Neuralstem, Inc. (Form: SB-2/A, Received: 06/21/2006 16:56:26)

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

NEURALSTEM

(Incorporated under the laws of the State of Delaware on February 28, 2001)

Neuralstem, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST : The name of the corporation is; Neuralstem, Inc. ("Corporation"').

SECOND : The Certificate of Incorporation of the Corporation, as amended, is hereby amended by striking out Article IV, Paragraph A thereof and by substituting in lieu of said Article IV Paragraph A the following new Article IV Paragraph A:

The total number of shares of capital stock which the Corporation shall have authority to issue is Eighty-Two million (82,000,000) shares consisting of Seventy-Five Million (75,000,000) shares of Common Stock, par value one cent ($.01) per share and Seven Million (7,000,000) shares of Preferred Stock, par value One cent ($.01) per share."

THIRD: This amendment has been consented to and authorized by the holders of a majority of the issued and outstanding stock entitled to vote ^. by written consent given in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

FOURTH: This amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, this corporation has caused this Certificate of Amendment to be signed by I. Richard Garr, its Chief Executive officer, the 27 day of June 2005.

CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATIONS OF

SERIES C PREFERRED STOCK

NEURALSTEM, INC.

NEURALSTEM. INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the” DGCL” ^), DOES HEREBY CERTIFY THAT:

FIRST: The name of the corporation is NEURALSTEM, INC. (the "Corporation")

SECOND: This Certif _i cate of Amendment (this "Certificate of Amendment”) to Certificate of Designations” of Series C Preferred Stock of the Corporation (the “Certificate of Designations”) has been duly approved by the Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the DGCL.

THIRD: The holders of a majority of the Corporation's Series C Convertible Preferred Stock, par value $0.01 per share waived notice of the time, place and purpose of special meeting of the stockholders and duly approved this Certificate of Amendment by written consent in accordance with Sections 228 and 242 of The DGCL.

FOURTH: The Certificate of Designations of the Corporation is hereby amended by striking out the second paragraph thereof and by substituting in lieu of said second paragraph the following new paragraph:

"RESOLVED, that of the 7,000,000 shares of Preferred Stock authorized to be issued by the Company, 4,600,000 of such shares are hereby designated as Series C Preferred Stock, per value one cent ($0.01) per share (such series being hereinafter called the "Series C Preferred”), and the designation, preferences. qualifications, privileges, limitations, options, conversion rights and other special rights, in addition to those set forth in the Company's Certificate of Incorporation, as amended, of the Series C Preferred are hereby fixed as follows:"

FIFTH: The Certificate of Designations of the Corporation is hereby amended by adding the following section as a new Section 4(i)(iv)(7) immediately following Section 4(i)(iv)(6) of the Certificate of Designations:

"(7) shares of Common Stock and/or options, warrants or other Common Stock purchase rights (and the Common Stock issued pursuant to such options, warrants or other rights) issued pursuant to agreements approved by holders of at least a majority of the outstanding shares of the Series C Preferred

IN WITNESS WHEREOF. Neuralstem, Inc. has caused this Certificate ^. of Amendment to be executed by 1. Richard Garr, its President and Chief Executive officer. this 27 day or June, 2005.

NEURALSTEM, INC.

The Undersigned President of Neuralstem, Inc, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows;

I. The name of the Corporation is Neuralstem, Inc.

II. The date the Corporation filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware was February 28, 2001.

III. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”) . The written consent of the stockholders of the Corporation was obtained pursuant to Section 228 of the DGCL.

IV. Effective as of the date and time this Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, every ten (10) shares of the Company’s Common Stock outstanding shall be combined into three (3) shares of Common Stock described herein (the "Reverse Split”). No fractional shares of Common Stock shall be issued in connection with the Reverse Split. All shares of Common Stock s0 combined that are held by stockholder shall be aggregated subsequent to the foregoing Reverse Split. In lieu of any interest in a fractional share of Common Stock resulting from such aggregation, the Company shalt pay a cash amount to such stockholder equal to the fair value of such fractional share (as determined in good faith by the Board of Directors), rounded up to the nearest whole $0.01.

V. The text of the Certificate of Incorporation is hereby amended and restated in entirety to read as follows:

The name of this corporation is Neuralstem, Inc.

The address of the registered office of the corporation in the State of Delaware is 1209 Orange Street, New Castle County, Wilmington, DE. 19801, and the name of the registered agent of the corporation in the State of Delaware at such address is The Corporation Trust Company.

The. purpose of Ibis corporation is to engage in any lawful act or activity for which a corporation may be organized under fiber Delaware General Corporation Law ("DGCL”).

A. The total number of shares of capital stock which the Corporation shall have authority to issue is eighty two million (82,000,000) shares consisting of Seventy five Million (75,000,000) shares of Common Stock, par value one cent ($.01) per share and Seven Million (7.000,000) shares of Preferred Stock, par value one cent ($0.01) per share.

B. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation (voting together on an as-if-converted basis).

C. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized, within the limitations and restrictions stated, in this Certificate of Incorporation, to fix or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock. and the number of shares constituting any such series and the designation thereof, or any of them; and to increase or decrease the number of shares of any series prior or subsequent to the issue of shares of that series, but not below the number of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such a decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

A. The management of the business and the conduct of the affairs of the corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed by the Board of Directors in the manner provided in the Bylaws.

C. The board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation, The stockholders shall also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that in addition to any vote of the holders of any class or series of stock of the corporation required by law or by this Certificate or Incorporation, the affirmative vote of the holders of at least a majority of the voting power or all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the corporation.

A. The liability of the directors for monetary damages shall be eliminated to the fullest extent under applicable law. If the DGCL Is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

B. Any repeal or modification of this Article VI shall be prospective and shall not affect the rights under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

VII

The corporation reserves the right to amend, alter, change or repeal any provision contained in this

Certificate of Incorporation, In the manner now or hereafter prescribed by statute, and all rights conferred

upon the stockholders herein are granted subject to this reservation.

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

The undersigned further affirms, under penalties of perjury, that this instrument is his act and deed or the act and deed of the Corporation and that the facts set forth in this Amended and Restated Certificate of incorporation are true and correct.

