt
financings, corporate alliances, grants and collaborative research arrangements.
We may fail to obtain the necessary capital resources from any such sources when
needed or on terms acceptable to us. Our ability to complete any such
arrangements successfully will depend upon market conditions and, more
specifically, on continued progress in our research and development efforts. We
are prohibited from entering into other stand-by equity based credit facilities
during the term of the common stock purchase agreement that governs our existing
equity line.
5
IF OUR COMMON STOCK PRICE DROPS SIGNIFICANTLY, WE MAY BE DELISTED FROM THE
NASDAQ NATIONAL MARKET, WHICH COULD ELIMINATE THE TRADING MARKET FOR OUR COMMON
STOCK.
Our common stock is quoted on the Nasdaq National Market. In order to
continue to be included in the Nasdaq National Market, a company must meet
Nasdaq's maintenance criteria. The maintenance criteria most applicable to us
requires a minimum bid price of $1.00 per share and $5,000,000 market value of
publicly held shares. Additionally, we must maintain either $10 million in
stockholders' equity or $4 million in net tangible assets. After November 1,
2002, the net tangible asset maintenance criterion will no longer apply and we
must satisfy the stockholders' equity maintenance criterion. Failure to meet
these maintenance criteria may result in the delisting of our common stock from
the Nasdaq National Market. If our common stock were delisted, in order to have
our common stock relisted on the Nasdaq National Market we would be required to
meet the criteria for initial listing, which are more stringent than the
maintenance criteria. Accordingly, we cannot assure you that if we were delisted
we would be able to have our common stock relisted on the Nasdaq National
Market.
If our common stock were delisted from the Nasdaq National Market, we would
not be able to draw down any additional funds on our existing equity line, and
we also may be required to pay damages to holders of our common stock under
agreements we previously entered into with them in connection with equity
financings. Finally, if our common stock were removed from listing on the Nasdaq
National Market, it might become more difficult for us to raise funds through
the sale of our common stock or securities convertible into our common stock.
USE OF PROCEEDS
We will not receive any of the proceeds from the resale of shares offered by
the selling stockholders under this prospectus.
6
SELLING STOCKHOLDERS
Riverview Group, L.L.C., a wholly owned subsidiary of Millennium Partners,
L.P., will be selling shares in this offering. On December 4, 2001, we issued
5,000 shares of 3% Cumulative Convertible Preferred Stock to Riverview Group.
This preferred stock is convertible into shares of our common stock at a
conversion price of $2.00 per share of common stock. The conversion price is
subject to adjustment for stock splits, dividends, distributions,
reclassifications and similar events. The conversion price may be below the
trading market price of the stock at the time of conversion. We also issued to
Riverview Group a warrant to purchase 350,877 shares of our common stock at a
price of $3.42 per share. The warrant expires on December 4, 2005. The final
closing price on the NASDAQ National Market of our common stock on December 4,
2001 was $2.90 per share. For accounting purposes, the value of the conversion
feature of the preferred stock and the warrant will be treated as a deemed
dividend to holders as of December 4, 2001, and we will reflect the deemed
dividend as an adjustment to net income (loss) applicable to common
stockholders. We entered into a registration rights agreement with Riverview
Group in which we agreed to register the resale of the shares of our common
stock issuable upon conversion of the preferred stock and exercise of the
warrant.
On December 4, 2001, we also entered into an agreement with Millennium under
which we issued 176,101 shares of our common stock as a final cashless exercise
of the two outstanding adjustable warrants that were previously issued to
Millennium. Immediately following delivery of these shares, any further right to
acquire common stock under these adjustable warrants was cancelled by the
agreement. The resale of those shares of common stock was registered pursuant to
an earlier registration statement and prospectus and those shares are not being
sold as part of this offering.
Cantor Fitzgerald & Co. will also be selling shares in this offering. On
December 4, 2001 we issued to Cantor Fitzgerald a warrant to purchase 146,199
shares of our common stock at a price of $3.42 per share. The warrant expires on
December 4, 2006. The warrant was issued as part of an agreement between Cantor
Fitzgerald and us pursuant to which they served as financial advisor to us in
connection with the transactions described above.
The following table shows information regarding the beneficial ownership of
our capital stock for the selling stockholders prior to and after this offering.
We have determined beneficial ownership in the table in accordance with the
rules of the Securities Exchange Commission as more specifically described in
the notes below. In computing the number of shares beneficially owned by the
selling stockholders, we have deemed to be outstanding shares of common stock
issuable under warrants held by the selling stockholders which are currently
exercisable or will become exercisable within 60 days of the date of this
prospectus. In addition, when calculating the number of shares beneficially
owned by Riverview Group, we have included shares of common stock issuable
following conversion of the 3% Cumulative Convertible Preferred Stock where such
conversion is currently permissible or will become permissible within 60 days of
the date of this prospectus. To our knowledge, the selling stockholders possess
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.
