MBOT - NASDAQ

Gregory Schiffman - Chief Financial Officer Ian Massey - President, Chief Executive Officer Stephen Huhn - Vice President of Clinical Research and Chief Medical Officer

Jason Kolbert - Maxim Keay Nakae - Chardan Ed Woo - Ascendiant Capital Yi Chen - H.C. Wainwright

Good day, ladies and gentlemen, and welcome to the Q4 2015 StemCells, Inc Earnings Conference Call. [Operator Instructions] At this time, all participants are in a listen-only mode. Later there will be a question-answer session and instructions will follow at that time. [Operator Instructions] As a reminder to the audience, this conference is being recorded. Now, I would like to hand the floor over to Greg Schiffman, Chief Financial Officer. Sir, you have the floor.

Thank you. Welcome everybody and thank you for joining us today. With me today are Ian Massey, our President and Chief Executive Officer, and Dr. Stephen Huhn, our Vice President of Clinical Research and Chief Medical Officer. Before we proceed, I would like to remind everyone that during today's call, we will be making some forward-looking statements, which reflect our current views and are based upon certain assumptions that may or may not ultimately prove valid. We assume no obligation to update these forward-looking statements anytime in the future and our actual results may differ materially from anything projected during today's call due to risks and uncertainties to which we are subject. These risks and uncertainties are described in our public filings with the Securities and Exchange Commission and at the end of our earnings release, which you are encouraged to consult. Let me now turn the call over to Ian.