WARRANT

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

NEURALSTEM, INC.

Series “B”

Warrant To Purchase Common Stock

Warrant No.: _______

Number of Shares: ________________

Date of Issuance: ______________, 2006

Neuralstem, Inc., a Delaware corporation (the “ Company ”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ___________________ (“Holder”), the registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined herein) __________ (_,_____,____) fully paid and nonassessable shares of Common Stock (as defined herein) of the Company (the “ Warrant Shares ”) at the exercise price per share provided in Section 1(a) below or as subsequently adjusted.

Section 1 . This Warrant is the common stock purchase warrant (the “ Warrant ”) issued pursuant to the Subscription Agreement (“ Subscription Agreement ”) dated the date hereof between the Company and the Holder.

(a) Definitions . The following words and terms as used in this Warrant shall have the following meanings:

(i) “ Approved Stock Plan ” means any employee benefit plan which has been approved by the Board of Directors and stockholders of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director for services provided to the Company at exercise prices of not less than $1.50.

(ii) “ Business Day ” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

(iii) “ Closing Bid Price ” means the closing bid price of Common Stock as quoted on the Principal Market (as reported by Bloomberg Financial Markets (“ Bloomberg ”) through its “Volume at Price” function).

(iv) “ Common Stock ” means (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.

(v) “ Excluded Securities ” means, provided such security is issued at a price which is greater than or equal to the arithmetic average of the Closing Bid Prices of the Common Stock for the ten (10) consecutive trading days immediately preceding the date of issuance, any of the following: (a) any issuance by the Company of securities in connection with a strategic partnership or a joint venture (the primary purpose of which is not to raise equity capital), (b) any issuance by the Company of securities as consideration for a merger or consolidation or the acquisition of a business, product, license, or other assets of another person or entity and (c) options to purchase shares of Common Stock, provided (I) such options are issued after the date of this Warrant to employees of the Company within thirty (30) days of such employee’s starting his employment with the Company, and (II) the exercise price of such options is not less than the Closing Bid Price of the Common Stock on the date of issuance of such option.

(vi) “ Expiration Date ” means the date five (5) years from the Issuance Date of this Warrant or, if such date falls on a Saturday, Sunday or other day on which banks are required or authorized to be closed in the City of New York or the State of New York or on which trading does not take place on the Principal Exchange or automated quotation system on which the Common Stock is traded (a “ Holiday ”), the next date that is not a Holiday.

(vii) “ Issuance Date ” means the date hereof.

(viii) “ Options ” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.

(ix) “ Other Securities ” means (i) those options and warrants of the Company issued prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares of Common Stock issuable on exercise of such options and warrants, provided such options and warrants are not amended after the Issuance Date of this Warrant and (iii) the shares of Common Stock issuable upon exercise of this Warrant.

(x) “ Person ” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(xi) “ Principal Market ” means the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, whichever is at the time the principal trading exchange or market for such security, or the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg or, if no bid or sale information is reported for such security by Bloomberg, then the average of the bid prices of each of the market makers for such security as reported in the “pink sheets” by the National Quotation Bureau, Inc.

(xii) “ Securities Act ” means the Securities Act of 1933, as amended.

(xiii) “ Warrant ” means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

(xiv) “ Warrant Exercise Price ” shall be $2.00 or as subsequently adjusted as provided in Section 8 hereof.

(xv) “ Warrant Shares ” means the shares of Common Stock issuable at any time upon exercise of this Warrant.

(b) Other Definitional Provisions.

(i) Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same may have been or may be amended or supplemented from time to time.

(ii) When used in this Warrant, the words “ herein ”, “ hereof ”, and “ hereunder ” and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “ Section ”, “ Schedule ”, and “ Exhibit ” shall refer to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise specified.

(iii) Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural, and vice versa.

Section 2. Exercise of Warrant .

(a) Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company, pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing with the first day after the date hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date: (i) by delivery of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the “ Exercise Notice ”), of such holder’s election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, payment to the Company of an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the “ Aggregate Exercise Price ”) in cash or wire transfer of immediately available funds and the surrender of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) to a common carrier for overnight delivery to the Company as soon as practicable following such date (“ Cash Basis ”) or (ii) on a “cashless” basis if, at the time of exercise, the Warrant Shares have not been subject to an effective registration statement for a 45 consecutive day period, by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “ Cashless Exercise ”):

Net Number = (A x B) - (A x C)

For purposes of the foregoing formula:

A = the total number of Warrant Shares with respect to which this Warrant is then being exercised.

B = the Closing Bid Price of the Common Stock on the date of exercise of the Warrant.

C = the Warrant Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before the fifth (5th) Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and the receipt of the representations of the holder specified in Section 6 hereof, if requested by the Company (the “ Exercise Delivery Documents ”), and if the Common Stock is DTC eligible, credit such aggregate number of shares of Common Stock to which the holder shall be entitled to the holder’s or its designee’s balance account with The Depository Trust Company; provided, however, if the holder who submitted the Exercise Notice requested physical delivery of any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible then the Company shall, on or before the fifth (5 ^th ) Business Day following receipt of the Exercise Delivery Documents, issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a certificate, registered in the name of the holder, for the number of shares of Common Stock to which the holder shall be entitled pursuant to such request. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (i) or (ii) above the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised. In the case of a dispute as to the determination of the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the holder the number of Warrant Shares that is not disputed and shall submit the disputed determinations or arithmetic calculations to the holder via facsimile within one (1) Business Day of receipt of the holder’s Exercise Notice.

(b) If the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of the Warrant Shares within one (1) day of such disputed determination or arithmetic calculation being submitted to the holder, then the Company shall immediately submit via facsimile (i) the disputed determination of the Warrant Exercise Price or the Closing Bid Price to an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent, outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the holder of the results no later than forty-eight (48) hours from the time it receives the disputed determinations or calculations. Such investment banking firm’s or accountant’s determination or calculation, as the case may be, shall be deemed conclusive absent manifest error.

(c) Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than five (5) Business Days after any exercise and at its own expense, issue a new Warrant identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised.

(d) No fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares issued upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.