SHARES OF COMMON STOCK
BENEFICIALLY OWNED AFTER
SHARES OF COMMON STOCK NUMBER OF THIS OFFERING (5)
BENEFICIALLY OWNED SHARES OF -------------------------
BEFORE THIS OFFERING COMMON
---------------------- STOCK NUMBER OF
SELLING STOCKHOLDERS NUMBER OF SHARES OFFERED SHARES PERCENTAGE
------------------------------------------- ---------------------- --------- ----------- -----------
Riverview Group, L.L.C. (1)................ 2,863,835(3) 3,851,002(4) -- --
Cantor Fitzgerald
& Co. (2)................................ * 146,199 -- --
--------------------------
* Indicates beneficial ownership of less than 1% of the class.
7
(1) The address of Riverview Group, L.L.C. is 666 Fifth Avenue, New York, New
York 10103. Riverview Group is a wholly owned subsidiary of Millennium
Partners, L.P. We previously entered into agreements with Millennium
pursuant to which we issued common stock, callable warrants and adjustable
warrants. Those transactions are described in our annual report on
Form 10-K for the year ended December 31, 2000 and our quarterly report on
Form 10-Q for the quarter ended June 30, 2001.
(2) The address of Cantor Fitzgerald & Co. is 299 Park Avenue, 29th Floor, New
York, New York, 10171.
(3) Includes 350,877 shares of common stock issuable upon exercise of the
warrant issued to Riverview Group on December 4, 2001; plus 500,125 shares
of outstanding common stock issued upon conversion of 1,000 shares of 3%
Cumulative Convertible Preferred Stock on December 7, 2001; plus 2,012,833
shares of common stock issuable upon conversion of the 3% Cumulative
Convertible Preferred Stock. Millennium owns 882,728 shares of outstanding
common stock according to information provided to us by Millennium as of
December 19, 2001, and is the holder of three callable warrants exercisable
for at least 171,839 shares of common stock. In determining how many shares
of common stock are issuable upon conversion of the outstanding 3%
Cumulative Convertible Preferred Stock and upon exercise of all of the
outstanding warrants, we have not taken into consideration the application
of the 9.99% limitations contained in such securities, which prevents
Riverview Group and Millennium from exercising warrants or converting such
preferred stock if such exercise or conversion would result in Millennium
and/or Riverview Group having aggregate beneficial ownership in excess of
9.99%. Millennium and Riverview Group expressly disclaim beneficial
ownership of any number of shares exceeding 9.99% of the outstanding shares
of common stock for purposes of Rule 13d-3 of the Securities Exchange Act of
1934.
(4) Includes 2,012,833 shares of common stock issuable upon conversion of the 3%
Cumulative Convertible Preferred Stock; plus 500,125 shares of common stock
issued upon conversion of 1,000 shares of 3% Cumulative Convertible
Preferred Stock on December 7, 2001; plus 350,877 shares of common stock
issuable upon exercise of the warrant issued to Riverview Group on
December 4, 2001. The remaining 987,167 shares are included based on an
agreement between us and Riverview Group which requires us to register 150%
of the number of common shares issuable upon conversion of the Preferred
Stock at the current conversion price of $2.00.
(5) The table assumes that the selling stockholders sell all of the shares
offered by this prospectus.
8
PLAN OF DISTRIBUTION
We will not receive any of the proceeds from the sale by the selling
stockholders of the common stock offered hereby.
The shares of the common stock offered hereby may be sold from time to time
by the selling stockholders, or by pledgees, donees, transferees or other
successors in interest:
- to or through underwriters or dealers;
- directly to one or more other purchasers;
- through agents on a best-efforts basis;
- through a combination of any such methods of sale; or
- any other manner permitted by law.
Such sales may be made on one or more exchanges or in the over-the-counter
market, or otherwise at prices and at terms then prevailing or at prices related
to the then current market price, or in privately negotiated transactions. The
shares may be sold by one or more of the following:
- a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this prospectus;
- an exchange distribution in accordance with the rules of such exchange;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- privately negotiated transactions without a broker or dealer; and
- any other manner permitted by law.
In effecting sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from the selling stockholders in amounts to be
negotiated prior to the sale. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
of 1933 may be sold under Rule 144 rather than pursuant to this prospectus.