Good morning and thank you, Greg. As many of you know, I was appointed as Chief Executive Officer of StemCells in January of this year and so this is my first quarterly meeting with you as CEO. By way of background, I have almost 40 years of experience in the pharmaceutical and biotech field. I have held senior positions at Syntex and Roche where I was Head of Research and Development for its Palo Alto site in California. In 2006, I co-founded and was the President and Chief Executive Officer of Synosia Therapeutics, a company focused on the development of treatment for neurodegenerative diseases. Synosia under reverse merger with Biotie Therapies in 2011 and Biotie was recently acquired by Acorda. After leaving Biotie Therapies, I spend time at Versant Ventures, a leading healthcare venture capital group as an entrepreneur in residence. I was brought into StemCells as President and Chief Operating Officer in March 2015 by Martin McGlynn, our previous CEO. As COO, I was responsible for all aspects of product development, including clinical development in operations, manufacturing, quality and regulatory. Martin drove me into the company with the expectation that I would succeed him as CEO. The company shift in strategy at the end of last year, leading us to focus on our spinal cord program with the corresponding reduction and size of the organization created a natural transition point. I have a history of building and leading science-driven business focused organizations that have created value by delivering robust, clinical proof-of-concept data for novel therapeutic agents. Over the years, I have been associated with bringing over a dozen products to the market including CellCept to prevent organ rejection following transplantation. Naproxen for treatment of pain and particularly for prevention of stroke. Personally, I’m driven by the development of novel therapies and therapeutic approaches to treat important and serious unmet medical needs, especially in the area of central nervous system disorders. I believe that rigorous science created translational medicine approaches based on robust pre-clinical data and strong team work are central for the successful development of novel therapies. It was therefore an easy decision for me to join StemCells early last year. I was compelled by the death and quality of the science and by a high degree of correlation between the pre-clinical animal data and the human clinical data. It is indeed exciting to join a company that is well on the way towards generating key clinical data to validate a cutting-edge stem cell therapy for the treatment of serious central nervous system disorders especially ones that currently have no treatment options. During my first nine months with the company the senior leadership team and I took a very hard and detail look at the company’s strategy, programs and portfolio. From a high level perspective considering the company’s cash burn and history we decided that we needed a strategy that would deliver a major value inflation point within the next two years. We agreed that at this stage of our company’s development the most meaningful value inflation point would be the generation of clinical data from a well controlled Phase II proof of concept clinical study in at least one indication. We expect that statistically meaningful Phase II data would create value for our stakeholders from two perspectives. First, it would demonstrate that our neural stem cells have a therapeutic and commercial potential in at least one specific indication. And secondly, it was substantially enhanced confidence in our stem cell based platform for the treatment of other central nervous system disorders. When I joined the company we have two Phase II clinical programs underway. One for the treatment of spinal cord injury and one for the treatment of geographic atrophy, the most advanced form of dry age related macular degeneration, the leading cause of blindness in the elderly patients. These diseases indication represents a large unmet medical need both are multibillion dollar opportunities. However, we felt that it would be extremely difficult fully fund and resource these two programs given our current market valuation, the state of the financial markets, and the challenges of raising capital for generative medicine companies in general. Furthermore, we believe that running two programs if sub optimally resourced and finance could significantly increase the risk of delaying the completion of both studies and jeopardize our key strategic objective of achieving a value inflection point within the next two years. For these reason we believe it was in our stakeholder’s best interest to fully focus our resources on one program only. Based on the consideration of the scientific rationale, available clinical data, current clinical status, potential time lines and probability of success of our two programs, we decided that the best approach forward was to focus our efforts on our program in spinal cord injury in order to increase our confidence that we will successful deliver convincing Phase II proof of concept clinical data from our Pathway Study by the end of 2017. With this, we made a difficult decision to suspend enrollment in the Radiant Study of Phase II study in AMD even though we will continue to follow the patients already transplanted. As you probably saw following this decision to focus on spinal cord injury we undertook a careful evaluation of our organization and staff and we restructured to create a company with a laser like focus on A, completing the Pathway Study as soon as possible, and by no later in the end of 2017 and B, insuring that we have a process for producing the cells that will support moving into a Phase III program as quickly as possible following a successful completion of the ongoing Pathway Study. By doing this we expect to reduce our cash requirements to achieve this key value inflection point by $20 million. With our efforts totally focused on spinal cord injury we are now well-positioned