(e) If the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within ten (10) days of receipt of the Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit the holder’s balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is entitled upon the holder’s exercise of this Warrant, the Company shall, in addition to any other remedies under this Warrant or the Placement Agent Agreement or otherwise available to such holder, pay as additional damages in cash to such holder on each day the issuance of such certificate for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of Warrant Shares not issued to the holder on a timely basis and to which the holder is entitled, and (B) the Closing Bid Price of the Common Stock for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the holder without violating this Section 2.

Section 3. Covenants as to Common Stock . The Company hereby covenants and agrees as follows:

(a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued.

(b) All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.

(c) During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at least one hundred percent (100%) of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. If at any time the Company does not have a sufficient number of shares of Common Stock authorized and available, then the Company shall call and hold a special meeting of its stockholders within sixty (60) days of that time for the sole purpose of increasing the number of authorized shares of Common Stock.

(d) If at any time after the date hereof the Company shall file a registration statement, the Company shall include the Warrant Shares issuable to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant; and the Company shall so list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of the same class shall be listed on such national securities exchange or automated quotation system.

(e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

(f) This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets.

Section 4. Taxes . The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

Section 5. Warrant Holder Not Deemed a Stockholder . Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

Section 6. Representations of Holder . The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

Section 7. Ownership and Transfer .The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.

Section 8. Adjustment of Warrant Exercise Price and Number of Shares . The Warrant Exercise Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows:

(a) Adjustment of Warrant Exercise Price . If and whenever on or after the Issuance Date of this Warrant, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock which are issued or deemed to have been issued by the Company in connection with an Approved Stock Plan or upon exercise or conversion of the Other Securities) for a consideration per share less than a price (the “ Applicable Price ”) equal to the Warrant Exercise Price in effect immediately prior to such issuance or sale, then immediately after such issue or sale the Warrant Exercise Price then in effect shall be reduced to an amount equal to such consideration per share. Upon each such adjustment of the Warrant Exercise Price hereunder, the number of Warrant Shares issuable upon exercise of this Warrant shall not be adjusted.

(b) Effect on Warrant Exercise Price of Certain Events . For purposes of determining the adjusted Warrant Exercise Price under Section 8(a) above, the following shall be applicable:

(i) Issuance of Options . If after the date hereof, the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange of any convertible securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion or exchange of such Convertible Securities shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option or upon conversion or exchange of any convertible security issuable upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock or of such convertible securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange of such convertible securities.

(ii) Issuance of Convertible Securities . If the Company in any manner issues or sells any convertible securities and the lowest price per share for which one share of Common Stock is issuable upon the conversion or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such convertible securities for such price per share. For the purposes of this Section 8(b)(ii), the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the convertible security and upon conversion or exchange of such convertible security. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such convertible securities, and if any such issue or sale of such convertible securities is made upon exercise of any Options for which adjustment of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b), no further adjustment of the Warrant Exercise Price shall be made by reason of such issue or sale.

(iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at which any convertible securities are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect at the time of such change shall be adjusted to the Warrant Exercise Price which would have been in effect at such time had such Options or convertible securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold and the number of Warrant Shares issuable upon exercise of this Warrant shall be correspondingly readjusted. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible security that was outstanding as of the Issuance Date of this Warrant are changed in the manner described in the immediately preceding sentence, then such Option or convertible security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall be made if such adjustment would result in an increase of the Warrant Exercise Price then in effect.

(c) Effect on Warrant Exercise Price of Certain Events . For purposes of determining the adjusted Warrant Exercise Price under Sections 8(a) and 8(b), the following shall be applicable:

(i) Calculation of Consideration Received . If any Common Stock, Options or convertible securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefore will be deemed to be the net amount received by the Company therefore. If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration received by the Company will be the market price of such securities on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefore will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or convertible securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “ Valuation Event ”), the fair value of such consideration will be determined within five (5) Business Days after the tenth (10 ^th ) day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding. The determination of such appraiser shall be final and binding upon all parties and the fees and expenses of such appraiser shall be borne jointly by the Company and the holders of Warrants.

(ii) Treasury Shares . The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock.

(iii) Record Date . If the Company takes a record of the holders of Common Stock for the purpose of entitling them (1) to receive a dividend or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase Common Stock, Options or convertible securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(d) Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock . If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately decreased. Any adjustment under this Section 8(d) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(e) Distribution of Assets . If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “ Distribution ”), at any time after the issuance of this Warrant, then, in each such case:

(i) any Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date; and

(ii) either (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on a national securities exchange or a national automated quotation system, then the holder of this Warrant shall receive an additional warrant to purchase Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the amount of the assets that would have been payable to the holder of this Warrant pursuant to the Distribution had the holder exercised this Warrant immediately prior to such record date and with an exercise price equal to the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i).

(f) Certain Events . If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Warrant Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the rights of the holders of the Warrants; provided, except as set forth in section 8(d),that no such adjustment pursuant to this Section 8(f) will increase the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant to this Section 8.

(g) Notices .

(i) Immediately upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant, setting forth in reasonable detail, and certifying, the calculation of such adjustment.

(ii) The Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change (as defined below), dissolution or liquidation, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to such holder.

(iii) The Company will also give written notice to the holder of this Warrant at least ten (10) days prior to the date on which any Organic Change, dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to such holder.

Section 9. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or Sale .

(a) In addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “ Purchase Rights ”), then the holder of this Warrant will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(b) Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets to another Person or other transaction in each case which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as an “ Organic Change .” Prior to the consummation of any (i) sale of all or substantially all of the Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the “ Acquiring Entity ”) a written agreement (in form and substance satisfactory to the holders of Warrants representing at least two-thirds (iii) of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to deliver to each holder of Warrants in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and satisfactory to the holders of the Warrants (including an adjusted warrant exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable upon exercise of the Warrants without regard to any limitations on exercise, if the value so reflected is less than any Applicable Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to the holders of Warrants representing a majority of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure that each of the holders of the Warrants will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore issuable and receivable upon the exercise of such holder’s Warrants (without regard to any limitations on exercise), such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of Warrant Shares which would have been issuable and receivable upon the exercise of such holder’s Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on the exercisability of this Warrant).