In addition, the selling stockholders may engage in short sales and other
transactions in the common stock or derivatives thereof, and may pledge, sell,
deliver or otherwise transfer the common stock offered under this prospectus in
connection with such transactions.
If we are notified by a selling stockholder that a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange distribution or secondary distribution, or a
purchase by a broker-dealer as a principal, a supplemental prospectus will be
filed listing:
- the name of each selling stockholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which such shares were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable; and
- other facts material to the transaction.
We have agreed to pay the cost of registering the shares covered by this
prospectus and the costs of preparing this prospectus and the registration
statement under which it is filed.
We and the selling stockholders have agreed to indemnify one another against
certain liabilities, including liabilities arising under the Securities Act.
9
LEGAL MATTERS
The validity of the shares of our common stock offered hereby will be passed
upon for us by Ropes & Gray, Boston, Massachusetts.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2000, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act with respect to the common stock to be sold in this offering.
This prospectus does not contain all the information included in the
registration statement and the related exhibits and schedules. You will find
additional information about us and our common stock in the registration
statement. The registration statement and the related exhibits and schedules may
be inspected and copied at the public reference facilities maintained by the SEC
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the public reference facilities of the SEC's Regional Offices: New York
Regional Office, Seven World Trade Center, Suite 1300, New York, New York 10048;
and Chicago Regional Office, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of this material may also be obtained from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates. You can obtain information on the operation of the public
reference facilities by calling 1-800-SEC-0330. The SEC also maintains a site on
the World Wide Web (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants, including
us, that file electronically with the SEC. Statements made in this prospectus
about legal documents may not necessarily be complete and you should read the
documents which are filed as exhibits or schedules to the registration statement
or otherwise filed with the SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file with
it, which means that we can disclose information important to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and information that we later file with the SEC
will automatically update and supersede this information. Accordingly, we
incorporate by reference the following documents we filed with the SEC pursuant
to Section 13 of the Securities Exchange Act of 1934:
- our Annual Report on Form 10-K for the year ended December 31, 2000 (filed
April 2, 2001, as amended April 30, 2001);
- our Quarterly Report on Form 10-Q for the quarters ended September 30,
2001 (filed November 7, 2001), June 30, 2001 (filed August 10, 2001) and
March 31, 2001 (filed May 9, 2001);
- our Proxy Statement for the Annual Meeting of Stockholders held on
May 31, 2001 (filed April 30, 2001);
- our Current Reports on Form 8-K dated May 8, 2001 (filed May 8, 2001),
May 14, 2001 (dated May 14, 2001) and December 4, 2001 (filed December 7,
2001);
10
- the description of our common stock contained in the registration
statement on Form 8-A filed with the SEC pursuant to Section 12 of the
Securities Exchange Act of 1934 and all amendments thereto and reports
filed for the purpose of updating such description; and
- all documents filed by us with the SEC pursuant to the Securities Exchange
Act of 1934 after the date of this prospectus and before the offering of
common stock is completed (other than portions of such documents described
in paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated
by the SEC).
These documents are or will be available for inspection or copying at the
locations identified above under the caption "Where You Can Find More
Information." We will provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of any and all of
the documents that have been incorporated by reference in this prospectus (other
than exhibits to those documents). You should direct requests for documents to:
StemCells, Inc.
3155 Porter Drive
Palo Alto, CA 94304
Attention: Investor Relations
Telephone number: (650) 475-3100
11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the securities being registered. All
amounts shown are estimates except the SEC registration fee.
SEC registration fee........................................ $ 3,487
Printing and engraving expenses............................. $ 2,000
Legal fees and expenses..................................... $ 5,000
Accounting fees and expenses................................ $10,000
Miscellaneous............................................... $ 2,000
-------
Total....................................................... $22,487
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, other than
an action by or in the right of the corporation, by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation or is
or was serving at the corporation's request as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with the action, suit or proceeding if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful. The power to indemnify applies to actions brought by or in the right
of the corporation as well, but only to the extent of expenses, including
attorneys' fees but excluding judgments, fines and amounts paid in settlement,
actually and reasonably incurred by the person in connection with the defense or
settlement of the action or suit and with the further limitation that in these
actions no indemnification shall be made in the event of any adjudication of
negligence or misconduct in the performance of his duties to the corporation,
unless a court believes that in light of all the circumstances indemnification
should apply.