to generate convincing proof of concept data within the next 24 months, a critical value creating milestone in the company’s history. As a reminder, the Pathway Study is a study in patients with chronics cervical spinal cord injury that is design to evaluate the effects of our neural stem cells on upper extremity motor strength function and improvements in motor level of injury. All patients enrolled in this study are in the chronic phase of injury. In other words, patients who are between four and 24 months post injury. The Pathway Study has three cohorts. Cohort 1 is an open label cohort that enrolled six patients with motor completes spinal cord injury. Cohort 2 is a single-blinded 1:1 randomize control cohorts in 40 motor complete patients. Cohort 3 which can be initiated at our discussion is an open-label cohort in six motor incomplete patients. Treated patients are transplanted with our neural stem cells above and below the level of injury and are then allowed – and then followed for one year of post-transplant. Motor function is assessed of baseline and three, six, nine and 12 months post-transplantation using two scales. First, the International Standards for Neurological Classification of Spinal Cord Injury known as the ISNCSCI, and second the Graded Assessment of Strength Sensibility and Prehension known as GRASSP. These are two independent and complementary scales. The ISNCSCI assess its upper motor strength using five key muscles and also assesses the neurological level of injury. The GRASSP accesses upper motor strength using 10 key muscles, but also measures upper extremity dexterity and fine motor skills. The primary purpose of Cohort 1, the open label cohort which together an initial read on the safety of transplanting cells into the cervical cord above and below the level of injury and to select the highest dose for using the second cohort of the study. Cohort 1 would also permit us to get some early read [ph] on efficacy that could help optimize the design and selection of endpoints for Cohort 2. In Cohort 1 two patients received 15 million cells, two received 30 million cells, and two received 40 million cells. All doses were safe and well-tolerated and the 40 million cell dose was selected for using Cohort 2. In November of last year we reported the six months data from the six patients in the open label Cohort 1. It’s important to note that these six patients entered the study between 10 and 23 months after injured, a time period well beyond when most spontaneous recovery would have occurred. The efficacy measure showed that five of the six patients had improvement of upper motor strength. Four of these five patients also showed a meaningful improvement in test of dexterity as determined by GRASSP. Four patients had an improvement in the unilateral motor level of injury of at least one level as assess by the ISNCSCI. The improvements in upper motor strength and dexterity observed to Cohort 1 patients, a significantly different from what would be expected based on what we know about the natural history of the condition. The natural history data would suggest that for patients 10 to 23 months post-injury that were enrolled in the study, only 10% would be expected to show any meaningful improvement in motor function. In other words, no more than one patient in a group of six versus the five patients for which we actually demonstrated a meaningful improvement, we believe that these data not the first to ever show a therapeutic effect of a cellular intervention on motor function and chronic cervical spinal cord injury. Previously in the company’s spinal cord program we reported last May the result of our study in chronic thoracic spinal cord injury. This Phase I/II study enrolled 12 patients with either complete AIS A spinal cord injury or incomplete AIS B spinal cord injury. Seven of the 12 patients showed improvements in sensory function to multiple segments below the level of injury as access by Pinprick, light touch, electrical or thermal stimulation. Indeed two of the patients converted from complete to incomplete spinal cord injury. These clinical changes were first seen at three months post transplantation and were sustained or even enhanced to 12 months post transplantation. The incomplete patients had a somewhat better response than the patients with complete spinal cord injury. These results are particularly exciting because the patients enrollment study were four to 24 months post injury and are not expected to show any significant degree of spontaneous sensory recovery. These are the first and only data generated showing a clinical improvement in patients with chronic thoracic spinal cord injury after cellular transplantation. Furthermore, the treatments in the study were safe and well tolerated. Looking forward with our new laser focus on spinal cord injury we can expect several key milestones and news flow events over the next 18 to 24 months. First the Pathway Study is well underway and we are enrolling patients into Cohort 2, the single-blind randomized cohort. Currently, we have 13 sensors in the U.S. and Canada that are actively enrolling patients. We have now enrolled nearly half of the 40 patients required. We are planning to complete the enrollment of all 40 patients by the end of Q3 this year. Second, we will have the 12 months data from the open label Cohort 1 patients by the end of Q2, 2016. Third, we plan to have a blinded interim analysis for Cohort 2 patients in the second half of 2016. The interim analysis is currently based on a superiority threshold and is planned to be performed when approximately half of the patients in Cohort 2 have completed their six months evaluations. We are still targeting to release final data for the Pathway Study in the second half of 2017. While our very clear focus is on driving towards completion of the Pathway Study with final data expected by end of 2017, we also have an initiative to maximize the value of other assets through either partnering or strategic transactions. In this regard, we