Section 10. Lost, Stolen, Mutilated or Destroyed Warrant . If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

Section 11. Notice . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of receipt is received by the sending party transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Placement Agent:	T.R. Winston & Company
	1999 Avenue of the Stars, Suite 2530
	Los Angeles, California 90067
	Attention: Tyler Runnels
	Telephone: (310) 229-2139
	Facsimile: (310) 201-2712

With Copy to:	Ellenoff Grossman & Schole LLP
	370 Lexington Avenue
	New York, New York 10017
	Attention: Douglas S. Ellenoff, Esq.
	Telephone: (212) 370-1300
	Facsimile: (212) 370-7889
If to the Company, to:	Neuralstem, Inc.
	9700 Great Seneca Highway
	Rockville, Maryland 20850
	Attention: I. Richard Garr
	Telephone: (301) 366-4841
	Facsimile: (301)

With a copy to:	Dieterich & Associates
	11300 W. Olympic Blvd.
	Los Angeles, CA 90064
	Attention: Chris Dieterich, Esq.
	Telephone: (310) 312-6888
	Facsimile: (310) 312-6680

If to a holder of this Warrant, to it at the address and facsimile number set forth on Exhibit C hereto, with copies to such holder’s representatives as set forth on Exhibit C , or at such other address and facsimile as shall be delivered to the Company upon the issuance or transfer of this Warrant. Each party shall provide five days’ prior written notice to the other party of any change in address or facsimile number. Written confirmation of receipt (A) given by the recipient of such notice, consent, facsimile, waiver or other communication, (or (B) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

Section 12. Date . The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of no effect after the close of business on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of Section 8(b) shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise of this Warrant.

Section 13. Amendment and Waiver . Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the holders of Warrants representing at least two-thirds of the Warrant Shares issuable upon exercise of the Warrants then outstanding; provided that, except for Section 8(d), no such action may increase the Warrant Exercise Price or decrease the number of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant.

Section 14. Descriptive Headings; Governing Law . The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York City, for the adjudication of any dispute hereunder or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

Section 15. Waiver of Jury Trial . AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

Section 16. Company’s Right to Redeem Warrant . Once the shares that would be issued upon exercise of this warrant are subject to an effective registration statement, then this Warrant may be redeemed by the Company, upon thirty (30) days prior within notice (“ Notice Period ”) by the Company, at a redemption price of $.01 per Warrant Share (the “ Redemption Price ”), so long as the following conditions are met:

(a) The Company’s Closing Bid Price for the shares must have been in excess of $4.00 per share for the 20 consecutive days preceding the notice of demand for exercise;

(b) The volume of trading in the Company’s shares must have a daily average minimum over the preceding 10 trading days (preceding the notice of demand) of 100,000 shares per day; and

(c) The registration statement covering the resale of the Warrant Shares shall have remained effective during the entire Notice Period.

Upon notice to the Holder hereof, and only if the conditions have been met, then the Holder will have thirty (30) days in which to exercise the Warrants being redeemed or accept the Redemption Price.

Notwithstanding the foregoing, this Warrant may not be redeemed by the Company if, during the preceding 180 days prior to the Notice Period, the Company has redeemed its Series “A” Warrants which were issued in the same offering as this Warrant.

IN WITNESS WHEREOF , the Company has caused this Series B Warrant to be signed as of the date first set forth above.

	NEURALSTEM, INC.

	By:_________________________________
	Name: I. Richard Garr
	Title: President and Chief Executive Officer

EXHIBIT A TO WARRANT

EXERCISE NOTICE

TO BE EXECUTED

BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

NEURALSTEM, INC.

The undersigned holder hereby exercises the right to purchase ______________ of the shares of Common Stock (“ Warrant Shares ”) of Neuralstem, Inc. (the “ Company ”), evidenced by the attached Warrant (the “ Warrant ”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

1. ___ Cash Exercise

(a) Payment of Warrant Exercise Price . The holder shall pay the Aggregate Exercise Price of $______________ to the Company in accordance with the terms of the Warrant.

(b) Delivery of Warrant Shares . The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of the Warrant.

2. ___ Cashless Exercise

(a) Payment of Warrant Exercise Price . In lieu of making payment of the Aggregate Exercise Price, the holder elects to receive upon such exercise the Net Number of shares of Common Stock determined in accordance with the terms of the Warrant.

(b) Delivery of Warrant Shares . The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

Name of Registered Holder

By:________________________________

Name: __________________________

Title: ___________________________

A-1

EXHIBIT B TO WARRANT

FORM OF WARRANT POWER

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant to purchase ____________ shares of the capital stock of Neuralstem, Inc. represented by warrant certificate no. _____, standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint ______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises.

Dated: ___________________________	_____________________________

	By: ___________________________
	Name: _________________________
	Title: __________________________

B-1

EXHIBIT C TO WARRANT

HOLDER’S ADDRESS

C-1

Delaware		2836		52-2007292
(State of Incorporation)		(Primary Standard Industrial Code No.)		(IRS Employer Identification No.)

Title of Each Class of Securities to be Registered	Amount to be Registered		Proposed Offering Price Per Share			Proposed Aggregate Offering Price		Amount Of Registration Fee
Common Stock		8,088,667	$	1.00	⁽¹⁾	$	8,088,667	$	865.49
Common Stock underlying class “A” warrant		2,508,333	$	1.50	⁽²⁾⁽³⁾	$	3,762,500	$	402.59
Common Stock underlying class “B” warrant		2,508,333	$	2.00	⁽²⁾⁽⁴⁾	$	5,016,667	$	536.78
Common Stock underlying $.50 warrants issued to service providers		1,330,000	$	.50	⁽²⁾⁽⁵⁾	$	665,000	$	71.16
Common Stock underlying $5.00 warrant		1,000,000	$	5.00	⁽²⁾⁽⁶⁾	$	5,000,000	$	535.00
Common Stock underlying Placement Agent Warrant		800,000	$	1.10	⁽²⁾⁽⁷⁾	$	880,000	$	94.16
Total		16,235,333				$	23,412,834	$	2,505.18	⁽⁸⁾

