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PROSPECTUS
SUPPLEMENT
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Filed
pursuant to Rule 424(b)(5)
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(To
Prospectus dated October 14, 2010)
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Registration
No. 333-169847
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Up
to $20,000,000
Common
Stock
On
November 22, 2010, we entered into a sales agreement with Stifel, Nicolaus &
Company, Incorporated (“Sales Agent”) relating to the offering of our common
stock, par value $0.01 per share, made by this prospectus supplement and the
accompanying prospectus.
In
accordance with the terms of the sales agreement, we may offer and sell up to
$20,000,000
of our common stock from time to time through the Sales Agent, acting as
our sales agent.
Subject to the terms and
conditions set forth in the sales agreement, we agree to issue and sell
exclusively through the Sales Agent acting as sales agent or directly to the
Sales Agent acting as principal from time to time, and the Sales Agent agrees to
use its commercially reasonable efforts to sell as sales agent for us, the
shares of common stock. Sales of the shares, if any, through the
Sales Agent acting as sales agent or directly to the Sales Agent acting as
principal will be made by means of ordinary brokers’ transactions on the NYSE
AMEX, or otherwise at market prices prevailing at the time
of sale, at prices related to prevailing market prices. The Sales
Agent is entitled to compensation not to exceed
3.5% of
the gross sales price per share for any shares sold by the Sales Agent as our
sales agent. The offering of common stock pursuant to the sales
agreement will terminate upon the earlier of (i) the sale of all the shares of
our common stock subject to the sales agreement, and (ii) the termination of the
sales agreement by the Sales Agent or
us.
Our
common stock is listed on the NYSE AMEX under the symbol “CUR.” The
closing price of our common stock on the NYSE AMEX on November 19, 2010,
was $2.16 per share.
Investing
in our common stock involves various risks. See “Risk Factors”
beginning on page S-5 of this prospectus supplement and on page 3 of the
accompanying prospectus and the risks disclosed in our periodic reports
incorporated by reference in this prospectus supplement and the accompanying
prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Stifel
Nicolaus Weisel
The date
of this prospectus supplement is November 22, 2010.
TABLE
OF CONTENTS
Prospectus
supplement
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Page
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Prospectus Summary
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S-2
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Note Regarding Forward-Looking
Statements
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S-2
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Our Business
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S-3
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The Offering
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S-5
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Risk Factors
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S-5
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Use of Proceeds
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S-6
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| Dilution |
S-6
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Plan of Distribution
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S-7
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Legal Matters/Interest of Named Experts and
Counsel
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S-8
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Experts
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S-8
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Where You Can Find More
Information
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S-8
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Incorporation of Certain Documents by
Reference
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S-8
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Page
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About This Prospectus
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1
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The Company
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2
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Risk Factors
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3
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Forward-Looking Statements
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4
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Use of Proceeds
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4
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Dividend Policy
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4
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Description of Securities to be
Registered
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4
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Description of Capital
Stock
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4
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Description of the Warrants
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6
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Description of the Units
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7
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Plan of Distribution
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7
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Legal Matters
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9
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Experts
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9
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Where You Can Find More
Information
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9
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Information Incorporated by
Reference
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9
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______________________________________
In making
your investment decision, you should rely only on the information contained or
incorporated by reference in this prospectus supplement and the accompanying
prospectus and any relevant free writing prospectus. We have not, and
neither has the Sales Agent, authorized anyone to provide you with any other
information. If you receive any information not authorized by us, you
should not rely on it. We are not, and the Sales Agent is not, making
an offer to sell the common stock in any jurisdiction where the offer or sale is
not permitted. You should not assume that the information contained
or incorporated by reference in this prospectus supplement or the accompanying
prospectus or any relevant free writing prospectus is accurate as of any date
other than its respective date.
PROSPECTUS
SUMMARY
We are
providing information to you about this offering in two parts. The first part is
this prospectus supplement, which provides the specific details regarding the
offering. The second part is the base prospectus dated October 14, 2010,
included in the registration statement on Form S-3 (No. 333-169847)
which we are supplementing with the information contained in this supplement.
Generally, when we refer to this “prospectus,” we are referring to both
documents combined as well as any documents incorporated herein by reference.
Some of the information in the base prospectus may not apply to this
offering. If information in this prospectus supplement is
inconsistent with the base prospectus, you should rely on this prospectus
supplement.
You
should also read and consider the information in the documents that we have
referred you to in “Where You Can Find More Information” on page S-7 of this
prospectus supplement and the information described under “Incorporation of
Certain Documents by Reference” on page S-7 of this prospectus supplement before
investing in our securities. The information incorporated by reference is
considered to be part of this prospectus supplement, and information that we
file later with the Securities and Exchange Commission, or SEC, will
automatically update and supersede this information.
References
to, “we,” “us,” “our,” “Neuralstem,” the “Company,” and similar terms refer to
Neuralstem, Inc., a Delaware corporation, unless the context otherwise
requires.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, or the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or
the Exchange Act. Any statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance are not historical facts
and may be forward-looking. These forward-looking statements include, but are
not limited to, statements about:
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the
success of our research and development activities, the development of a
viable commercial product, and the speed with which regulatory
authorizations and product launches may be
achieved;
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whether
or not a market for our product develops, and, if a market develops, the
rate at which it develops;
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our
ability to successfully sell or license our products if a market
develops;
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our
ability to attract and retain qualified personnel to implement our
business plan and corporate growth
strategies;
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our
ability to develop sales, marketing, and distribution
capabilities;
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our
ability to obtain reimbursement from third party payers for our proposed
products if they are developed;
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the
accuracy of our estimates and
projections;
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our
ability to secure additional financing to fund our short-term and
long-term financial needs;
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·
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changes
in our business plan and corporate strategies;
and
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other
risks and uncertainties discussed in greater detail in the section
captioned “Risk
Factors.”