have two assets that we are attempting to leverage. First, our AMD program, to test our proprietary human neural stem cells in patients with retinal diseases and second, our program to create genetically modified human neural stem cells as a potential therapeutic. First in our AMD program, we reported last June, clinical data from our Phase I/II study in geographic atrophy, the most advanced form of dry AMD. It’s important to recognize that this fist clinical trial was designed to demonstrate safety and many of the patients enrolled in the study were very advanced in the disease progression. These patients have very large and complex lesions and as such are enough patients that would be enrolled into a study focused on efficacy. The data from our Phase I/II study shows that the sub-retinal transplantation of our neural stem cells was safe and well tolerated. In addition, the data showed that in a subset of patients with GA lesions that would have met the criteria established for entry into the efficacy focused Phase II Radiant Study, these patients showed a substantial rate of reduction of the growth of geographic atrophy in the treated eye versus the fellow eye. Because of reduction in the rate of growth of geographic atrophy is considered to be an approval endpoint, these were indeed very encouraging data, which for us supported moving forward with Radiant Study. Furthermore, 11 of the patients from the Phase I/II study enrolled in a long-term follow-up study and outcomes continued to be collected in these patients. Data from this long-term follow-up continue to suggest a beneficial effect of our neural stem cells in terms of slowing the rate of geographic atrophy, which appears to be maintained at least for up to two years. We are also starting to see some very interesting indication of an improvement in visual acuity in the treated eye as compared to the untreated eye, as we examine the longer term outcomes. In relation to this, we now have evidence that in pre-clinical models, sub-retinal transplantation of our neural stem cells results in proliferation of the retinal pigment epithelial cells, which could represent an important regenerative mechanism of action. This is a novel finding that we are presenting for the first time today and which could have a very important implications for the treatment of geographic atrophy. These data will be presented in detail at an upcoming scientific conference. As stated previously, dry AMD is an area of major unmet medical need because we have already generated preliminary data showing safety and evidence of efficacy in our Phase I/II study in dry AMD, we are currently in discussions with potential partners about how best to advance on monetizing this asset. The second major asset that we want to partner is gene modified neural stem cells. We have been able to demonstrate that we can stably gene modify ourselves so that they are able to deliver specific neurotrophic factors and other key proteins while still retaining all their properties to self renew, engraft, migrate and differentiate into neurons, astrocytes and oligodendrocytes. As such, this creates a cellular platform with a proven safety profile for pursuing a gene therapy approach for the treatment of serious disorders of the central nervous system. This could encompass the modification of cells to produce enzymes that are known to be deficient and the cause of various often diseases related to lysosomal storage disorders and leukodystrophies. All modification of the cells to produce neurotrophic factors for the treatment of neurodegenerative diseases such as Alzheimer’s, Parkinson’s and Huntington’s and various disorders of the eye. Along these lines, you may recall that we have previously conducted studies with our neural stem cells in patients with advanced Battens disease. This disease is caused by deficiency in an enzyme palmitoyl protein thioesterase 1, PPT-1. Our cells modified to produce PPT-1 could provide a major therapeutic improvement over the unmodified cells for treating this fatal inherited disorder. To conclude, I summarize the current state of the business as follows. Stem cells now has data in spinal cord injury from two clinical studies with 18 patients, showing a therapeutic benefit, both in patients with chronic thoracic spinal cord injury and patients with chronic cervical spinal cord injury. We believe this is the world’s first clinical program involving cellular transplantation that is showing a clinically therapeutic effect on chronic spinal cord injury patients. Our Phase II Pathway Study in chronic cervical spinal cord injury is well designed to generate robust proof-of-concept data by the end of 2017. Enrollment is taking place at 13 sites in the U.S. and Canada and nearly half of the required 40 patients in Cohort 2 have been enrolled to date. We believe strongly the statistical significant data from Cohort 2 of Pathway, confirming the improvements in motor function we saw at six months in the open-label Cohort 1, would be transformative for the company in the field of spinal cord injury. Based on the scientific and clinical strength of the spinal cord injury program and the interest in focusing company resources, at the end of last year we made a strategic decision to focus all our development efforts on our more advanced program. We have therefore, suspended patient enrollment in our Phase II Radiant Study in the AMD Program and this reduces our cash burn to the completion of the Pathway Study by over $20 million. Meanwhile, we are in active discussions with partners, both with the AMD Program and our genetically modified neural stem cells. And both of these opportunities provide the potential for bringing non-dilutive capital into the company. Given our growing clinical data, our recent operational changes and our laser-light focus on spinal cord injury, we feel increasingly confident in our ability to execute our plan between now and release of statistically meaningful Phase II data in 2017. I will now turn the call back to Greg.