RISK FACTORS	7
FORWARD LOOKING STATEMENTS	16
USE OF PROCEEDS	17
OUR BUSINESS	17
*Our History*	17
*Overview*	17
*The Field of Regenerative Medicine*	18
*Stem Cell Therapy Background*	18
*The Potential of Our Tissue-Derived Stem Cell-Based Therapy*	18
*Potential Markets*	19
*Our Technology*	19
*Business Strategy*	20
*Our Research and Programs*	20
*Our Grant*	21
*Our Intellectual Property Licensed to Others*	21
*Manufacturing*	22
*Products & Marketing*	22
*Our Intellectual Property*	22
*Patents Pending*	23
*Patents Issued*	23
*Competition*	24
*Government Regulation*	25
*Employees*	27
PROPERTIES	27
MANAGEMENT'S DISCUSSION AND ANALYSIS	28
RESULTS OF OPERATIONS	29
LEGAL PROCEEDINGS	34
MANAGEMENT	34
*Audit Committee Financial Expert*	35
*Code of Ethics*	35
EXECUTIVE COMPENSATION	35
*Summary Compensation Table*	35
*Option Grants in Last Fiscal Year*	36
*Compensation of Directors*	36
*Employment Agreements and Change-in-Control Arrangements*	36
PRINCIPAL STOCKHOLDERS	37
TRANSACTIONS AND BUSINESS RELATIONSHIPS WITH	38
DESCRIPTION OF SECURITIES	39
*General*	39
*Common Stock*	39
*Preferred Stock*	39
*Options And Warrants Convertible into Common Shares*	39
EQUITY COMPENSATION PLAN INFORMATION	39
*2005 Stock Plan*	40
MARKET FOR COMMON EQUITY & RELATED STOCKHOLDER MATTERS	40
*Market Information*	40
*Dividend Policy*	40
SHARES ELIGIBLE FOR FUTURE SALE	40
SELLING SHAREHOLDER	42

REGISTRATION RIGHTS	45
PLAN OF DISTRIBUTION	46
TRANSFER AGENT	48
LEGAL MATTERS	48
EXPERTS	48
INDEMNIFICATION OF DIRECTORS AND OFFICERS	48
WHERE YOU CAN FIND MORE INFORMATION	48
FINANCIAL INFORMATION	F-1
INFORMATION NOT REQUIRED IN PROSPECTUS	49
*Indemnification Of Directors & Officers*	49
*Other Expenses of Issuance & Distribution*	49
*Recent Sales of Unregistered Securities*	49
*Exhibits*	52

Medical Condition		Number of Patients ^*

Stroke		5.5 million
Alzheimer’s Disease		4.5 million
Traumatic Brain Injury		1.4 million
Parkinson’s Disease		1 million
Cerebral Palsy		0.76 million
Multiple Sclerosis		0.4 million
Spinal-cord injuries		0.25 million
Amyotrophic Lateral Sclerosis		0.03 million

Number	Country	Filing Date	Issue Date	Expiration Date	Title
97923569.4	EP	05/07/97	Pending	N/A	Isolation, Propagation, and Directed Differentiation of Stem Cell from Embryonic and Adult Central Nervous System of Mammals

2257068	CA	05/07/97	Pending	N/A	Isolation, Propagation, and Directed Differentiation of Stem Cell from Embryonic and Adult Central Nervous System of Mammals

99948396.9	EP	09/20/99	Pending	N/A	Stable Neural Stem Cell Lines

2002-526065	JAP	09/20/99	Pending	N/A	Stable Neural Stem Cell Lines

2343571	CA	09/20/99	Pending	N/A	Stable Neural Stem Cell Lines

10/047,352]	US	01/14/02	Pending	N/A	Stable Neural Stem Cells

10/728,652	US	12/05/03	Pending	N/A	Method for Discovering Neurogenic Agents

2004/053071	WO	12/05/03	Pending	N/A	Method for Discovering Neurogenic Agents

10/914,460	US	08/09/04	Pending	N/A	Use of Fused Imidazoles, Aminopyrimidines, Isonicotinamides, Aminomethyl Phenoxypiperidines and Aryloxypiperidines to Promote and Detect Endogenous Neurogenesis

1576134	EP	12/05/03]	Pending	N/A	Method for Discovering Neurogenic Agents

11/281,640	US	11/17/05	Pending	N/A	Transplantation of Human Cells for Treatment of Neurological Disorders

PCT/US05/41367	WO	11/17/05	Pending	N/A	Transplantation of Human Cells for Treatment of Neurological Disorders

Name	Age	Position

I. Richard Garr	53	Chief Executive Officer, Chief Financial Officer, President, and Director

Karl Johe, Ph.D.	46	Chief Scientific Officer, Chairman of the Board, and Director

Malcolm Currie, Ph.D.	79	Director Elect

			Annual Compensation							Long-Term Compensation Awards
Name and Principal Position	Year		Salary ($)			Bonus ($)		Other Annual Compensation ($)(3)		Restricted Stock Awards ($)		Securities Underlying Options (#)

I Richard Garr Chief Executive Officer		2005	$	240,000	(1 )	$	—	$	27,605	$	—		1,200,000(4	)

Karl Johe Chief Scientific Officer		2005	$	240,000	(2 )	$	—	$	23,070	$	—		1,200,000(4	)

Name	Number of Securities Underlying Options Granted (#)	% of Total Options Granted to Employees in Fiscal Year (1)	Exercise or Base Price ($/sh)		Expiration Date
I. Richard Garr	1,200,000	50 %	$	.50	7/27/2015
Karl Johe	1,200,000	50 %	$	.50	7/27/2015

	Common Stock
Name	Amount		%
Stanley Westreich ⁽¹⁾⁽⁷⁾		4,321,114		16.7	%
Regal One Corporation ⁽³⁾⁽⁹⁾		2,815,287		10.9	%
Karl Johe ⁽⁴⁾		2,084,584		8.1	%
Merrill Solomon ^(5)(10)		2,177,097		8.4	%
Richard Garr ⁽⁶⁾		1,810,084		7.0	%
JMG Capital Partners, LP/JMG Triton Offshore Fund, Ltd ^(7)(11)		2,006,667		7.8	%
Malcolm Currie ^(3)(12)		50,167		*
Directors & Executive Officers as a Group		3,944,835		15.3	%

