Five senior executives at StemCells Inc (NASDAQ:STEM) have resigned from their positions following a merger deal between the company and an Israeli firm known as Microbot Medical Ltd.
The StemCells executives that resigned include the company’s CEO, CFO, and three directors. The resignations from the five executives came on the same day of the merger which caused a significant rise in the value of the company’s shares. The board of directors for StemCells unanimously approved the merger between the two firms on Monday. Three members of the board resigned as soon as the announcement was made and leaving a team of three board members to continue leading the firm.
A SEC filing from the company indicated that none of the members resigned due to any form of disagreements with the company. The reverse merger is also a significant deal for StemCells Inc because it marks a new lease of life for the firm. StemCells was planning to wind up due to lack of enough finances prior to the opportunity for a merger. Investors from Microbot claim that they will offer a financial incentive of $4 million to StemCell as part of the merger. The filing stated that the funding should be enough to fuel the company’s operations for roughly one and a half years once the deal is closed.
Ian Massey, the resigning chief executive officer is expected to receive $216,667 while exiting CFO is expected to receive a one-time payment of $187,500. The merger will allow the two firms to create medical devices based on robotics. These devices will be used to address medical conditions such as gastrointestinal and cerebrospinal fluid disorders. StemCells has been attempting to create a stem cell platform technology that will be used to treat diseases of the central nervous system. The company had announced in May that it was planning to shut down its operations due to lack of funding. The announcement also revealed that employees would lose their jobs.