Sec Form 4 Filing - Stratton Kenneth Blair @ STEMCELLS INC - 2015-12-29

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person Stratton Kenneth Blair 2. Issuer Name and Ticker or Trading Symbol STEMCELLS INC [ STEM] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) General Counsel (Last) (First) (Middle) C/O STEMCELLS, INC., 7707 GATEWAY BLVD, STE 140 3. Date of Earliest Transaction (MM/DD/YY) 12/29/2015 (Street) NEWARK, CA94560 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 12/29/2015 S 104,549 D $ 0.4512 ( 1 ) 556,525 ( 2 ) D Common Stock 36,081 I By 401(k) Plan ( 3 )

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Stratton Kenneth Blair C/O STEMCELLS, INC. 7707 GATEWAY BLVD, STE 140 NEWARK, CA94560 General Counsel Signatures /s/ Kenneth B. Stratton 12/30/2015 Signature of Reporting Person Date

Explanation of Responses:

( 1 )The $0.4512 per share price was the weighted average price of open market sales by Mr. Stratton on 12/29/2015. Actual prices ranged from $0.4411 per share to $0.4699 per share. Mr. Stratton will provide full information about the number of shares sold at each price, upon request by the SEC, the issuer or any security holder of the issuer. ( 2 )Includes (1) 140,000 restricted stock units, with 70,000 of these vesting on each of May 24, 2016 and May 24, 2017; (2) 32,500 restricted stock units vesting on January 27, 2016; (3) 240,000 restricted stock units, with 80,000 of these vesting on each of January 8, 2016, January 8, 2017 and January 8, 2018; and (4) 80,000 restricted stock units with performance based vesting. ( 3 )Shares held in 401(k) account, in accordance with issuer's employer-match policies.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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