	(a)		(b)		(c)
	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available or Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders		2,400,000	$	.50		1,600,000
Equity compensation plans not approved by security holders		N/A		N/A		N/A
Total		2,400,000	$	.50		1,600,000

Date	Number of Shares
On the date of this prospectus		14,732,773
Between 90 and 180 days after the date of this prospectus		14,732,773
At various times beginning more than 180 days after the date of this prospectus		11,088,166

	Common Shares Owned Before Sale ⁽¹⁾									Common Shares Owned After Sale ⁽²⁾
	Common Shares Owned Before Sale ⁽¹⁾									Common Shares Owned After Sale ⁽²⁾
Selling Shareholder	Held Outright		Warrants/ Options ⁽³⁾		Amount		% of Class			Amount		% of Class
Andrew M. Lessman		250,833		250,833		501,667		1.9	%		-		-
Ariana M. McFadyen		50,167		50,167		100,333		*			-		-
Arthur M. Margulies		50,167		50,167		100,333		*			-		-
Aton Select Fund Limited ⁽⁴⁾		150,500		150,500		301,000		1.2	%		-		-
B&R Richie’s ⁽⁵⁾		100,333		100,333		200,667		*			-		-

	Common Shares Owned Before Sale ⁽¹⁾									Common Shares Owned After Sale
Selling Shareholder	Held Outright		Warrants/ Options ⁽³⁾		Amount		% of Class			Amount		% of Class
Michael Berry		50,000		-		50,000		*			-		-
Michael Diamant		25,083		25,083		50,167		*			-		-
Michael J. Garr		40,133		40,133		80,266		*			-		-
Michael W. Engmann		150,500		150,500		301,000		1.2	%		-		-
Mitchell Sassower		50,167		50,167		100,333		*			-		-
Nathan Sugerman		100,167		50,167		150,333		*			-		-
New Horizon Exploration Inc ^.(16)		25,083		25,083		50,167		*			-		-
Omicron Master Trust ⁽¹⁷⁾		250,833		250,833		501,667		1.9	%		-		-
Patrick Hund		75,083		25,083		100,167		*			-		-
Paul A. Lobel and Laura A. Lobel, Tenants by Entirely		25,083		25,083		50,167		*			-		-
Phillip S. Sassower Charitable Remainder Annuity Trust ’96 ⁽¹⁸⁾		100,333		100,333		200,667		*			-		-
RBC Dain Rauscher Custodian FBO Gregory B. Pepus IRA		35,117		35,117		70,233		*			-		-
Regal One Corporation ⁽¹⁹⁾		1,815,287		1,000,000		2,815,287		10.9	%		1,015,287		3.9	%
Richard Friedman		50,167		50,167		100,333		*			-		-
Richard Green		50,000		-		50,000		*			-		-
Richard Hull		25,083		125,083		150,167		*			100,000		*
Richard Stone		50,000		-		50,000		*			-		-
Robert Cohan		50,167		50,167		100,333		*			-		-
Robert Lempert		20,067		20,067		40,133		*			-		-
Robert R. Kauffman		75,250		75,250		150,500		*			-		-
Rubicon Global Value Fund, L.P ^.(20)		145,483		145,483		290,966		1.1	%		-		-
S&J Veal, Inc.(21)		25,083		25,083		50,167		*			-		-
S.W. Bach & Company ^(22)(28)				127,050		127,050		*			-		-
Sachs Investing Co ^. (23)		50,167		50,167		100,333		*			-		-
Sam R. Buck		131,437		131,437		262,873		1.0	%		-		-
Silpi Polepalle		25,083		25,083		50,167		*			-		-
Steven B. Dunn		500,000		-		500,000		1.9	%		-		-
Steven Mitchell Sack		172,334		100,334		272,667		1.1	%		-		-
Sylvia Johe		25,083		25,083		50,167		*			-		-
T.R. Winston & Company, LLC ^(24)(28)				672,950		672,950		2.6	%		-		-
The JD Group, LLC ⁽²⁵⁾				1,000,000		1,000,000		3.9	%		-		-
Thomas E. Genna		150,167		50,167		200,333		*			-		-
Thomas R. Smith		50,167		50,167		100,333		*			-		-
Univest Management Employee Profit Sharing Plan ⁽²⁶⁾		50,167		50,167		100,333		*			-		-
VAR Growth Corp ^.(27)		100,000		-		100,000		*			-		-
William John Reininger		25,083		25,083		50,167		*			-		-

Total		9,103,954		8,246,666		17,350,620		67.2	%		1,115,287		4.3	%

	December 31, 2005			December 31, 2004
	(Restated)			(Restated)
ASSETS
CURRENT ASSETS
Cash	$	526,381		$	39,054
Total current assets		526,381			39,054
Property and equipment, net		29,138			61,069
Intangible assets, net		14,327			15,980
Total assets		569,846			116,103
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Notes payable to bank including accrued interest	$	116,255		$	118,000
Note payable, current portion		8,946			-
Accounts payable and accrued expenses		683,803			683,118
Deferred compensation		192,620			202,620
Total current liabilities		1,001,624			1,003,738
Notes payable, stockholder		-			60,000
Note payable, long-term portion		28,395			-
Total liabilities		1,030,019			1,063,738
STOCKHOLDERS’ DEFICIT
Preferred stock: $0.01 par value; authorized 7,000,000 shares; issued and outstanding — and 6,254,402 shares at December 31, 2005 and 2004, respectively	$	-		$	62,544
Common stock: $0.01 par value; authorized 75,000,000 shares; issued and outstanding: 20,608,272 and 2,016,586 shares at December 31, 2005 and 2004, respectively		206,083			20,166
Additional paid-in capital		31,387,894			30,184,463
Common stock payable for 226,000of unissued shares of common stock		113,000			-
Accumulated deficit		(32,167,150	)		(31,214,808	)
Total stockholders’ deficit		(460,173	)		(947,635	)
Total liabilities and stockholders’ deficit	$	569,846		$	116,10