Section Ten of our Restated Certificate of Incorporation provides that we
shall, to the maximum extent legally permitted, indemnify and upon request
advance expenses to each person who is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit proceeding, or
claim (civil, criminal, administrative or investigative) by reason of the fact
that he is or was, or has agreed to become, a director or officer of the
Company, or is or was serving, or has agreed to serve, at the request of the
Company, as a director, officer, partner, employee, agent or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprises, provided, however, that the Company is not required to
indemnify or advance expenses to any person in connection with any action, suit,
proceeding, claim or counterclaim initiated by or on behalf of such person. The
indemnification provided for in Section Ten is expressly not exclusive of any
other rights to which those seeking indemnification may be entitled under any
by-law, agreement or vote of directors or stockholders or otherwise, and shall
inure to the benefit of the heirs and legal representatives of such persons.
Section 145(g) of the Delaware General Corporation Law provides that the
Company shall have the power to purchase and maintain insurance on behalf of its
officers, directors, employees and agents, against any liability asserted
against and incurred by such persons in any such capacity.
II-1
We have obtained insurance covering our directors and officers against
certain liabilities.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a corporation may eliminate or limit the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provisions shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. No such provision shall eliminate or limit
the liability of a director for any act or omission occurring prior to the date
when such provision becomes effective.
Pursuant to the Delaware General Corporation Law, Section Nine of the
Company's Restated Certificate of Incorporation eliminates a director's personal
liability for monetary damages for breach of fiduciary duty as a director,
except in circumstances involving a breach of the director's duty of loyalty to
StemCells, Inc. or its shareholders, acts or omissions not in good faith,
intentional misconduct, knowing violations of the law, self-dealing or the
unlawful payment of dividends or repurchase of stock.
II-2
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS. The following exhibits are filed as part of this registration
statement:
NUMBER DESCRIPTION
------------------------------------------ ------------------------------------------------------------
3.1* Restated Certificate of Incorporation of the Registrant
3.2++ Amended and Restated By-Laws of the Registrant.
4.1* Specimen Common Stock Certificate.
4.2++++ Form of Warrant Certificate issued to a certain purchaser of
the Registrant's Common Stock in April 1995.
4.3X Warrant to Purchase Common Stock--Mark Angelo.
4.4X Warrant to Purchase Common Stock--Robert Farrell.
4.5X Warrant to Purchase Common Stock--Joseph Donahue.
4.6X Warrant to Purchase Common Stock--Hunter Singer.
4.7X Warrant to Purchase Common Stock--May Davis.
4.8X Common Stock Purchase Warrant.
4.9X Callable Warrant, dated July 31, 2000, issued to Millennium
Partners, L.P.
4.10XXX Registration Rights Agreement dated as of May 10, 2001
between the Company and Sativum Investments Limited.
4.11XXX Warrant, dated May 10, 2001, to Purchase Common Stock issued
to Sativum Investments Limited.
4.12XXX Warrant, dated May 10, 2001, to Purchase Common Stock issued
to Pacific Crest Securities, Inc.
4.13XXX Warrant dated May 10, 2001, to Purchase Common Stock issued
to Granite Financial Group, Inc.
4.14XXX Callable Warrant, dated June 21, 2001, issued to Millennium
Partners, L.P.
4.15XXX Common Stock Purchase Warrant, Class A, dated June 21, 2001,
issued to Millennium Partners, L.P.
4.16[**] Certificate of Designations of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof of 3% Cumulative Convertible Preferred
Stock for StemCells, Inc.
4.17[**] Warrant to Purchase Common Stock--Riverview Group, L.L.C.
4.18 Warrant to Purchase Common Stock--Cantor Fitzgerald & Co.
5.1XXXX Opinion of Ropes & Gray.
10.1* Amendment to Registration Rights dated as of February 14,
1992 among the Registrant and certain of its stockholders.
10.2* Form of at-will Employment Agreement between the Registrant
and most of its employees.
10.3* Form of Agreement for Consulting Services between the
Registrant and members of its Scientific Advisory Board.
10.4* Form of Nondisclosure Agreement between the Registrant and
its Contractors.
II-3
NUMBER DESCRIPTION
------------------------------------------ ------------------------------------------------------------
10.5* Master Lease and Warrant Agreement dated April 23, 1991
between the Registrant and PacifiCorp Credit, Inc.
10.6* 1988 Stock Option Plan.
10.7* 1992 Equity Incentive Plan.
10.8* 1992 Stock Option Plan for Non-Employee Directors.
10.9**!!!! 1992 Employee Stock Purchase Plan.
10.12++ Research Agreement dated as of March 16, 1994 between
NeuroSpheres, Ltd. and Registrant.
10.13++ Term Loan Agreement dated as of September 30, 1994 between
The First National Bank of Boston and Registrant.