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Each
forward-looking statement should be read in context with, and in understanding
of, the various other disclosures concerning our company and our business made
elsewhere in this prospectus as well as our public filings with the SEC. You
should not place undue reliance on any forward-looking statement as a prediction
of actual results or developments. We are not obligated to update or revise any
forward-looking statements contained in this prospectus or any other filing to
reflect new events or circumstances unless and to the extent required by
applicable law.
S-2
OUR
BUSINESS
This
summary highlights selected information appearing elsewhere or incorporated by
reference in this prospectus and may not contain all of the information that is
important to you. This summary is not complete and does not contain
all of the information that you should consider before investing in our
securities. To fully understand this offering and its consequences to you, you
should read this entire prospectus supplement and the accompanying base
prospectus carefully, including the information referred to under the heading
“Risk Factors” in this prospectus supplement beginning on page S-5, and the
financial statements and other information incorporated by reference in this
prospectus supplement and the accompanying base prospectus when making an
investment decision.
Overview
We are
focused on the development and commercialization of treatments based on
transplanting human neural stem cells and small molecule compounds.
We have
developed and maintain a portfolio of patents and patent applications that form
the proprietary base for our research and development efforts in the area of
neural stem cell research. We own or exclusively license fourteen (14) issued
patents and twenty-two (22) patent pending applications in the field of
regenerative medicine and related technologies. We believe our technology base,
in combination with our know-how, and collaborative projects with major research
institutions, provide a competitive advantage and will facilitate the
development and commercialization of products for use in the treatment of a wide
array of neurodegenerative conditions and in regenerative repair of acute
disease.
Regenerative
medicine is a young and emerging field. Regenerative medicine is the process of
creating living, functional tissues to repair or replace tissue or organ
function lost due to age, disease, damage, or congenital defects. There can be
no assurances that our intellectual property portfolio will ultimately produce
viable commercialized products and processes. Even if we are able to produce a
commercially viable product, there are strong competitors in this field and our
products may not be able to successfully compete against them.
All of
our research efforts to date are at the pre-clinical or clinical stage of
development. We are focused on leveraging our key assets, including our
intellectual property, our scientific team and our facilities, to advance our
technologies. In addition, we are pursuing strategic collaborations with members
of academia.
Clinical
Trials
On
December 18, 2008 we filed our first Investigational New Drug Application
(“IND”) with the U.S. Food and Drug Administration (“FDA”) to begin a clinical
trial to treat Amyotrophic Lateral Sclerosis (“ALS” or “Lou Gehrig’s disease”).
On September 21, 2009, the FDA approved our IND. The first patient in our
study was dosed on January 21, 2010 at Emory University in Atlanta Georgia.
In May of 2010, we announced that, after reviewing the safety data from
the first cohort of three patients, the Safety Monitoring Board had approved
moving to the next cohort and transplanting the fourth patient. The first cohort
of patients received five injections of the Company’s spinal cord stem cells on
one side of the spinal cord. The second cohort of three patients will receive
ten injections, five on each side of the cord. The trial will ultimately
consist of up to 18 ALS patients, who will be examined at regular intervals
post-surgery, with final review of the data to come six months after the last
patient is treated. To date, we have treated 7
patients. It is still too early in the trials to make any
determination as to its level of success, if any.
On August
22, 2010, we filed our second IND with the FDA in connection with
our proposed Phase I clinical trials for chronic spinal cord
injury. In October of 2010, we were notified that our IND for spinal
cord injury had been placed on clinical hold. At the time, the FDA
provided us with specific comments, questions and recommendations for
modifications to our trial protocol as contained in our IND. We
anticipate the study, if approved and commenced, will be a multi-site study in
the U.S.
Technology
Stem
Cells
Our
technology enables the isolation and large-scale expansion of human neural stem
cells from all areas of the developing human brain and spinal cord, thus
enabling the generation of physiologically relevant human neurons of all types.
Our two issued core patents entitled: (i) Isolation, Propagation,
and Directed Differentiation of Stem Cells from Embryonic and Adult Central
Nervous System of Mammals; and (ii) In Vitro Generation of
Differentiated Neurons from Cultures of Mammalian Multipotential CNS Stem
Cell contain claims which cover the process of deriving the
cells as well as the cells created from this process.
What
differentiates our stem cell technology from others is that our patented
processes do not require us to direct our cells towards a certain fate by adding
specific growth factors. Our cells actually “become” the type of cell they are
fated to be. This process and the resulting cells comprise a technology platform
that allows for the efficient isolation and production, in commercially
reasonable quantities, of neural stem cells from the human brain and spinal
cord.
S-3
To date
we have focused our efforts on applications involving spinal cord stem cells. We
believe we have established “proof of principle” for two important spinal cord
applications: ALS, or Lou Gehrig’s disease, and Ischemic Spastic Paraplegia (a
painful form of spasticity that may arise as a complication of surgery to repair
aortic aneurysms). Of these applications, we have commenced Phase I trials with
regard to ALS.
We intend
to treat both chronic and acute spinal cord injury with the same spinal cord
stem cells, utilizing the same injection devices we are using for
ALS. The treatment for spinal cord injury will, however, likely only
involve a few injections as opposed to the fifteen injection dosage that is
ultimately planned for the ALS trial. We, therefore, add to our
knowledge about the surgical route of entry for both the ALS patients and the
spinal cord injury patients with each patient we treat in the ALS
trial.