Thank you, Ian. Today, I’m going to speak mainly to the full year 2015 results and if there are specific questions you have about Q4, we can cover those in the Q&A session. For 2015, total revenue was down year-over-year, total of approximately $895,000. In 2014, we had a milestone payment of approximately $500,000, which was received under a licensing agreement with Reneuron Ltd and in connection with our divestiture of the SC Proven business, a licensing fee of approximately $400,000 from licensing agreements entered into with Takara Bio Inc. Licensing revenues received in 2015 were not significant. Operating expenses were up year-over-year by approximately 15%, or about $4.9 million. This increase was driven primarily by expanded clinical activities, supporting both our Phase II study in cervical spinal cord injury, as well as costs associated with our Phase II AMD Study, prior to our decision to suspend enrolling patients into that study. In addition, there were approximately $392,000 of expenses incurred to wind down some operations as part of our efforts to focus solely on our spinal cord injury program. Similarly, loss from operations increased by approximately 19%, or approximately $5.8 million. For the full year 2015, we reported approximately $305,000 in net other expense below the operating line. This was primarily comprised of approximately $914,000 of income associated with the change in the fair value of our warrant liability, $239,000 of expense associated with impairment of intangible assets and approximately $370,000 of interest and other expense. The change in the fair value of our warrant liability was a non-cash income item driven by a change in the value of our stock price. Just a reminder, under warrant liability accounting an increase in share price leads to an increase in the warrant liability, while a decrease in share price leads to a decrease in warrant liability. Changes in warrant liability are path of the statement of operations as income or expense. For the full year 2014, we reported approximately $1.4 million in net other expense below the operating line. This was comprised of approximately $2.4 million of income associated with the change in the fair value of our warrant liability, approximately $2.4 million of expense associated with the impairment of goodwill and other intangible assets associated with the disposition of our SCI proven business and approximately $1.3 million of interest and other expense. We’ve reported a net loss from continuing operations of $0.38 per share in 2015 for an aggregate net loss from continuing operations of approximately $36.4 million. In 2014, we reported a net loss from continuing operations of $0.52 per share or approximately $32.3 million. Given the number of substantial non-cash charges flowing through our P&L in 2014 and 2015, we believe that is useful to look at non-GAAP loss adjusted for the major non-cash charges including stock-based compensation, depreciation and amortization, impairment of intangible assets and changes in the fair value of warrant liability. We have therefore included reconciliation for table for these adjustments in our press release issued yesterday. For 2015 the company had net non-cash expenses totaling approximately $4.7 million. This consists of approximately $4.2 million associated with stock-based compensation, approximately $1.1 million associated with depreciation and amortization and approximately $200,000 associated with the impairment of goodwill and other intangibles, and approximately $914,000 of income associated with the change in the fair value of the warrant liability. For 2014, the company had non-cash expenses totaling approximately $3.4 million and this consist of approximately $2 million associated with stock-based compensation, approximately $1.3 million associated with depreciation and amortization, approximately $2.4 million associated with the impairment of goodwill and other intangibles, and income of approximately $2.4 million associated with the change in the fair value of our warrant liability. The non-GAAP net loss excluding the non-cash items detailed previously for the full year 2015 was approximately $31.7 million or $0.33 per share, compared to the full year 2014 of approximately $29.4 million or $0.48 per share. The increase in the adjusted net loss of approximately $2.3 million was primarily associated with the increased spending associated with our clinical programs. Our cash usage for the full year 2015 excluding cash inflows from financing and licensing activities was approximately $37 million or approximately $3 million per month. Our yearend cash and cash equivalents including restricted cash were approximately $14.5 million. Our pro forma yearend cash number including the recent financing was approximately $22 million. Looking forward, our net cash usage is expected to decrease as we focus all of our resources on our spinal cord injury program and supporting activities. Over the next two years we expect to spend approximately $50 million. Spending will be higher in 2016 as we expect to complete enrollment and transplant all of the patients in our Phase II Pathway Study in spinal cord injury of this year. We would expect to see the expenses split about 60% or $30 million in 2016 and 40% or $20 million in 2017. I’d now like to discuss the capital markets and our most recent financing. Last year was very challenging for Microcap Companies and even more challenging for regenerative medicine companies. Valuations for regenerative medicine companies are at all time lows. This is why we decided to suspend enrollment in our AMD Phase II study. Earlier this month we completed an $8 million financing. This brought in some very critical capital to the company and we’re pleased to be able to raise this necessary capital today, despite the very challenging capital market conditions. We structured the financing with a short-term warrant component which expires 24 months after issuance. This will hopefully bring in an additional $4 million over the next two years. Given that we started the year with a pro forma cash balance of approximately $22 million, we require approximately $28 million of additional cash to complete our study. We hope to bring in non-dilutive capital over the next two years reducing our complete reliance on the equity capital markets to raise this addition of capital. It is very disappointing that the capital markets have not been recognized in the company’s clinical progress we have made or the clinical potential for its therapeutic platform. We’ve seen strong industry recognition this year. StemCells Inc receive the Buzz of BIO award this year for example. This award recognizes the most innovative company in the BioSEC sector that one of the more prestigious industry conferences. StemCells is also currently one of five finalists for the new economy awards most innovative stem cell company. And we’ve recently seen news articles about our Pathway Study in Texas and Pennsylvania. We remained confident that if we continue to execute on our plans and see positive data from a spinal cord injury program, the market will come to see the value proposition presented by StemCells Inc. We will therefore continue to focus on executing on our Clinical programs and communicating our progress. As Ian indicated if the Pathway Study is successful next year we believe that will be a significant value creating opportunity and transformational for our company. Let me now turn the call over to the operator for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Jason Kolbert with Maxim. Your line is now open. Please go ahead.