10.14++ Lease Agreement between the Registrant and Rhode Island
Industrial Facilities Corporation, dated as of August 1,
1992.
10.15++ First Amendment to Lease Agreement between Registrant and
The Rhode Island Industrial Facilities Corporation dated as
of September 15, 1994.
10.17**++++ Development, Marketing and License Agreement, dated as of
March 30, 1995 between Registrant and Astra AB.
10.18++++ Form of Unit Purchase Agreement to be executed by the
purchasers of the Common Stock and Warrants offered in April
1995.
10.19+++ Form of Common Stock Purchase Agreement to be executed among
the Registrant and certain purchasers of the Registrant's
Common Stock.
10.22### Lease Agreement dated as of November 21, 1997 by and between
Hub RI Properties Trust, as Landlord, and CytoTherapeutics,
Inc., as Tenant.
10.24!! CTI individual stockholders option agreement dated as of
July 10, 1996 among the Company and the individuals listed
therein.
10.25!! CTI Valoria option agreement dated of July 10, 1996 between
the Company and the Societe Financiere Valoria SA.
10.26!!! Term Loan Agreement dated as of October 22, 1996 between The
First National Bank of Boston and the Registrant.
10.27*** Agreement and Plan of Merger dated as of August 13, 1997
among StemCells, Inc., the Registrant and CTI Acquisition
Corp.
10.28*** Consulting Agreement dated as of September 25, 1997 between
Dr. Irving Weissman and the Registrant.
10.29### Letter Agreement among each of Dr. Irving Weissman and Dr.
Fred H. Gage and the Registrant.
10.32**** StemCells, Inc. 1996 Stock Option Plan.
10.33**** 1997 StemCells Research Stock Option Plan (the "1997 Plan").
10.34**** Form of Performance-Based Incentive Option Agreement issued
under the 1997 Plan.
10.35### Employment Agreement dated as of September 25, 1997 between
Dr. Richard M. Rose and the Registrant.
10.38[*] Rights Agreement, dated as of July 27, 1998 between Bank
Boston, N.A. as Rights Agent and the Registrant.
II-4
NUMBER DESCRIPTION
------------------------------------------ ------------------------------------------------------------
10.40%** Consulting Services Agreement dated as of July 27, 1998, as
amended December 19, 1998 between Dr. John J. Schwartz and
the Registrant.
10.41%** Letter Agreement dated as of December 19, 1998 between John
J. Schwartz and the Registrant.
10.42%** License Agreement dated as of October 27, 1998 between The
Scripps Research Institute and the Registrant.
10.43%** License Agreement dated as of October 27, 1998 between The
Scripps Research Institute and the Registrant.
10.44%** License Agreement dated as of November 20, 1998 between The
Scripps Research Institute and the Registrant.
10.45%%** Purchase Agreement and License Agreement dated as of
December 29, 1999 between Neurotech S.A. and the Registrant.
10.46** License Agreement, dated as of June 1999, between The
Scripps Research Institute and the Registrant.
10.47** License Agreement, dated as of June 1999, between The
Scripps Research Institute and the Registrant.
10.48X Form of Registration Rights Agreement, dated as of July 31,
2000, between StemCells, Inc. and investors.
10.49X Subscription Agreement, dated as of July 31, 2000, between
StemCells, Inc. and Millennium Partners, L.P.
10.50XXX Common Stock Purchase Agreement, dated as of May 10, 2001,
between the Company and Sativum Investments Limited.
10.51XXX Esrow Agreement, dated as of May 10, 2001, among the
Company, Sativum Investments Limited and Epstein, Becker &
Green, P.C.
10.52XX License Agreement, dated as of October 30, 2000, between the
Company and Neuro Spheres Ltd.
10.53XX Letter Agreement, dated January 2, 2001, between the Company
and Martin McGlynn.
10.54XX Lease, dated February 1, 2001, between the Board of Trustees
of Stanford University and the Company.
10.55XXX Registration Rights Agreement, dated as of June 21, 2001, by
and between the Company and Millennium Partners, L.P.
10.56XXX Subscription Agreement, dated as of June 21, 2001, by and
between the Company and Millennium Partners, L.P.
10.57%%% 2001 Equity Incentive Plan.
10.58[**] Subscription Agreement dated as of December 4, 2001 between
StemCells, Inc. and Riverview Group, L.L.C.
10.59[**] Registration Rights Agreement dated as of December 4, 2001
between StemCells, Inc. and Riverview Group, L.L.C.
10.60[**] Agreement dated as of December 4, 2001 between StemCells,
Inc. and Millennium Partners, L.P.
