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Subsequent Events | 6 Months Ended
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Jun. 30, 2016
Subsequent Events [Abstract] |
Subsequent Events | Note 12. Subsequent Events Proposed Merger with Microbot Medical Ltd. On August 15, 2016, StemCells entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with CIRD Israel Ltd., an Israeli corporation and wholly-owned subsidiary of StemCells (“Merger Sub”) and Microbot Medical Ltd., a private medical device company organized under the laws of the State of Israel (“Microbot”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Microbot, Merger Sub will cease to exist and Microbot will survive as a wholly-owned subsidiary of StemCells (the “Merger” or the “Microbot Merger”). The respective boards of directors of StemCells and Microbot have approved the Merger Agreement and the transactions contemplated thereby. At the effective time of the Microbot Merger (the “Effective Time”), each outstanding share of Microbot capital stock will be converted into the right to receive that number of shares of StemCells common stock as determined pursuant to the exchange ratio described in the Merger Agreement (the “Exchange Ratio”). In addition, at the Effective Time: (i) all outstanding options to purchase shares of Microbot stock will be assumed by StemCells and converted into options to purchase shares of StemCells common stock, in each case appropriately adjusted based on the Exchange Ratio; and (ii) all outstanding warrants to purchase shares of the capital stock of Microbot will be assumed by StemCells and converted into warrants to purchase shares of StemCells common stock, in each case appropriately adjusted based on the Exchange Ratio. No fractional shares of StemCells common stock will be issued in the Microbot Merger. The Merger Agreement has been filed with the SEC as an exhibit to the Company’s Form 8-K dated August 15, 2016. Following the consummation of the Microbot Merger, former stockholders of Microbot are expected to own approximately 95% of the combined company and current stockholders of StemCells are expected to own approximately 5% of the combined company, in each case based on the fully diluted shares of each company prior to the consummation of the Microbot Merger. In connection with the Microbot Merger, StemCells will seek to amend its certificate of incorporation to: (a) effect a reverse stock split of StemCells’ common stock if necessary to comply with the listing requirements of the NASDAQ Capital Market; (b) increase the number of authorized shares of StemCells common stock; and (c) change the name of StemCells to “Microbot Medical Inc.” or another name designated by Microbot. The Merger Agreement provides that, immediately following the Effective Time, the board of directors of StemCells will be designated by Microbot at closing. The completion of the Microbot Merger is subject to various customary conditions, including, among other things: (a) the approval of the respective stockholders of StemCells and Microbot; (b) subject to certain materiality exceptions, the accuracy of the representations and warranties made by each of StemCells and Microbot and the compliance by each of StemCells and Microbot with their respective obligations under the Merger Agreement; and (c) approval for the listing of shares of StemCells common stock to be issued in the Microbot Merger on the NASDAQ Capital Market; (d) approval of the transactions contemplated by the Merger Agreement by the Office of Chief Scientist at the Israeli Ministry of Economy; and (e) that StemCells’s cash position, net of debt and certain other liabilities, is not less than $0, excluding any balance under the Note (as defined below). The Merger Agreement contains customary representations, warranties and covenants, including covenants obligating each of StemCells and Microbot to continue to conduct its respective business in the ordinary course, to provide reasonable access to each other’s information and to use reasonable best efforts to cooperate and coordinate to make any filings or submissions that are required to be made under any applicable laws or requested to be made by any government authority in connection with the Merger. The Merger Agreement also contains a customary “no solicitation” provision pursuant to which, prior to the completion of the Microbot Merger, neither StemCells nor Microbot may solicit or engage in discussions with any third party regarding another acquisition proposal unless it has received an unsolicited, bona fide written proposal that the recipient’s board of directors determines is or would reasonably be expected to result in a Superior Proposal (as defined in the Merger Agreement). The Merger Agreement contains certain termination rights in favor of each of StemCells and Microbot. Material Litigation and Early Exit from Newark Facility – BMR v. StemCells, Inc. On June 30, 2016, one of the Company’s landlords, BMR-Pacific Research Center LP (“BMR”), filed a civil complaint for damages against the Company in Alameda County Superior Court, case no. RG16821619 (the “BMR Suit”). In its suit, BMR alleges that the Company has breached its real property lease at its Newark facility by winding down operations. The Company disputes BMR’s allegations and has been opposing the litigation in due course. However, on July 29, 2016, in order to avoid the costs and uncertainties inherent in any litigation, the parties to the BMR Suit agreed to settle the case. As part of the settlement agreement with BMR, the Company will make a one-time settlement payment of $800,000 to BMR and BMR has agreed to the Company’s early exit from the Newark facility, as of August 1, 2016, and to dismiss the BMR suit with prejudice. Early Exit from Humboldt Facility On July 13, 2016, the Company entered into a series of agreements with both Miltenyi Biotec, Inc., a California subsidiary of a German research tools company (“Miltenyi”), and Portfolio Investors, LLC, the company’s landlord for its leased facility in Sunnyvale, California, providing for the Company’s early exit from the Sunnyvale facility. As part of these transactions, the Company assigned its existing real property lease to the Sunnyvale facility to Miltenyi and Miltenyi purchased certain equipment and other assets from the Company for $650,000. As of August 1, 2016, the Company has exited its previously leased facilities in both Newark and Sunnyvale, California. No further lease payments are owed for either facility. Secured Note and Security Agreement On August 15, 2016, in connection with the consummation Merger, StemCells issued a 5.0% secured note (the “Note”) to Alpha Capital Anstalt (“Investor”), in the principal amount of $2 million, for value received, payable upon the earlier of (i) 30 days following the consummation of the Microbot Merger and (ii) December 31, 2016. Proceeds from the Note are to be used for Closing costs in connection with the Microbot Merger and operational expenses leading to such Closing. Pursuant to the terms of the Note, StemCells is obligated to pay interest on the principal amount owed under the Note at a fixed rate per annum of 5.0%, payable monthly on the first of the month, beginning on December 31, 2016 until the principal amount is paid in full. In addition, on August 15, 2016, StemCells and Investor entered into a Security Agreement to secure StemCells’ obligations under the Note. StemCells’ obligations are secured by a first priority security interest in all of StemCells’ intellectual property and certain general assets other than cash, deposit accounts, certificates of deposit or securities accounts.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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