StemCells CEO, CFO and three directors resigned the day of merger that boosted stock sevenfold
Published: Aug 17, 2016
Five senior executives at StemCells Inc. resigned the day the company entered a merger with private company Microbot Medical Ltd.
By TOMI KILGORE
Click to see graphs:
http://www.marketwatch.com/story/stemcells-ceo-cfo-and-three-directors-resigned-the-day-of-merger-that-boosted-stock-sevenfold-2016-08-16
The day that StemCells Inc. entered a merger that sent its stock rocketing up sevenfold (albeit to $2.36 per share), the company’s chief executive and chief financial officers effectively resigned, as did three members of the company’s board of directors.
The reverse-merger with Israeli private company Microbot Medical Ltd. was “unanimously” approved by StemCells’ STEM, -35.38% board of directors on Monday. Three of the members of the board resigned that day “in connection with the announcement of the merger agreement,” according to the SEC filing, leaving three other members that will continue to serve.
“None of the foregoing resignations were the result [of] any disagreement with the company on any matter,” according to the filing.
The reverse-merger also marks an abrupt departure from a plan to wind down the company in the face of limited financial resources that was announced just two-and-a-half months ago.
Microbot and investors said they would provide $4 million in financing as an incentive for the merger, which should fund StemCells operations after the deal closes for at least 18 months, the filing said.
As part of his resignation, former chief executive officer Ian Massey should receive a one-time $216,667 payment, and former chief financial officer Gregory Schiffman should receive a one-time $187,500 payment along with a year of COBRA premiums. Kenneth Stratton took over as interim president on Monday.
Read more: StemCells can’t fix its problems with a reverse split, or by burying bad news http://www.marketwatch.com/story/stemcells-cant-fix-its-problems-with-a-reverse-split-or-by-burying-bad-news-2016-05-31
The merger, which will enable the companies develop robotics-based medical devices for conditions including cerebrospinal fluid and gastrointestinal disorders, sent StemCells’ shares up 611.2% as of Tuesday afternoon.
StemCells is a two decade-old biotechnology company that was attempting to develop a stem cell platform technology for central nervous system disease treatments.
StemCells said in late May that it would shutter the company after running out of money and that its employees would lose their jobs at the start of August.
The news of the resignations of five executives was not included in Tuesday’s news release, but was outlined in the SEC filing Monday. The May announcement was similarly masked by news the company was ending a clinical trial.
See: StemCells plans to wind down company after it runs out of money http://www.marketwatch.com/story/stemcells-plans-to-wind-down-company-after-it-runs-out-of-money-2016-05-31
StemCells closed Monday at 37 cents per share. The stock has dropped 47.3% over the last three months, compared with a 5.6% rise in the S&P 500 SPX, -0.30%
StemCells was not immediately available for comment.
Published: Aug 17, 2016
Five senior executives at StemCells Inc. resigned the day the company entered a merger with private company Microbot Medical Ltd.
By TOMI KILGORE
Click to see graphs:
http://www.marketwatch.com/story/stemcells-ceo-cfo-and-three-directors-resigned-the-day-of-merger-that-boosted-stock-sevenfold-2016-08-16
The day that StemCells Inc. entered a merger that sent its stock rocketing up sevenfold (albeit to $2.36 per share), the company’s chief executive and chief financial officers effectively resigned, as did three members of the company’s board of directors.
The reverse-merger with Israeli private company Microbot Medical Ltd. was “unanimously” approved by StemCells’ STEM, -35.38% board of directors on Monday. Three of the members of the board resigned that day “in connection with the announcement of the merger agreement,” according to the SEC filing, leaving three other members that will continue to serve.
“None of the foregoing resignations were the result [of] any disagreement with the company on any matter,” according to the filing.
The reverse-merger also marks an abrupt departure from a plan to wind down the company in the face of limited financial resources that was announced just two-and-a-half months ago.
Microbot and investors said they would provide $4 million in financing as an incentive for the merger, which should fund StemCells operations after the deal closes for at least 18 months, the filing said.
As part of his resignation, former chief executive officer Ian Massey should receive a one-time $216,667 payment, and former chief financial officer Gregory Schiffman should receive a one-time $187,500 payment along with a year of COBRA premiums. Kenneth Stratton took over as interim president on Monday.
Read more: StemCells can’t fix its problems with a reverse split, or by burying bad news http://www.marketwatch.com/story/stemcells-cant-fix-its-problems-with-a-reverse-split-or-by-burying-bad-news-2016-05-31
The merger, which will enable the companies develop robotics-based medical devices for conditions including cerebrospinal fluid and gastrointestinal disorders, sent StemCells’ shares up 611.2% as of Tuesday afternoon.
StemCells is a two decade-old biotechnology company that was attempting to develop a stem cell platform technology for central nervous system disease treatments.
StemCells said in late May that it would shutter the company after running out of money and that its employees would lose their jobs at the start of August.
The news of the resignations of five executives was not included in Tuesday’s news release, but was outlined in the SEC filing Monday. The May announcement was similarly masked by news the company was ending a clinical trial.
See: StemCells plans to wind down company after it runs out of money http://www.marketwatch.com/story/stemcells-plans-to-wind-down-company-after-it-runs-out-of-money-2016-05-31
StemCells closed Monday at 37 cents per share. The stock has dropped 47.3% over the last three months, compared with a 5.6% rise in the S&P 500 SPX, -0.30%
StemCells was not immediately available for comment.