Hi, guys. Thanks a lot. I’d like to talk a little bit about the spinal study and once you have data and where you are with regulators in terms of what the final approvable Pathway might be. What I mean is do you had any thought or discussions yet based on this data on whether you’re going to require a larger pivotal study to follow this one if you have compelling results?

Hi, Jason, this is Stephen. So these are good questions and very much on our minds right now as we think about the transition from a Phase II study into a pivotal study. I think we’re looking forward to a number of interactions with the FDA in the near term as we think about what a Phase III study and what the pivotal strategy would look like in spinal cord injury. The most important of all that is thinking about the applicable endpoints and we’re learning a lot about that as we acquired the emerging data in our Phase II study, so that’s helping us understand the questions that we’re going to have for the FDA and we’re getting close to the point now because we have some data from our Cohort 1 that’s sort of informing our perspectives on this. So, we’re looking forward to interact with the FDA where we’re going to address those exact questions, Jason.

Thank you, Stephen. And question for Ian, about partnering. There’s obviously been a lot of activity with the Astellas acquisition of OCATA and I know that neuron was recently talking a lot about their eye program, so can you help me understand what the strategy is in terms of BD or how you’re going reach out to these companies for what is a very large unmet medical need in AMD? Thanks.

Yes. So, thank you, Jason. Basically at this point, we are in process of talking to a number of companies, both within the U.S. and outside the U.S. that have potential interest in the anatomic programs. That’s an activity that we are undertaking internally ourselves at this point and we are thinking about whether we need to start to get some other systems in that regard. But as I say, we’ve identified the number of companies that have interest in the anatomic area and those are the companies we are going after at this point.

Okay. And one last question for Greg. I just want to talk a little bit about the guidance and particularly the split between 2017 and 2016. I would assume that the majority of that split is really going to fall on a differentiated R&D line, at the SG&A line or probably be reduced from 2015 and flat, somewhat flattish between ’16 and ’17? Is that fair?

Absolutely. I mean the reason for this substantial reduction in costs year-over-year is the fact that we will enrolled, transplant all of the subjects this year and you adjust to that stage dealing with the ongoing visits to the physician, which are lot lower costs and as well as the manufacturing operations, which will not be as busy next year. And so, SG&A, you are completely in line as they should be predominantly in the R&D.

Okay. Thanks a lot for the very comprehensive update. We really appreciate the guidance in terms of the enrollment and the catalyst and data points coming ahead. Thank you so much.

Thank you, Jason.

Thank you. Our next question comes from the line of Keay Nakae with Chardan. Your line is now open. Please go ahead.

Yes. Thanks. With respect to Pathway, how close are you to adding any additional sites and just could you speak qualitatively about the pace of enrollment over the last couple of months?

