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StemCells, Inc. Announces Closing of $18.6 Million Public Offering
Terminates $30 Million Equity Purchase Agreement With Lincoln Park Capital

NEWARK, Calif., Oct. 8, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM) today announced that it has closed its previously announced underwritten public offering of common stock and warrants. The Company sold a total of 12,845,500 units, which includes the underwriter's full over-allotment option. The Company sold the units at a public offering price of $1.45 per unit and received total proceeds, net of offering expenses, underwriting discounts and commissions, of approximately $17.3 million. Each unit sold consists of one share of common stock, par value $.01 per share, and a warrant to purchase one half share of common stock. The warrants have an exercise price of $1.80 per share, are exercisable immediately, and will expire five years from the date of issuance. 

Chardan Capital Markets acted as sole bookrunner for the offering and Maxim Group LLC acted as co-manager.

In connection with the offering, the Company terminated its $30 million equity purchase agreement with Lincoln Park Capital. Lincoln Park Capital participated in the offering as an investor.

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 Phase I 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 is conducting 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 three 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. 

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 expected amount and use of net proceeds; and the prospect for continued clinical development of the Company's HuCNS-SC cells in CNS disorders. 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; 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 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, 2012, and in its subsequent reports on Form 10-Q and Form 8-K.

CONTACT: Rodney Young
         StemCells, Inc.
         Chief Financial Officer
         (510) 456-4128

         Ian Stone
         Russo Partners
         (619) 308-6541

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StemCells, Inc.