On the announced updates on the company’s stem cell technology, the stock jumped up to over $1.18 for a share directly after the market opened, breaking all resistances back to the beginning of May. After the following draw back, the total gain from the previous close was 4.72% and the shares closed at $0.91. The share volume was over 17.4 million, as compared to an average volume of only 577,000.
As it usually happens, such high market interest caught the attention of certain stock promoters as well and a paid advertising newsletter reached investors towards the end of the trading session, causing probably the final volume wave, on which however the price did not climb any further. Thus, yesterday the publication of some new preclinical results showing that StemCell’s proprietary human stem sells technology can restore lost motor in mice with chronic spinal injury was not enough for a close above the $1 barrier.
It is the requirement for continuous listing on the NASDAQ that STEM did not manage to cope with on 30 consecutive business days. Last week, the company received the notification that their stock faces delisting if the closing price does not overcome the $1 barrier, whereby the compliance period will end in February next year.
Yesterday, it seemed that the first step towards regaining compliance can be made soon and the negative consequences from the disappointing second quarter results and the recent dilution can be offset. STEM currently derives revenues mainly from license payments. A small part of the revenues comes from product sales, but these dropped by 40% in this year’s second quarter as compared to the second quarter of last year.
StemCells cannot get profitable in the near future and in addition relies strongly on equity offerings to fund its operations. At the end of June, the next sale of common shares under a previously filed shelf registration statement took place. Seven million new shares were sold to an institutional investor for total net proceeds of $5.7 million. No warrants were issued this time, but the company has the option to sell to the investor additional five million shares 12 weeks after the initial sale.