So, our target was somewhere between 13 and 15 active sites in North America, with the majority of those sites being in the U.S. But potentially two sites in Canada. We are very close to activating the final center in Canada. We don’t have immediate plans to go beyond the 13 to 15 sites that we have targeted in total for the study, we think that will be adequate to support our enrollment targets. And with respect to the second part of your question, enrollment is variable at different sites depending upon different times of the year. There is always variables that impact that activity, particularly around the holiday season. But we are very pleased with the enrollment rates that we are seeing and the support that all the sites are giving us for the study so far.

Okay. And second question related to the potential partnering opportunities. Obviously, it’s always difficult to predict when you might be able to finalize something you like that. But I will ask the question anyway. Given your future capital needs, how quickly could you put something like that in place?

Okay. I think, as you say, it’s very difficult to give a specific on timing. When you start dealing with partnering activity, you can think if it would akin to relationship or marriage. And one partner can be extremely motivated but it takes two to close a deal and you don’t know exactly where the other site is sitting and tell you, has the deal close? From that standpoint, we had active discussions. We are excited about some of the dialogues we are underway and having the discussions around. AMD Program is certainly the large asset that we are focusing in on, although we are extremely excited on the recent findings that we’ve had on the ability to gene modify the cells and are having some discussion on that side as well. But I think in terms of giving a specificity on timing, I just don’t think that’s something you can’t do because you just don’t know in teller, dealer side.

Okay. Very good. Thanks.

Thank you. Our next question comes from the line of Ed Woo with Ascendiant Capital. Your line is now open. Please go ahead.

Yes. Thank you for taking my question. Going back on Keay’s question about enrollment, how has it been versus your expectations on the Cohort 2?

Yes. So, we are covering the ground here in terms of our intervention and the timing for that in the patient’s course of recovery. So, most spinal cord injury studies are targeting patients in the acute or very early after the spinal cord in-cell. So, you have a better sense of the number of patients in the prevalence there, which are giving the patient population that’s now emerged from that acute hospitalization are in the chronic stage of their disease or their other injury. When I think about the enrollment in that context, it’s really very much projections based upon the number of patients that these centers get and what you think the total denominator of the available patients are that we are particularly seeking, which are cervical patients that have a very specific area of injury. When we calculate all that, then you get to a certain projection level and we started this about two and a half years ago as we thought about the Phase II. And it turns out that we are pretty close to what our projections were. So, I’m pleased that our back of the envelope calculation as best we could for a trial that’s never been and conducted before in patients at that stage of injury is actually showing very, very close alignment with our projections.

Great. What about the extent of the injuries and the types of injuries you have, the patients that you have already enrolled? Was that also matching with your expectations?

Yes. We recognized that. Again, not having a lot of data in particular patients that we are seeking, which are the cervical patients who have AIS B status, and AIS B status is a patient who’s motor complete but sensory incomplete. And that’s a better patient population to think about a regenerative approach because you know that there is sufficient continuity of the spinal cord function that crosses the epicenter of the area of injury. When we started the study, we weren’t certain about the prevalence and level of interest and availability of that particular patient population. And as the study has gotten underway, we have been very reassured by in fact that these patients are interested in doing this study. They will have safety when we administer ourselves to that particular group of patients. And I think that for again, from a regenerative potential is very exciting. So, I have been pleased with the population that we targeted and their availability based upon what we would have predicted when we began the study, began planning the study a number of years ago.

Great. Well, thanks for answering my questions and wish you best of luck.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Yi Chen. Our next question comes from the line of Yi Chen with H.C. Wainwright. Your line is now open. Please go ahead.

Hi. Thank you for taking my question. Could you give us the updated outstanding shares -- outstanding common shares and the outstanding warrants currently?

On that one, in terms of the whole GAAP table, with the ones that we just issued, I’m going to apologize. I don’t have that one right in front of me. I will get that to you via email. I apologize. I just don’t have that one right in front of me.

That’s all right. Thank you.