Small-molecule
Compounds
We have
performed tests on cultured neural stem cells as well as in animal models in
order to validate the performance of small molecule compounds for
hippocampal neurogenesis. As a result of those tests, we feel that our small
molecule compound may have an application with regard to the treatment of
depression. We expect to file an IND to commence human safety trials
of our lead small molecule compound to treat major depression in early
2011. In anticipation of filing the IND, we have contracted for a
production run of our compound using Good Manufacturing Practice (“GMP”) methods
which will be large enough to complete safety testing and Phase I clinical
trials.
In
July of 2009, the U.S. Patent and Trademark Office issued the patent
covered by patent application 12/049,922, entitled “Use of Fused Nicotinamides to
Promote Neurogenesis,” which claims four chemical entities and any
pharmaceutical composition included in them.
Research
We have
devoted substantial resources to our research programs in order to isolate and
develop a series of neural stem cell banks that we believe can serve as a basis
for our therapeutic products. Our efforts to date have been directed at methods
to identify, isolate and culture large varieties of stem cells of the human
nervous system, and to develop therapies utilizing these stem cells. This
research is conducted internally, through the use of third party laboratories
and consulting companies under our direct supervision, and through collaboration
with academic institutes.
Operating
Strategy
We employ
an outsourcing strategy where we outsource all of our Good Laboratory
Practices, preclinical development activities and GMP manufacturing and clinical
development activities to contract research organizations and contract
manufacturing organizations as well as all non-critical corporate
functions. Manufacturing is also outsourced to organizations with
approved facilities and manufacturing practices. This outsource model
allows us to better manage cash on hand and eliminates non-vital
expenditures. It also allows for us to operate with relatively fewer
employees and lower fixed costs than that required by our
competitors.
Employees
As of
October 31, 2010, we had 8 full-time employees and 11 full time independent
contractors. Of these employees, 3 work on research and development and 5
in administration. We also use the services of numerous outside consultants in
business and scientific matters.
Our
Corporate Information
We were
incorporated in Delaware. Our principal executive offices are located at 9700
Great Seneca Highway, Rockville, Maryland 20850, and our telephone number is
(301) 366-4841. Our website is located at www.neuralstem.com. We have not
incorporated by reference into this prospectus supplement or the accompanying
base prospectus the information in, or that can be accessed through, our
website, and you should not consider it to be a part of this prospectus
supplement or the accompanying prospectus.
S-4
THE
OFFERING
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Issuer
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Neuralstem,
Inc., a Delaware corporation
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Common
Stock Offered
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Up
to $20,000,000 of our common stock, par value $0.01 per
share.
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Use
of Proceeds
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We
intend to use the net proceeds from the sale of the securities covered by
this prospectus for general corporate purposes, which may include working
capital, capital expenditures, research and development expenditures,
clinical trial expenditures, acquisitions of new technologies or
businesses, and investments. See “Use of
Proceeds.”
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Risk
Factors
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Before
deciding to invest in shares of our common stock, you should read
carefully the risks set forth under the caption “Risk Factors” beginning on
page S-5 of this prospectus supplement and on page 3 of the
accompanying prospectus, and the risks described in our periodic reports
incorporated by reference in this prospectus supplement and the
accompanying prospectus.
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NYSE
AMEX
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CUR
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RISK
FACTORS
Your
investment in our shares of common stock is subject to certain risks. This
prospectus supplement does not describe all of those risks. You should consult
your own financial and legal advisors about the risks entailed by an investment
in our shares of common stock and the suitability of your investment in our
shares of common stock in light of your particular circumstances. For a
discussion of some of the factors you should carefully consider before deciding
to purchase any of our shares of common stock that may be offered, please read
“Risk Factors” in the documents incorporated by reference herein and in the base
prospectus, as well as those risk factors included below. Additional risks and
uncertainties not currently known to us or that we currently deem immaterial may
also adversely affect our business and operations. If any of the matters
described in the risk factors were to occur, our business, financial condition,
results of operations, cash flows or prospects could be materially adversely
affected. In such case, you could lose all or a portion of your
investment.
Risks
Related to the Offering
You
may experience immediate dilution in the book value per share of the common
stock you purchase.
Because
the price per share of our common stock being offered from time to time may be
substantially higher than the book value per share of our common stock at the
time of the sale, you may suffer substantial dilution in the net tangible book
value of the common stock you purchase in this offering.
Our
management will have broad discretion over the use of proceeds from this
offering and may not use the proceeds effectively.
Our
management will have broad discretion as to the application of the net proceeds
from this offering and could spend the proceeds in a variety of ways that may
ultimately fail to improve our operating results or enhance the value of our
common stock. Our failure to apply these funds effectively could have a negative
effect on our business and cause the price of our common stock to
decline.
Our
publicly filed reports are subject to review by the SEC, and any significant
changes or amendments required as a result of any such review may result in
material liability to us and may have a material adverse impact on the trading
price of our common stock.
The
reports of publicly traded companies are subject to review by the SEC from time
to time for the purpose of assisting companies in complying with applicable
disclosure requirements, and the SEC is required to undertake a comprehensive
review of a company’s reports at least once every three years under the
Sarbanes-Oxley Act of 2002. SEC reviews may be initiated at any time.
We could be required to modify, amend or reformulate information contained in
prior filings as a result of an SEC review. Any modification, amendment or
reformulation of information contained in such reports could be significant and
result in material liability to us and have a material adverse impact on the
trading price of our common stock.
