SACRAMENTO (AP) – California’s $3 billion stem cell agency began awarding its first research grants Friday despite legal challenges that put its future in doubt.

“This is really a historic and important occasion for us,” said Zach Hall, interim president of the California Institute for Regenerative Medicine.

The identity of recipients of the first two grants, totaling $7.3 million over three years, wasave prevented it from borrowing the $3 billion in bond money that voters authorized in November.

A $5 million charitable donation from sound pioneer Ray Dolby and a $3 million loan from the state have kept the agency afloat and enabled it to hire staff and open a permanent headquarters in San Francisco.

But the agency’s accountants warn it will run out of money by May without another cash infusion.

On Friday, Robert Klein, the chair of the 29-member committee that oversees the agency, said he’s secured “bridge funding,” but didn’t offer any details about the interim financing plan.

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