Thank you. We have follow-up questions from the line of Jason Kolbert with Maxim. Your line is now open. Please go ahead.

Stephen, you now have a lot of time to really think about what’s happening mechanistically with the cells and I’m very interested into -- in the time when you are planting the cells. And it is unusual because you are planting them -- in planting them several months after the initial injury. But before you get into that chronic scoring, I’m just wondering if you think there might be utility if you were to implant them earlier and if you could just talk a little bit about what you think the cells are actually doing in these stations.

So, a lot of what has formed our thoughts about the timing is based upon the pre-clinical data that we have in the animal model, indicating that application of the cells at times points beyond the acute in-cell are probably more advocatious. And in many ways that makes biological sense because the acute injury is associated with a lot of inflammatory changes in the cord, a lot of [Indiscernible] a lot other mechanical insults of the cord, which ultimately is not a very good environment to place neural stem cells. So it’s a much more hostile environment if you will. So, a lot of this was directed to that as a result of our pre-clinical research. The other aspects of it from a clinical perspective are that these patients have acute injuries. From a medical perspective, they are better candidates for surgery and transplantation once they have recovered from the acute in-cell. And then the final aspect is that statistically, if you intervene in patients soon after injury, you are then challenged by the spontaneous rate of recovery that those patients can have and the further you are from injury, the lower that rate becomes and so an intervention is going to be able to detect the efficacy signal much better in patients who have plateaued neurologically. So, I think those are the aspects that are all aligned for us to think about patients at least no earlier than four months after injury. If you add into that the fact that patients and particularly, ASIA B patients do have a degree of recovery because of their continuity. We know that’s a better regenerative window in which to apply for the cells. And so that’s why we extended the window after 24 months, particularly for patients who have incomplete motor or incomplete entry status.

Stephen, I think that….

Sorry. Go ahead. Yes. Sorry. And the last part of your question about mechanism of action. I think we are still led by what we have seen in the animal model, which is at the cell after it’s transplanted as a neural stem cell, differentiates into two main cellular types. One is the oligodendrocytes, which is responsible for the myelin or the insulation around axons. The other are neurons. And so it’s not hard to imagine that the mechanism is most likely multifaceted and that the cell can not only become a neuron, which can replace or augment central gray function of the chord where all the circuitry is but as well, myelinated axons or tracts that have been dramatically demyelinated by the injury. And I would venture to say that not every injury is exact in each patient. When you look at the MRIs you see variability and I suspect that variability is true at the cellular level as well. So the fact that the neural stem cells can interpret the environment and provide more than one mechanism of action is a good thing when you are looking at patients who have these types of injuries. Could there be mechanisms of actions that are beyond cell replacement? I think there could be. We know, just in general properties, the cell has immunomodulatory components. There is also trophic factors that are supported by the cells. So at the end of the day, we don’t know. But as we study more patients, we might have a better sense of what the mechanism is and that’s obviously the purpose of our clinical program.

And you could imagine what I’m thinking if this spinal trial was successful and I think we can see evidence that there are signals already. And when you talk about the potential to remyelinate some of those FRET connections in the circuit, the potential for indications beyond SCI in areas like MS, might start to look attractive to you. Are you kind of thinking the same thing?

Yes. And I think it’s a very good point and many of our strategies have involved showing some type of clinical effect in human disorder. Some of them were more rare. Obviously, spinal cord injury, AMD are larger unmet needs. But if you can show, statistically different outcomes that speak to efficacy in any of these patient populations then I think that proves the point if you will that neural stem cells transplantation can have a therapeutic effect, particularly for something like spinal cord injury. And then I think that would really support, thinking about this and again in other indications where either myelination or neuron replacement might be important. So it very much is a proof-of-concept that could well apply to other disorders and that’s why we think it could be transformational for the company.

Absolutely. Thank you so much for the update.

Thank you.

Thank you. I’d like to thank you for joining us earlier this morning for our quarterly call. And I look forward to updating you on our progress as the year progresses.