SEC Form 3

FORM 3

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

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1. Name and Address of Reporting Person* OCONNELL DESMOND H JR (Last) (First) (Middle) 3155 PORTER DRIVE (Street) PALO ALTO CA 94304 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 01/10/2007	3. Issuer Name and Ticker or Trading Symbol STEMCELLS INC [ STEM ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Option to Purchase	01/09/2008(1)	01/09/2017	Common Stock	20,000	3.43(1)	D

Explanation of Responses:

1. Non-employee directors receive an option for 20,000 shares of the Company's common stock on appointment to the Board of Directors. The option vests one third on each of the first three anniversaries of each such option, and has a strike price equal to the closing price of the stock on the date of appointment. Mr. O'Connell became a member of the Board on January 10, 2006; the closing price of the stock was $3.44 on that date.

Remarks:

	Desmond H. O'Connell, Jr. by Iris Brest, Attorney-in-Fact	01/10/2007
	** Signature of Reporting Person	Date
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 5 (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).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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	POWER OF ATTORNEY

       Know all by these presents that the undersigned
hereby constitutes and appoints each of Iris Brest,
George Koshy, and Martin McGlynn, signing singly, the
undersigned's true and lawful attorney-in-fact to:

(1)	execute for and on behalf of the undersigned, in
the undersigned's capacity as an officer and/or
director of StemCells, Inc. (the "Company"), Forms 3,
4, and 5 in accordance with Section 16(a) of the
Securities Exchange Act of 1934 and the rules thereunder;

(2)	do and perform any and all acts for and on behalf
of the undersigned which may be necessary or desirable
to complete and execute any such Form 3, 4, or 5 and
timely file such form with the United States Securities
and Exchange Commission and any stock exchange or similar
authority; and

(3)	take any other action of any type whatsoever in
connection with the foregoing which, in the opinion of
such attorney-in-fact, may be of benefit to, in the best
interest of, or legally required by, the undersigned,
it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant
to this Power of attorney shall be in such form and shall
contain such terms and conditions as such attorney-in-
fact may approve in such attorney-in-fact's discretion.

       The undersigned hereby grants to each such attorney-
in-fact full power and authority to do and perform
any and every act and thing whatsoever requisite, necessary,
or proper to be done in the exercise of any of the
rights and powers herein granted, as fully to all intents
and purposes as the undersigned might or could do if
personally present, with full power of substitution or
revocation, hereby ratifying and confirming all that such
attorney-in-fact, or such attorney-in-fact's substitute or
substitutes, shall lawfully do or cause to be done by virtue
of this power of attorney and the rights and powers herein
granted.  The undersigned acknowledges that the
foregoing attorneys-in-fact, in serving in such capacity at
the request of the undersigned, are not assuming, nor is the
Company assuming, any of the undersigned's responsibilities
to comply with Section 16 of the Securities Exchange Act of 1934.

       This Power of Attorney shall remain in full force and
effect until the undersigned is no longer required to
file Forms 3, 4, and 5 with respect to the undersigned's
holdings of and transactions in securities issued by the
Company, unless earlier revoked by the undersigned in a
signed writing delivered to the foregoing attorneys-in-fact.

       IN WITNESS WHEREOF, the undersigned has caused this
Power of Attorney to be executed as of this
22 day of December, 2006.

	___/s/_________________________________
	Signature

	Desmond H. O'Connell, Jr.
	Print Name