10.61[**] Agreement dated as of December 4, 2001 among StemCells,
Inc., Millennium Partners, L.P. and Riverview Group, L.L.C.
II-5
NUMBER DESCRIPTION
------------------------------------------ ------------------------------------------------------------
21.1X Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2XXXX Consent of Ropes & Gray (included in the form of opinion
filed as Exhibit 5.1).
24.1 Power of Attorney pursuant to which amendments to this
registration statement may be filed (contained on page II-9
hereto).
99.2XX Side Letter, dated March 17, 2001, between the Company and
Oleh S. Hnatiuk regarding NeuroSpheres License Agreement,
dated October 30, 2000.
------------------------
++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-1, File No. 333-85494.
+++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-3, File No. 333-97272.
++++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-1, File No. 333-91228.
* Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, Registration Statement on
Form S-1, File No. 333-45739.
# Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Annual Report on Form 10-K
for fiscal year ended December 31, 1992 and filed March 30, 1993.
** Confidential treatment requested as to certain portions. The term
"confidential treatment" and the mark "**" as used throughout the
indicated Exhibits mean that material has been omitted and separately
filed with the Commission.
## Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994 and filed on May 14,
1994.
+ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 and filed on March 30,
1994.
! Previously filed with the Commission as an Exhibit to and
incorporated by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996.
!! Previously filed with the Commission as an Exhibit to and
incorporated by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996.
!!! Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 and filed on
March 31, 1997.
!!!! Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.
*** Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997 and
filed on November 14, 1997.
**** Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, the Registrant's Registration
Statement on Form S-8, File No. 333-37313.
II-6
### Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's annual report
on Form 10-K for the fiscal year ended December 31, 1997 and filed on
March 30, 1998.
[*] Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K filed on August 3, 1998.
[**] Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K filed on December 7, 2001.
% Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's annual report
on Form 10-K for the fiscal year ended December 31, 1998 and filed on
March 31, 1999.
%% Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K on January 14, 2000.
%%% Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference to, the Registrant's definitive proxy statement
filed May 1, 2001.
X Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Registration
Statement on Form S-1, File No. 333-45496.
XX Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000 and filed on
April 2, 2001.
XXX Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference to, the Registrant's Registration Statement filed
on Form S-1 as amended to Form S-3, File No. 333-61726.
XXXX Previously filed with the Commission as a Exhibit to, and incorporated
herein by reference to, the Registrant's Registration Statement filed
on Form S-3, File No. 333-75806.
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered
II-7
would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) To file a post-effective amendment to the Registration Statement to
include any financial statements required by section 10(a)(3) of the
Securities Act.
(c) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Palo Alto, State of California, on the 9th day of January, 2002.
STEMCELLS, INC.
BY: *
-----------------------------------------
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on January 9, 2002.
SIGNATURE TITLE
--------- -----
Martin M. McGlynn,
President, Chief Executive Officer
* (Principal Executive Officer), Director
-------------------------------------------
George Koshy,
Controller and Acting Chief Financial
Officer (Principal Financial Officer and
* Principal Accounting Officer)
-------------------------------------------
Mark J. Levin
* Director
-------------------------------------------
Roger M. Perlmutter, M.D., Ph.D.
* Director
-------------------------------------------
John J. Schwartz, Ph.D.
* Director
-------------------------------------------
Irving Weissman, M.D.
* Director
-------------------------------------------
Ricardo B. Levy, Ph.D.
* Director
-------------------------------------------
* By executing her name hereto, Iris Brest is signing the document on behalf
of the persons indicated above pursuant to the power of attorney duly
executed by such persons and filed with the Securities and Exchange
Commission.
* By: /s/ IRIS BREST
------------------------------
Iris Brest
ATTORNEY-IN-FACT
II-9
EXHIBIT INDEX
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
3.1* Restated Certificate of Incorporation of the Registrant
3.2++ Amended and Restated By-Laws of the Registrant.
4.1* Specimen Common Stock Certificate.
4.2++++ Form of Warrant Certificate issued to a certain purchaser of
the Registrant's Common Stock in April 1995.
4.3X Warrant to Purchase Common Stock--Mark Angelo.
4.4X Warrant to Purchase Common Stock--Robert Farrell.
4.5X Warrant to Purchase Common Stock--Joseph Donahue.
4.6X Warrant to Purchase Common Stock--Hunter Singer.
4.7X Warrant to Purchase Common Stock--May Davis.
4.8X Common Stock Purchase Warrant.
4.9X Callable Warrant, dated July 31, 2000, issued to Millennium
Partners, L.P.
4.10XXX Registration Rights Agreement dated as of May 10, 2001
between the Company and Sativum Investments Limited.