S-5
Additional
Risks Related to our Business, Industry and an Investment in our Common
Stock
For a
discussion of additional risks associated with our business, our industry and an
investment in our common stock, see the section entitled “Risk Factors” in our
most recent Annual Report on Form 10-K (and as amended), as filed with the SEC
on March 31, 2010 and any other subsequently filed document that is also
incorporated or deemed to be incorporated by reference in this prospectus
supplement, including our Quarterly Reports on Form 10-Q.
USE
OF PROCEEDS
We intend
to use the net proceeds from the sale of the securities covered by this
prospectus for general corporate purposes, which may include working capital,
capital expenditures, research and development expenditures, clinical trial
expenditures, acquisitions of new technologies or businesses, and
investments. Pending use for these purposes, we may invest
proceeds from the sale of the securities in short-term marketable
securities. The precise amount and timing of sales of any common
stock will be dependent on market conditions and the availability and cost of
other funds to us.
DILUTION
Our net
tangible book value as of September 30, 2010 was $8,175,183, or $
0.18 per share of common stock, based on 46,182,178 shares of our common
stock outstanding. Net tangible book value per share is calculated by
subtracting our total liabilities from our total tangible assets, which is total
assets less intangible assets, and dividing this amount by the number of shares
of common stock outstanding. After giving effect to the sale of our common stock
in the aggregate amount of $20 million at an assumed offering price of $2.16 per
share, the last reported sale price of our common stock on the NYSE AMEX on
November 19, 2010, and after deducting estimated offering commissions and
expenses payable by us, our net tangible book value as of September 30,
2010 would have been $27,425,183, or $0.49 per share of common stock. This
represents an immediate increase in the net tangible book value of $0.31 per
share to our existing stockholders and an immediate and substantial dilution in
net tangible book value of $1.67 per share to new investors. The following table
illustrates this per share dilution:
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Assumed
offering price per share
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$
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2.16
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Net
tangible book value per share as of September 30,
2010
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$
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0.18
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Increase
per share attributable to new investors
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$
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0.31
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As-adjusted
net tangible book value per share after this offering
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$
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0.49
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Net
dilution per share to new investors
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$
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1.67
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The table
above assumes for illustrative purposes that an aggregate of 9,259,260 shares of
our common stock are sold at a price of $2.16 per share, the last reported sale
price of our common stock on The NYSE AMEX on November 19, 2010, for aggregate
gross proceeds of $20 million. The shares sold in this offering, if any, will be
sold from time to time at various prices. An increase of $0.40 per share in the
price at which the shares are sold from the assumed offering price of $2.16 per
share shown in the table above, assuming all of our common stock in the
aggregate amount of $20 million is sold at that price, would increase our
adjusted net tangible book value per share after the offering to $0.51 per share
and would increase the dilution in net tangible book value per share to new
investors in this offering to $2.05 per share, after deducting commissions and
estimated aggregate offering expenses payable by us. A decrease of $0.40 per
share in the price at which the shares are sold from the assumed offering price
of $2.16 per share shown in the table above, assuming all of our common stock in
the aggregate amount of $20 million is sold at that price, would decrease our
adjusted net tangible book value per share after the offering to $0.47 per share
and would decrease the dilution in net tangible book value per share to new
investors in this offering to $1.29 per share, after deducting commissions and
estimated aggregate offering expenses payable by us. This information is
supplied for illustrative purposes only.
S-6
The
calculations above are based upon 46,182,178 shares of common stock outstanding
and exclude:
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•
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Options
representing the right to purchase a total of 9,223,617 shares
of common stock at a weighted average exercise price of $2.50 per
share;
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•
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7,700,908
shares of common stock which were reserved for future equity awards that
may be granted in the future under our equity incentive
plans;
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•
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Warrants
and other convertible securities representing the right to purchase
16,219,128 shares of common stock at a weighted average exercise price of
$2.40.
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PLAN
OF DISTRIBUTION
We have
entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated
to act as our sales agent. We may issue and sell over a period of
time and from time to time up to $20,000,000 of our common stock through the
Sales Agent. Sales of the shares to which this prospectus supplement
and the accompanying prospectus relate, if any, will be made by means of
ordinary brokers’ transactions on the NYSE AMEX or otherwise at market prices
prevailing at the time of sale or as otherwise agreed between us and the Sales
Agent. The Sales Agent will not engage in any transactions that
stabilize our common stock.
The Sales
Agent will offer the shares of our common stock subject to the terms and
conditions of the sales agreement on a daily basis or as otherwise agreed upon
by us and the Sales Agent. We will designate the maximum amount of
shares of common stock to be sold through our Sales Agent on a daily
basis. Subject to the terms and conditions of the sales agreement,
the Sales Agent will use its commercially reasonable efforts to sell on our
behalf all of the shares of common stock so designated or
determined. We may instruct the Sales Agent not to sell shares of
common stock if the sales cannot be effected at or above the price designated by
us in any such instruction. We or the Sales Agent may suspend the
offering of shares of common stock being made under the sales agreement upon
proper notice to the other party.
For its
service as sales agent in connection with the sale of shares of our common stock
that may be offered hereby, we will pay a fee not to exceed 3.5% of the gross
sales price per share for any shares sold by the Sales Agent acting as our sales
agent. The remaining sales proceeds, after deducting any expenses
payable by us and any transaction fees imposed by any governmental, regulatory,
or self-regulatory organization in connection with the sales, will equal our net
proceeds from the sale of such shares. We
estimate that the total expenses of the offering payable by us, excluding
commissions payable to the Sales Agent under the sales agreement, will be
approximately $150,000.