	Year ended December 31,
	2005			2004
	(Restated)			(Restated)
Revenues	$	309,142		$	125,457
Operating expenses
Research and development costs		568,299			428,402
General, selling and administrative expenses		640,610			555,080
Depreciation and amortization		51,923			155,555
		1,260,832			1,139,037
Operating loss		(951,690	)		(1,013,580	)
Nonoperating income (expense)
Interest		7,888			4,233
Other income		-			2,702
Forgiveness of debt		10,735			-
Loss on sale of assets		-			(842,719	)
Interest expense		(19,275	)		(5,255,060	)
Net loss	$	(952,342	)	$	(7,104,424	)
Net loss per share, basic	$	(0.09	)	$	(3.53	)
Average number of shares of common stock outstanding		10,417,300			2,016,586

											Common		Additional
	Preferred Stock						Common Stock				Stock		Paid-In			Accumulated
	Shares			Amount			Shares		Amount		Payable		Capital			Deficit			Total

Balance, December 31, 2003		2,272,177		$	22,722			2,016,586	$	20,166		-	$	23,691,569		$	(24,110,384	)	$	(375,927	)
Beneficial conversion feature of convertible notes payable		-			-			-		-		-		6,207			-			6,207
Conversion of convertible notes payable which includes 3,125,000 preferred series C shares issued and accounted for as deemed interest valued at $5,000,000 or $1.60 per share		4,026,385			40,269			-		-		-		6,486,240			-			6,526,509
Net loss, December 31, 2004		-			-			-		-		-		-			(7,104,424	)		(7,104,424	)
Balance, December 31, 2004 (Restated)		6,298,562			62,991			2,016,586		20,166		-		30,184,016			(31,214,808	)		(947,635	)
Conversion of preferred stock		(6,298,562	)		(62,991	)		14,182,399		141,824		-		(78,833	)		-			-
Issuance of common stock for satisfaction of note payable totaling $60,000		-			-			120,000		1,200		-		58,800			-			60,000
Issuance of common stock for services, $0.50 per share		-			-			120,000		1,200		-		58,800			-			60,000
Issuance of common stock for services, $0.50 per share		-			-			78,000		780		-		38,220			-			39,000
Issuance of common stock at $0.50 per share, includes 1,845,287 shares issued for offering related expense		-			-			4,091,287		40,913		-		1,082,087			-			1,123,000
Warrants for 1,599,000 shares of common stock granted for services		-			-			-		-		-		44,804			-			44,804
Common stock payable for 226,000 shares of unissued common stock at $0.50 per share and warrants for 200,000 shares of common stock with an exercise price of $0.50 per share		-			-			-		-		113,000		-			-			113,000
Interest on notes receivable from stockholders		-			-			-		-		-		-			-			-
Net loss, December 31, 2005		-			-			-		-		-		-			(952,342	)		(952,342	)
Balance, December 31, 2005 (Restated)		-			-		$	20,608,272	$	206,083	$	113,000	$	31,387,894		$	(32,167,150	)	$	(460,173	)

	Preferred	Conversion Factor	Common
Series A	1,047,588	3-for-1	349,197
Series B	719,895	3-for-1	239,965
Series C	4,531,079	1-for-3	13,593,237
	6,298,562		14,182,399

Exercise Price	Outstanding Warrants	Expiration Date
$10.00	100,000	2006
$ 0.50	1,000,000	2007
$ 0.50	320,000	2008
$ 0.50	330,000	2010
$ 0.05	49,000	2015
$ 2.00	100,000	2015
$ 5.00	1,000,000	2016

	2005			2004
Computers and office equipment	$	301,892		$	300,053
Lab equipment		524,336			507,836
	$	826,228		$	807,889
Less accumulated depreciation and amortization		(797,090	)		(746,820	)
Property and equipment, net	$	29,138		$	61,069

	2005					2004
		Gross		Accumulated Amortization			Gross		Accumulated Amortization

Patent filing fees	$	24,796	$	(10,469	)	$	24,796	$	(8,816	)

	2005			2004
Note payable to Bank, interest at prime rate plus $1.5%, due June 20, 2003, collateralized by all assets of the Company and guaranteed by an officer of the Company	$	116,255		$	118,000
Note payable, stockholder		-			60,000
Note payable		37,341			-
		153,596			178,000
Current portion of note payable		(125,201	)		118,000

Long-term portion of note payable	$	28,395		$	60,000

	2005			2004
Deferred tax assets:
Net operating loss carryforward	$	8,425,356		$	8,118,339
Research and development		361,860			361,860
Start-up costs		6,276			8,368
Depreciation		30,092			30,092
Stock Compensation Expense		450,318			425,659
Deferred liabilities		47,532			47,532
Other		140,328			139,003

Deferred tax liabilities		9,461,762			9,130,853
Net deferred tax assets		-			-
Valuation allowance		(9,461,762	)		(9,130,853	)
Net deferred tax asset	$	0		$	0

SEC Registration Fee	$	2,505.18
Financial Printer to EDGARize and Print Registration Statement		3,000.00	*
Tranfer Agent Fees, including Printing and Engraving Stock Certificates		1,000.00	*
Legal Fees and Expense		0.00	(1)
Accounting Fees and Expenses		15,000.00	*
Miscellaneous		2,000.00	*
Total	$	23,505.18	*

Series	Conversion Ratio	Common Shares Issued
Preferred A	3-for-1	349,197
Preferred B	3-for-1	239,965
Preferred C	1-for -3	13,593,237