4.11XXX Warrant, dated May 10, 2001, to Purchase Common Stock issued
to Sativum Investments Limited.
4.12XXX Warrant, dated May 10, 2001, to Purchase Common Stock issued
to Pacific Crest Securities, Inc.
4.13XXX Warrant dated May 10, 2001, to Purchase Common Stock issued
to Granite Financial Group, Inc.
4.14XXX Callable Warrant, dated June 21, 2001, issued to Millennium
Partners, L.P.
4.15XXX Common Stock Purchase Warrant, Class A, dated June 21, 2001,
issued to Millennium Partners, L.P.
4.16[**] Certificate of Designations of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof of 3% Cumulative Convertible Preferred
Stock for StemCells, Inc.
4.17[**] Warrant to Purchase Common Stock--Riverview Group, L.L.C.
4.18 Warrant to Purchase Common Stock--Cantor Fitzgerald & Co.
5.1XXXX Opinion of Ropes & Gray.
10.1* Amendment to Registration Rights dated as of February 14,
1992 among the Registrant and certain of its stockholders.
10.2* Form of at-will Employment Agreement between the Registrant
and most of its employees.
10.3* Form of Agreement for Consulting Services between the
Registrant and members of its Scientific Advisory Board.
10.4* Form of Nondisclosure Agreement between the Registrant and
its Contractors.
10.5* Master Lease and Warrant Agreement dated April 23, 1991
between the Registrant and PacifiCorp Credit, Inc.
10.6* 1988 Stock Option Plan.
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
10.7* 1992 Equity Incentive Plan.
10.8* 1992 Stock Option Plan for Non-Employee Directors.
10.9**!!!! 1992 Employee Stock Purchase Plan.
10.12++ Research Agreement dated as of March 16, 1994 between
NeuroSpheres, Ltd. and Registrant.
10.13++ Term Loan Agreement dated as of September 30, 1994 between
The First National Bank of Boston and Registrant.
10.14++ Lease Agreement between the Registrant and Rhode Island
Industrial Facilities Corporation, dated as of August 1,
1992.
10.15++ First Amendment to Lease Agreement between Registrant and
The Rhode Island Industrial Facilities Corporation dated as
of September 15, 1994.
10.17**++++ Development, Marketing and License Agreement, dated as of
March 30, 1995 between Registrant and Astra AB.
10.18++++ Form of Unit Purchase Agreement to be executed by the
purchasers of the Common Stock and Warrants offered in April
1995.
10.19+++ Form of Common Stock Purchase Agreement to be executed among
the Registrant and certain purchasers of the Registrant's
Common Stock.
10.22### Lease Agreement dated as of November 21, 1997 by and between
Hub RI Properties Trust, as Landlord, and CytoTherapeutics,
Inc., as Tenant.
10.24!! CTI individual stockholders option agreement dated as of
July 10, 1996 among the Company and the individuals listed
therein.
10.25!! CTI Valoria option agreement dated of July 10, 1996 between
the Company and the Societe Financiere Valoria SA.
10.26!!! Term Loan Agreement dated as of October 22, 1996 between The
First National Bank of Boston and the Registrant.
10.27*** Agreement and Plan of Merger dated as of August 13, 1997
among StemCells, Inc., the Registrant and CTI Acquisition
Corp.
10.28*** Consulting Agreement dated as of September 25, 1997 between
Dr. Irving Weissman and the Registrant.
10.29### Letter Agreement among each of Dr. Irving Weissman and Dr.
Fred H. Gage and the Registrant.
10.32**** StemCells, Inc. 1996 Stock Option Plan.
10.33**** 1997 StemCells Research Stock Option Plan (the "1997 Plan").
10.34**** Form of Performance-Based Incentive Option Agreement issued
under the 1997 Plan.
10.35### Employment Agreement dated as of September 25, 1997 between
Dr. Richard M. Rose and the Registrant.
10.38[*] Rights Agreement, dated as of July 27, 1998 between Bank
Boston, N.A. as Rights Agent and the Registrant.
10.40%** Consulting Services Agreement dated as of July 27, 1998, as
amended December 19, 1998 between Dr. John J. Schwartz and
the Registrant.
10.41%** Letter Agreement dated as of December 19, 1998 between John
J. Schwartz and the Registrant.
10.42%** License Agreement dated as of October 27, 1998 between The
Scripps Research Institute and the Registrant.
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
10.43%** License Agreement dated as of October 27, 1998 between The
Scripps Research Institute and the Registrant.
10.44%** License Agreement dated as of November 20, 1998 between The
Scripps Research Institute and the Registrant.