The Sales
Agent will provide written confirmation to us following the close of trading on
the NYSE AMEX each day in which shares of common stock are sold by the Sales
Agent for us under the sales agreement. Each confirmation will
include the number of shares sold on that day, the gross sales price per share,
the compensation payable by us to the Sales Agent and the proceeds to us net of
such compensation.
Settlement
for sales of common stock will occur, unless the parties agree otherwise, on the
third business day (that is also a trading day) following the date on which any
sales were made in return for payment of the proceeds to us net of compensation
paid by us to the Sales Agent. There is no arrangement for funds to
be received in an escrow, trust or similar arrangement.
Under the
terms of the sales agreement, we also may sell shares to Stifel, Nicolaus &
Company, Incorporated, as principal, at a price agreed upon at the time of
sale. If we sell shares to Stifel, Nicolaus & Company,
Incorporated, as principal, we will enter into a separate terms agreement with
the Sales Agent setting forth the terms of such transaction, and we will
describe the agreement in a separate prospectus supplement or pricing
supplement.
In
connection with the sale of common stock through the Sales Agent on our behalf,
the Sales Agent may be deemed to be an “underwriter” within the meaning of the
Securities Act, and the compensation paid to the Sales Agent may be deemed to be
underwriting commissions or discounts. We have agreed in the sales
agreement to provide indemnification and contribution to the Sales Agent against
certain civil liabilities, including liabilities under the Securities
Act.
In the
ordinary course of its business, the Sales Agent and/or their respective
affiliates have in the past performed, and may continue to perform, investment
banking, broker dealer, lending, financial advisory or other services for us for
which they have received, or may receive, separate fees.
The
offering of common stock pursuant to the sales agreement will terminate upon the
earlier of (1) the sale of $20,000,000 of our common stock and (2) the
termination of the sales agreement, pursuant to its terms, by the Sales Agent or
us.
S-7
INTERESTS
OF NAMED EXPERTS AND COUNSEL
The
validity of the issuance of the securities offered hereby will be passed upon
for us by The Silvestre Law Group, P.C. Westlake Village,
California. The Silvestre Law Group, P.C. or its affiliates or
principals own 54,000 shares of common stock. Certain
legal matters in connection with the offering of the common stock will be passed
upon for Stifel Nicolaus Weisel by LeClairRyan, New York, New
York.
The
financial statements incorporated in this prospectus by reference from the
Company’s Annual Report on Form 10-K have been audited by Stegman &
Company, an independent registered public accounting firm, as stated in their
report, which is incorporated herein by reference. Such financial
statements have been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and
auditing. Stegman & Company has no interest in the shares being
registered in this filing.
We are a
public company and file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any document we
file at the SEC’s Public Reference Room at 100 F Street, N.E.,
Room 1580, Washington, D.C. 20549. You can request copies of these
documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference room. Our SEC filings are also available to the public
at the SEC’s web site at http://www.sec.gov.
In
addition, we maintain a web site that contains information regarding our
company, including copies of reports, proxy statements and other information we
file with the SEC. The address of our web site is
www.neuralstem.com. Except for the documents specifically incorporated by
reference into this prospectus, information contained on our website or that can
be accessed through our website does not constitute a part of this prospectus.
We have included our website address only as an inactive textual reference and
do not intend it to be an active link to our website.
This
prospectus supplement and the accompanying prospectus are part of a registration
statement on Form S-3 that we filed with the SEC registering the securities
that may be offered and sold hereunder. The registration statement, including
exhibits thereto, contains additional relevant information about us and these
securities that, as permitted by the rules and regulations of the SEC, we
have not included in this prospectus supplement or the accompanying prospectus.
A copy of the registration statement can be obtained at the address set forth
above. You should read the registration statement for further information about
us and these securities.
We
incorporate information into this prospectus by reference, which means that we
disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this prospectus, except for any such information superseded by
information contained in later-filed documents or directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC (excluding those portions of any
Form 8-K that are not deemed “filed” pursuant to the General Instructions
of Form 8-K). These documents contain important information about us and
our financial condition.
We
incorporate by reference into this prospectus supplement the information
contained in the documents listed below, which is considered to be a part of
this prospectus supplement:
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Our
Annual Report on Form 10-K and 10-K/A filed with the Commission on March
31, 2010 and as amended on October 5, 2010, for the year ended
December 31, 2009;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2010, filed on May 17, 2010;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2010, filed on August 16,
2010;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2010, filed
on November 15, 2010;
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Our
Current Reports on Form 8-K filed on June 11, 2010, June
29, 2010, July 14, 2010 (excluding any information
furnished in such reports under Item 2.02, Item 7.01 or
Item 9.01);
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Our
Definitive Proxy Statement on Schedule 14A for our 2010 Annual Meeting of
Stockholders, filed with the SEC on March 26, 2010;
and
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The
description of our common stock contained in our registration statement on
Form 8-A (Registration No. 001-33672), as amended , filed with
the Commission on August 23, 2007.
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All
reports and other documents we subsequently file pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering, including all such documents we may file with the SEC after the date
of the initial registration statement and prior to the effectiveness of the
registration statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into this prospectus
and deemed to be part of this prospectus from the date of the filing of such
reports and documents.
We will
provide without charge to each person, including any beneficial owner, to whom
this prospectus is delivered, upon written or oral request, a copy of any or all
documents that are incorporated by reference into this prospectus, but not
delivered with the prospectus, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the documents that this
prospectus incorporates. You should direct written requests to: NEURALSTEM, INC,
9700 Great Seneca Highway, Rockville, Maryland 20850 Attn: Chief Financial
Officer, Tel: (301) 366-4841.