Exhibit Number		Description
3.1		Articles of Incorporation of Neuralstem, Inc., as amended
3.2		Corporate Bylaws for Neuralstem, Inc.
4.1		Option & Promissory Note Agreement between Neuralstem, Inc. and Stanley Westreich, dated October 6, 2003
4.2		2005 Stock Option Plan
4.3		Form of Stock Lockup Agreement
4.4		Non-qualified Stock Option Agreement between Neuralstem, Inc. and Richard Garr, dated July 28, 2005
4.5		Non-qualified Stock Option Agreement between Neuralstem, Inc. and Karl Johe, dated July 28, 2005
4.6		Equity Investment and Share Purchase Agreement between Neuralstem, Inc. and Regal One Corporation, effective June 22, 2005 and amended September 15, 2005
4.7		Form of $5.00 Option
4.8		September 2005 Stock Subscription Agreement
4.9		Consulting Fee Conversion Agreement and Stock Option Grant between Neuralstem, Inc. and Merrill Solomon, dated November 7, 2005
4.10		Debt Conversion Agreement and Stock Option Grant between Neuralstem, Inc. and Stanley Westreich , dated November 7, 2005.
4.11		Common Stock Purchase Agreement between Neuralstem, Inc. and High Tide, LLC and Steven B. Dunn, dated December 23, 2005
4.12		March 5, 2006 Private Placement Memorandum
4.13		Form of Placement Agent Warrant
4.14		Form of $1.50 Warrant (Series “A”)
4.15		Form of $2.00 Warrant (Series “B”)
5.1		Legal opinion and consent of Dieterich and Associates
10.1		Employment Agreement between CNS Stem Cell Technology, Inc. and I. Richard Garr, dated January 1, 1997 and Amendment, dated November 1, 2005
10.2		Employment Agreement between CNS Stem Cell Technology, Inc. and Karl Johe, dated January 1, 1997 and Amendment, dated November 1, 2005

10.3		Material Transfer and Research Agreement between Neuralstem, Inc. and the Regents of the University of John Hopkins, dated March 2, 2001
10.4		Research Agreement between Neuralstem, Inc. and the Regents of the University of California, San Diego, dated May 15, 2002
10.5		License Agreement between Neuralstem, Inc. and the Maryland Economic Development Corporation, dated Febraury 1, 2004, and Amendment, dated March 14, 2004
10.6		Non-Exclusive Limited License and Material Transfer Agreement between Neuralstem, Inc. and A-T Children’s Project, dated December 22, 2004
10.7		Exclusive License Agreement between Neuralstem, Inc. and Biomedical Research Models, Inc., dated February 7, 2005 and Amendment, dated May 20, 2006
10.8		Scientific Advisory Letter & Stock Option Agreement between Neuralstem, Inc. and Thomas Freemen, dated March 21, 2005
10.9		Laboratory Services and Confidentiality Agreement between Neuralstem, Inc. and Biopharmaceutical Services, a division of Charles River Laboratories, dated May 11, 2005
10.10		Business Advisory Services and Warrant Agreement between Neuralstem, Inc. and Richard A. Hull, PhD, dated May 23, 2005
10.11		Limited Exclusive License Agreement between Neuralstem, Inc. and High Med Technologies, Inc., dated July 7, 2005
10.12		Consulting Agreement for Financial Public Relations Services and Non-Qualified Stock Option as Amended between Neuralstem, Inc. and Equity Communications, LLC, dated August 29, 2005 and November 1, 2005
10.13		Research Agreement between Neuralstem, Inc. and the Regents of the University of Southern Florida, dated September 21, 2005
10.14		Business Advisory Services and Warrant Agreement between Neuralstem, Inc. and the J.D. Group, LLC, dated October 15, 2005
10.15		Consulting Fee Conversion Agreement between Neuralstem, Inc. and Einhorn Associates, Inc., dated November 14, 2005
10.16		Lease of Vivarium Room between Neuralstem Inc. and Perry Scientific, dated February 14, 2006
10.17		Research Agreement between Neuralstem, Inc. and the Regents of the University of Central Florida, dated March 1, 2006
14.1		Neuralstem Code of Ethics
23.1		Consent of Dieterich & Associates (included with Exhibit 5.1)
23.2		Consent of Neuralstem’s Auditors
99.1		Grant Number 1 R43 MH071958-01A2 from the National Institute of Mental Health to Neuralstem, Inc., issued September 30, 2005
99.2		Grant Number 3 R43 MH071958-01A2S1 from the National Institute of Mental Health to Neuralstem, Inc., issued November 22, 2005
99.3		Award Conditions and Information for National Institute of Health Grants


	NEURALSTEM, INC.

	By:	/s/ I Richard Garr
		I. Richard Garr Chief Executive Officer and Chief Financial Officer (principal accounting and financial officer)

REGAL ONE CORPORATION					NEURALSTEM, INC.


By:					By:
Malcolm Currie, President/CEO					I. Richard Garr President/CEO

Name and Address of Purchaser	Accredited Investor	Number of Shares	Amount of Investment	Form of Consideration

High Tide, LLC 1999 Ave of the Stars, Suite 2530 Los Angeles, CA 90067	Yes	500,000	$250,000	Cash

Steven B. Dunn 2069 Coldwater Canyon Dr. , Beverly Hills , CA 90210	Yes	500,000	$250,000	Cash

TOTAL		1,000,000	$500,000


If to Holder:	c/o T.R. Winston & Company
	1999 Avenue of the Stars, Suite 2530
	Los Angeles, California 90067
	Attention: Tyler Runnels
	Telephone: (310) 229-2139
	Facsimile: (310) 201-2712

With Copy to:	Lawrence Rosenbloom
	370 Lexington Avenue
	New York, New York 10017
	Telephone: (212) 370-1300
	Facsimile: (212) 370-7889


If to the Company, to:	Neuralstem, Inc.
	9700 Great Seneca Highway
	Rockville, Maryland 20850
	Attention: I. Richard Garr
	Telephone: (301) 366-4841
	Facsimile: (301)

With a copy to:	Dieterich & Associates
	11300 W. Olympic Blvd.
	Los Angeles, CA 90064
	Attention: Chris Dieterich, Esq.
	Telephone: (310) 312-6888
	Facsimile: (310) 312-6680


For PI: Yosef Shiloh, PhD Tel Aviv University For Recipient: Jennifer Thornton Executive Director		For Neuralstem: Richard Garr

Neuralstem, Inc.	A-TCP

By: /s/ I. Richard Garr	By: /s/ Jennifer Thornton
I. Richard Garr	Jennifer Thornton
President & CEO	Executive Director

J.D. GROUP, LLC		NEURALSTEM, INC.


By:		By:
	Name: John Davies Title: Manager		Name: I. Richard Garr Title: CEO

LESSEE	LESSOR
By: /s/ I. Richard Garr	By: /s/ Andrew Perry
Name: I. Richard Garr	Name: Andrew Perry M.D. Ph.D.
Title: Pres & CEO	Title: President
Date: 2-14-06	Date: 2/14/06