10.45%%** Purchase Agreement and License Agreement dated as of
December 29, 1999 between Neurotech S.A. and the Registrant.
10.46** License Agreement, dated as of June 1999, between The
Scripps Research Institute and the Registrant.
10.47** License Agreement, dated as of June 1999, between The
Scripps Research Institute and the Registrant.
10.48X Form of Registration Rights Agreement, dated as of July 31,
2000, between StemCells, Inc. and investors.
10.49X Subscription Agreement, dated as of July 31, 2000, between
StemCells, Inc. and Millennium Partners, L.P.
10.50XXX Common Stock Purchase Agreement, dated as of May 10, 2001,
between the Company and Sativum Investments Limited.
10.51XXX Esrow Agreement, dated as of May 10, 2001, among the
Company, Sativum Investments Limited and Epstein, Becker &
Green, P.C.
10.52XX License Agreement, dated as of October 30, 2000, between the
Company and Neuro Spheres Ltd.
10.53XX Letter Agreement, dated January 2, 2001, between the Company
and Martin McGlynn.
10.54XX Lease, dated February 1, 2001, between the Board of Trustees
of Stanford University and the Company.
10.55XXX Registration Rights Agreement, dated as of June 21, 2001, by
and between the Company and Millennium Partners, L.P.
10.56XXX Subscription Agreement, dated as of June 21, 2001, by and
between the Company and Millennium Partners, L.P.
10.57%%% 2001 Equity Incentive Plan.
10.58[**] Subscription Agreement dated as of December 4, 2001 between
StemCells, Inc. and Riverview Group, L.L.C.
10.59[**] Registration Rights Agreement dated as of December 4, 2001
between StemCells, Inc. and Riverview Group, L.L.C.
10.60[**] Agreement dated as of December 4, 2001 between StemCells,
Inc. and Millennium Partners, L.P.
10.61[**] Agreement dated as of December 4, 2001 among StemCells,
Inc., Millennium Partners, L.P. and Riverview Group, L.L.C.
21.1X Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2XXXX Consent of Ropes & Gray (included in the form of opinion
filed as Exhibit 5.1).
24.1 Power of Attorney pursuant to which amendments to this
registration statement may be filed (contained on page II-9
hereto).
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
99.2XX Side Letter, dated March 17, 2001, between the Company and
Oleh S. Hnatiuk regarding NeuroSpheres License Agreement,
dated October 30, 2000.
------------------------
++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-1, File No. 333-85494.
+++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-3, File No. 333-97272.
++++ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Registration Statement on
Form S-1, File No. 333-91228.
* Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, Registration Statement on
Form S-1, File No. 333-45739.
# Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Annual Report on Form 10-K
for fiscal year ended December 31, 1992 and filed March 30, 1993.
** Confidential treatment requested as to certain portions. The term
"confidential treatment" and the mark "**" as used throughout the
indicated Exhibits mean that material has been omitted and separately
filed with the Commission.
## Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994 and filed on May 14,
1994.
+ Previously filed with the Commission as Exhibits to, and incorporated
herein by reference to, the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 and filed on March 30,
1994.
! Previously filed with the Commission as an Exhibit to and
incorporated by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996.
!! Previously filed with the Commission as an Exhibit to and
incorporated by reference to, the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996.
!!! Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 and filed on
March 31, 1997.
!!!! Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.
*** Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997 and
filed on November 14, 1997.
**** Previously filed with the Commission as Exhibits to, and
incorporated herein by reference to, the Registrant's Registration
Statement on Form S-8, File No. 333-37313.
### Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's annual report
on Form 10-K for the fiscal year ended December 31, 1997 and filed on
March 30, 1998.
[*] Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K filed on August 3, 1998.
[**] Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K filed on December 7, 2001.
% Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's annual report
on Form 10-K for the fiscal year ended December 31, 1998 and filed on
March 31, 1999.
%% Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's current report
on Form 8-K on January 14, 2000.
%%% Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference to, the Registrant's definitive proxy statement
filed May 1, 2001.
X Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Registration
Statement on Form S-1, File No. 333-45496.
XX Previously filed with the Commission as an Exhibit to, and
incorporated herein by reference to, the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000 and filed on
April 2, 2001.
XXX Previously filed with the Commission as an Exhibit to, and incorporated
herein by reference to, the Registrant's Registration Statement filed
on Form S-1 as amended to Form S-3, File No. 333-61726.
XXXX Previously filed with the Commission as a Exhibit to, and incorporated
herein by reference to, the Registrant's Registration Statement filed
on Form S-3, File No. 333-75806.