S-9
Up to
$20,000,000
Common
Stock
______________________________________
PROSPECTUS
November
22, 2010
______________________________________
Stifel
Nicolaus Weisel
Neither
we nor the underwriter has authorized anyone to provide information different
from that contained in this prospectus. When you make a decision about whether
to invest in our common stock, you should not rely upon any information other
than the information in this prospectus. Neither the delivery of this
prospectus nor the sale of our common stock means that information contained in
this prospectus is correct after the date of this prospectus. This
prospectus is not an offer to sell or solicitation of an offer to buy these
shares of common stock in any circumstances under which the offer or
solicitation is unlawful.
S-10
PROSPECTUS
NEURALSTEM,
INC.
$50,000,000
Common
stock, Preferred stock, Warrants Units
We may
from time to time in one or more offerings, offer and sell one or any
combination of the securities we describe in this prospectus, either
individually or as units comprised of one or more of the offered securities.
This prospectus may not be used
to sell securities unless accompanied by a prospectus supplement, which will
describe the method and the terms of the offering. We will provide you
with specific amount, price and terms of the applicable offered securities in
one or more supplements to this prospectus. You should read this prospectus and
any supplement carefully before you purchase any of our securities.
These
securities may be offered and sold in the same offering or in separate
offerings; to or through underwriters, dealers, and agents; or directly to
purchasers. The names of any underwriters, dealers, or agents involved in the
sale of our securities, their compensation and any over-allotment options held
by them will be described in the applicable prospectus supplement, see “Plan of
Distribution.”
Our
common stock is listed on the NYSE AMEX under the symbol “CUR.” On October 4,
2010, the closing price of our common stock on the NYSE AMEX was $2.31 per
share. Our principal executive offices are located at 9700 Great Seneca
Highway, Rockville, MD, and our telephone number at that address is
301-366-4841.
Investing
in our securities involves risk. Please carefully read the information under
“Risk
Factors”
beginning
on page 3 for information you should consider before investing in our
securities.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
This
prospectus is dated October 14, 2010
Table
of Contents
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About This Prospectrus
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1
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The Company
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Risk Factors
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3
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Forward-Looking Statements
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Use of Proceeds
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Dividend Policy
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Description of Securities to be
Registered
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4
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Description of Capital
Stock
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4
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Description of the Warrants
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6
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Description of the Units
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7
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Plan of Distribution
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7
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Legal Matters
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9
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Experts
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9
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Where You Can Find More
Information
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Information Incorporated by
Reference
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ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with
the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration
process. Under this shelf registration statement, we may, from time to time,
sell any combination of the securities referred to herein in one or more
offerings for total gross proceeds of up to $50,000,000. This prospectus
provides you with a general description of the securities we may
offer.
Each time
we offer a type or series of securities under this prospectus, we will provide a
prospectus supplement that will contain more specific information about the
terms of the offered securities. We also may authorize one or more free writing
prospectuses to be provided to you that may contain material information
relating to these offerings. This prospectus, together with applicable
prospectus supplements and any related free writing prospectuses, includes all
material information relating to these offerings. We also may add, update or
change, in the prospectus supplement and in any related free writing prospectus
that we may authorize to be provided to you, any of the information contained in
this prospectus or in the documents that we have incorporated by reference into
this prospectus. We urge you to read carefully this prospectus, any applicable
prospectus supplement and any related free writing prospectus, together with the
information incorporated herein by reference as described under the section
entitled “Where You Can Find Additional Information,” in this prospectus before
buying any of the securities being offered. THIS PROSPECTUS MAY NOT BE USED TO
CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS
SUPPLEMENT.
You
should rely only on the information that we have provided or incorporated by
reference in this prospectus, any applicable prospectus supplement and any
related free writing prospectus that we may authorize to be provided to you. We
have not authorized any other person to provide you with different or additional
information. No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus, any
applicable prospectus supplement or any related free writing prospectus that we
may authorize to be provided to you. You must not rely on any unauthorized
information or representation. This prospectus, any applicable supplement to
this prospectus or any related free writing prospectus do not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
the registered securities to which they relate, nor do this prospectus, any
applicable supplement to this prospectus or any related free writing prospectus
constitute an offer to sell or the solicitation of an offer to buy securities in
any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
You
should assume that the information appearing in this prospectus, any applicable
prospectus supplement or any related free writing prospectus is accurate only as
of the date on the front of the document and that any information we have
incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this
prospectus, any applicable prospectus supplement or any related free writing
prospectus, or any sale of a security. Our business, financial condition,
results of operations and prospectus may have changed since those
dates.
This
prospectus contains and incorporates by reference market data, industry
statistics and other data that have been obtained from, or compiled from,
information made available by third parties. We have not independently verified
their data. This prospectus and the information incorporated herein by reference
includes trademarks, service marks and trade names owned by us or other
companies. All trademarks, service marks and trade names included or
incorporated by reference into this prospectus, any applicable prospectus
supplement or any related free writing prospectus are the property of their
respective owners.
This
prospectus contains summaries of certain provisions contained in some of the
documents described herein, but reference is made to the actual documents for
complete information. All of the summaries are qualified in their entirety by
the actual documents. Copies of some of the documents referred to herein have
been filed, will be filed, or will be incorporated by reference as exhibits to
the registration statement of which this prospectus is a part, and you may
obtain copies of those documents as described below under the section entitled
“Where You Can Find Additional Information.”
You
should read this entire prospectus carefully, including the risks of investing
discussed under “Risk Factors” beginning on page 3, the information to
which we refer you and the information incorporated into this prospectus by
reference, for a complete understanding of our business and this offering.
References in this prospectus to “our company,” “we,” “our,” “Neuralstem” and
“us” refer to Neuralstem, Inc.
