<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 8, 2000
----------------------
STEMCELLS, INC.
(formerly CYTOTHERAPEUTICS, INC.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-19871 94-3078125
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) (Identification Number)
525 DEL REY AVENUE, SUITE C
SUNNYVALE, CA 94085
(Address of principal executive offices, including zip code)
(408) 731-8670
(Registrant's Telephone number including area code)
----------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Page 1 of 6
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Pro Forma Financial Information
During the third quarter of 1999, management reached a decision to exit the
Company's Encapsulated Cell Therapy (ECT) activities, dispose of the related
intellectual property, facilities and equipment and relocate the Lincoln, RI
corporate headquarters to Sunnyvale, CA. At the same time, the Company accrued
various estimated expenses associated with the exit and wind-down of the ECT
activities, disposal of the related property and relocation of the corporate
headquarters. Additional accruals were provided in December 1999 for expenses
relating to settlement of a 1989 funding arrangement with the Rhode Island
Partnership for Science and Technology, further adjustment to asset carrying
values and estimated carrying costs associated with the Rhode Island facilities
through the expected disposition date. In addition, during December 1999, the
Company liquidated certain ECT equipment and sold its ECT intellectual property
to Neurotech, S.A. for $3,000,000. The tabular unaudited pro forma consolidated
statement of operations presents the effects of the sale, wind-down and
relocation, as if they had occurred at January 1, 1999. The tabular unaudited
pro forma consolidated balance sheet along with the accompanying notes are
presented as if the sale, wind-down and relocation had occurred at December 31,
1999. The pro forma effects and adjustments were determined based on available
information and certain allocations that management believes are reasonable. The
pro forma financial information does not purport to represent what the
Company's operating results would have been had the sale occurred at
January 1, 1999 and may not be indicative of the Company's financial position or
operating results for any future date or period.
Page 2 of 6
<PAGE>
CYTOTHERAPEUTICS, INC.
December 31, 1999
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Historical Pro Forma
Consolidated Consolidated
12/31/1999 Adjustments(A) 12/31/1999
------------ --------------- -----------
<S> <C> <C> <C>
Revenue from collaborative agreements $ 5,021,707 $ (5,021,707)(1) $ --
Operating expenses: 9,984,027 (5,332,331)(2) 4,651,696
Research and development 4,927,303 (2,309,315)(3) 2,517,988
General and administrative 6,047,808 (6,047,806)(4) --
------------ ------------ -----------
Encapsulated Cell Therapy Wind down and Corporate Relocation 20,959,136 (13,689,452) 7,269,684
------------ ------------ -----------
Loss from operations (15,937,429) 8,687,745 (7,269,684)
Other income (expense):
Interest income 584,006 -- 584,006
Interest expense (335,203) -- --
------------ ------------ -----------
228,803 -- 584,006
------------ ------------ -----------
------------ ------------ -----------
Net loss $(15,708,826) $ 8,667,745 $(6,705,678)
------------ ------------ -----------
------------ ------------ -----------
Basic and diluted net loss per share ($0.84) $0.46 $(0.36)
------------ ------------ -----------
------------ ------------ -----------
Shares used in computing basic and diluted net loss per share 18,705,838 18,705,838 18,705,838
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
Page 3 of 6
<PAGE>
CYTOTHERAPEUTICS, INC.
December 31, 1999
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
Historical Pro Forma
December 31, 1999 Adjustments(A) December 31, 1999
----------------- ------------- -----------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,760,064 $ -- $ 4,760,064
Marketable securities -- --
Accrued interest receivable 42,212 42,212
Technology sale receivable 3,000,000 3,000,000
Assets held for sale -- 3,300,000(5) 3,300,000
Other current assets 1,168,579 1,168,579
------------- ----------- -------------
Total current assets 8,970,865 3,300,000 12,270,855
Property, plant and equipment, net 5,251,376 (3,600,000)(5) 1,651,376
Other assets, net 1,858,768 1,858,768
------------- ----------- -------------
Total assets $ 18,080,999 $ (300,000) $ 15,780,999
------------- ----------- -------------
------------- ----------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 631,315 $ 631,315
Accrued expenses 2,905,068 (300,000)(5) 2,605,068
Current maturities of capitalized lease obligations 324,187 324,187
------------- ----------- -------------
Total current liabilities 3,860,550 (300,000) 3,580,550
Capitalized lease obligations, less current maturities 2,937,083 2,937,083
Deposits 26,000 26,000
Deferred Rent 502,353 502,353
Commitments and contingencies -- --
Redeemable common stock, $.01 par value;
524,337 shares issued and outstanding 5,248,610 5,248,610
Stockholders equity:
Convertible preferred stock, $.01 par value; 1,000,000
shares authorized; no shares issued and outstanding -- --
Common stock, $.01 par value; 45,000,000 shares
authorized; 18,635,565 shares issued and outstanding 186,355 186,355
Additional paid-in capital 123,917,758 123,917,758
Accumulated deficit (119,372,710) (119,372,710)
Unrealized losses on marketable securities -- --
------------- ----------- -------------
Accumulated other comprehensive loss (119,372,710) -- (119,372,710)
Deferred compensation (1,225,000) (1,225,000)
------------- ----------- -------------
Total stockholders' equity 3,506,403 -- 3,506,403
------------- ----------- -------------
Total liabilities and stockholders' equity $ 16,080,999 $ (300,000) $ 15,780,999
------------- ----------- -------------
------------- ----------- -------------
</TABLE>
Page 4 of 6
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEET
Note A-Pro Forma Adjustments
(1) To eliminate of Encapsulated Cell Therapy collaborative revenue
arrangements.
(2) To eliminate research and development expenses directly related to the
Encapsulated Cell Therapy activities.
(3) To eliminate general and administrative costs related to Encapsulated Cell
Therapy based on historical allocations and assumptions made by management.
(4) To eliminate Encapsulated Cell Therapy wind-down and corporate relocation
expenses, including Rhode Island facility carrying costs, employee severance
arrangements and settlement of a 1989 funding arrangement with the Rhode
Island Partnership for Science and Technology.
(5) To reclassify the net book value of the Rhode Island property, plant and
equipment.
Page 5 of 6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STEMCELLS, INC.
By /s/ George W. Dunbar, Jr.
-----------------------------------
Title: Acting President and
Chief Executive Officer
Date: September 8, 2000
Page 6 of 6