1
THE
COMPANY
Overview
We are
focused on the development and commercialization of treatments based on
transplanting human neural stem cells and small molecule compounds.
We have
developed and maintain a portfolio of patents and patent applications that form
the proprietary base for our research and development efforts in the area of
neural stem cell research. We own or exclusively license fourteen (14) issued
patents and twenty-two (22) patent pending applications in the field of
regenerative medicine and related technologies. We believe our technology base,
in combination with our know-how, and collaborative projects with major research
institutions, provide a competitive advantage and will facilitate the
development and commercialization of products for use in the treatment of a wide
array of neurodegenerative conditions and in regenerative repair of acute
disease.
Regenerative
medicine is a young and emerging field. Regenerative medicine is the process of
creating living, functional tissues to repair or replace tissue or organ
function lost due to age, disease, damage, or congenital defects. There can be
no assurances that our intellectual property portfolio will ultimately produce
viable commercialized products and processes. Even if we are able to produce a
commercially viable product, there are strong competitors in this field and our
products may not be able to successfully compete against them.
All of
our research efforts to date are at the pre-clinical or clinical stage of
development. We are focused on leveraging our key assets, including our
intellectual property, our scientific team and our facilities, to advance our
technologies. In addition, we are pursuing strategic collaborations with members
of academia.
Clinical
Trials
On
December 18, 2008 we filed our first Investigational New Drug Application
(“IND”) with the U.S. Food and Drug Administration (“FDA”) to begin a clinical
trial to treat Amyotrophic Lateral Sclerosis (“ALS” or “Lou Gehrig’s disease”).
On September 21, 2009, the FDA approved our IND. The first patient in our
study was dosed on January 21, 2010 at Emory University in Atlanta Georgia.
In May of 2010, we announced that, after reviewing the safety data from
the first cohort of three patients, the Safety Monitoring Board has approved
moving to the next cohort and transplantation of the fourth patient. The first
cohort of patients received five injections of the Company's spinal cord stem
cells on one side of the spinal cord. The second cohort of three patients will
receive ten injections, five on each side of the cord. The trial
will ultimately consist of up to 18 ALS patients, who will be examined at
regular intervals post-surgery, with final review of the data to come six months
after the last patient is treated. To date, we
have treated 6 patients. It is still too early in the
trials to make any determination as to its level of success, if
any.
On August 22, 2010, we filed our second IND with the FDA. The IND is
being filed in connection with our proposed Phase I clinical trials for
Chronic Spinal Cord injury. We anticipate the study will be a multi-site
study in the U.S.
Technology
Stem
Cells
Our
technology enables the isolation and large-scale expansion of human neural stem
cells from all areas of the developing human brain and spinal cord, thus
enabling the generation of physiologically relevant human neurons of all types.
Our two issued core patents entitled: (i) Isolation, Propagation,
and Directed Differentiation of Stem Cells from Embryonic and Adult Central
Nervous System of Mammals; and (ii) In Vitro Generation of
Differentiated Neurons from Cultures of Mammalian Multipotential CNS Stem
Cell contain claims which cover the process of deriving the
cells as well as the cells created from this process.
What
differentiates our stem cell technology from others is that our patented
processes do not require us to direct our cells towards a certain fate by adding
specific growth factors. Our cells actually “become” the type of cell they are
fated to be. This process and the resulting cells comprise a technology platform
that allows for the efficient isolation and production, in commercially
reasonable quantities, of neural stem cells from the human brain and spinal
cord.
To date
we have focused our efforts on applications involving spinal cord stem cells. We
believe we have established “proof of principle” for two important spinal cord
applications: ALS, or Lou Gehrig’s disease, and Ischemic Spastic Paraplegia (a
painful form of spasticity that may arise as a complication of surgery to repair
aortic aneurysms). Of these applications, we have commenced Phase I trials with
regard to ALS.
We intend
to treat both chronic and acute spinal cord injury with the same spinal cord
stem cells, utilizing the same injection devices we are using for
ALS. The treatment for spinal cord injury will, however, likely only
involve a few injections as opposed to the fifteen injection dosage that is
ultimately planned for the ALS trial. We, therefore, add to our
knowledge about the surgical route of entry for both the ALS patients and the
spinal cord injury patients with each patient we treat in the ALS
trial.
2
Small-molecule
Compounds
We have
performed tests on cultured neural stem cells as well as in animal models in
order to validate the performance of small molecule compounds for
hippocampal neurogenesis. As a result of those tests, we feel that our small
molecule compound may have an application with regard to the treatment of
depression. We expect to file an IND to commence human safety trials
of our lead small molecule compound to treat major depression in early
2011. In anticipation of filing the IND, we have contracted for a
production run of our compound using Good Manufacturing Practice (“GMP”) methods
which will be large enough to complete safety testing and Phase I clinical
trials.
In
July of 2009, the U.S. Patent and Trademark Office (“USPTO”) issued the
patent covered by patent application 12/049,922, entitled “Use of Fused Nicotinamides to
Promote Neurogenesis,” which claims four chemical entities and any
pharmaceutical composition including them.
Research
We have
devoted substantial resources to our research programs in order to isolate and
develop a series of neural stem cell banks that we believe can serve as a basis
for our therapeutic products. Our efforts to date have been directed at methods
to identify, isolate and culture large varieties of stem cells of the human
nervous system, and to develop therapies utilizing these stem cells. This
research is conducted internally, through the use of third party laboratories
and consulting companies under our direct supervision, and through collaboration
with academic institutes.
Operating
Strategy
We employ
an outsourcing strategy where we outsource all of our Good Laboratory
Practices (“GLP”) preclinical development activities and GMP manufacturing and
clinical development activities to contract research organizations (“CRO”) and
contract manufacturing organizations (“CMO”) as well as all non critical
corporate functions. Manufacturing is also outsourced to
organizations with approved facilities and manufacturing
practices. This outsource model allows us to better manage cash on
hand and eliminates non-vital expenditures. It also allows for us to
operate with relatively fewer employees and lower fixed costs than that required
by our competitors.
Employees
As of
June 30, 2010, we had 9 full-time employees and 11 full time independent
contractors. Of these employees, 4 work on research and development
and 5 in administration. We also use the services of numerous outside
consultants in business and scientific matters.
Corporate
Information
We were
incorporated in 1997 in the state of Maryland and re-incorporated in the state
of Delaware in 2001. Our principal executive offices are located at
9700 Great Seneca Highway, Rockville, MD, and our telephone number at that
address is 301-366-4841.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. The prospectus
supplement applicable to each offering of our securities will contain a
discussion of the risks applicable to an investment in our securities. Prior to
making a decision about investing in our securities, you should carefully
consider the specific factors discussed under the heading “Risk Factors” in the
applicable prospectus supplement, together with all of the other information
contained or incorporated by reference in the prospectus supplement or appearing
or incorporated by reference in this prospectus. You should also consider the
risks, uncertainties and assumptions discussed under Item 1A, “Risk
Factors,” in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2009 (as updated in our Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2010) which are incorporated herein by
reference, and may be amended, supplemented or superseded from time to time by
other reports we file with the SEC in the future and any prospectus supplement
related to a particular offering. The risks and uncertainties we have described
are not the only ones we face. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also affect our
operations.
3
FORWARD-LOOKING
STATEMENTS
This
prospectus and the registration statement of which it forms a part, any
prospectus supplement, any related issuer free writing prospectus and the
documents incorporated by reference into these documents contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934, as amended, or the
Exchange Act. Forward-looking statements deal with our current plans,
intentions, beliefs and expectations and statements of future economic
performance. Statements containing terms such as “believe,” “do not believe,”
“plan,” “expect,” “intend,” “estimate,” “anticipate” and other phrases of
similar meaning are considered to contain uncertainty and are forward-looking
statements. In addition, from time to time we or our representatives have made
or will make forward-looking statements orally or in writing. Furthermore, such
forward-looking statements may be included in various filings that we make with
the SEC, or press releases or oral statements made by or with the approval of
one of our authorized executive officers. These forward-looking statements are
subject to certain known and unknown risks and uncertainties, as well as
assumptions that could cause actual results to differ materially from those
reflected in these forward-looking statements. Factors that might cause actual
results to differ include, but are not limited to, those set forth under
Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” in our most recent
Annual Report on Form 10-K, the corresponding sections in our most recent
Quarterly Report on Form 10-Q and in our future filings made with the SEC.
Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this prospectus, any prospectus supplement or any
related issuer free writing prospectus, which reflect management’s opinions only
as of their respective dates. Except as required by law, we undertake no
obligation to revise or publicly release the results of any revisions to any
forward-looking statements. You are advised, however, to consult any additional
disclosures we have made or will make in our reports to the SEC on Forms 10-K,
10-Q and 8-K, and any amendments thereto. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the cautionary statements contained
in this prospectus, any prospectus supplement or any related issuer free writing
prospectus.
USE
OF PROCEEDS
Except as
otherwise provided in the applicable prospectus supplement, we intend to use the
net proceeds from the sale of the securities covered by this prospectus for
general corporate purposes, which may include working capital, capital
expenditures, research and development expenditures, clinical trial
expenditures, acquisitions of new technologies or businesses, and investments.
Additional information on the use of net proceeds from the sale of securities
covered by this prospectus may be set forth in the prospectus supplement
relating to the specific offering.
DIVIDEND
POLICY
We have
never paid cash dividends on our common stock. Moreover, we do not anticipate
paying periodic cash dividends on our common stock for the foreseeable future.
We intend to use all available cash and liquid assets in the operation and
growth of our business. Any future determination about the payment of dividends
will be made at the discretion of our board of directors and will depend upon
our earnings, if any, capital requirements, operating and financial conditions
and on such other factors as our board of directors deems relevant.
DESCRIPTION
OF SECURITIES TO BE REGISTERED
Description
of the Capital Stock
As of the
date of this prospectus, our authorized capital stock consists of 150,000,000
shares designated as common stock, $0.01 par value, and 7,000,000 shares
designated as preferred stock, $0.01 par value. The only equity securities
currently outstanding are shares of common stock. As of October 5,
2010, there were 46,182,178 shares
of common stock issued and outstanding.
The
following is a summary of the material provisions of the common stock and
preferred stock provided for in our certificate of incorporation and bylaws. For
additional detail about our capital stock, please refer to our certificate of
incorporation and bylaws, each as amended, copies of which are incorporated by
reference into the registration statement to which this prospectus
relates.
Common
stock
The
holders of common stock are entitled to one vote per share on all matters to be
voted upon by the stockholders and there are no cumulative rights. Subject to
preferences that may be applicable to any outstanding preferred stock, the
holders of common stock are entitled to receive ratably any dividends that may
be declared from time to time by the board of directors out of funds legally
available for that purpose. However, we are not currently paying any dividends.
In the event of our liquidation, dissolution or winding up, the holders of
common stock are entitled to share ratably in all assets remaining after payment
of liabilities, subject to prior distribution rights of preferred stock then
outstanding. The common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. The outstanding shares of common stock are fully
paid and non-assessable, and any shares of common stock to be issued upon an
offering pursuant to this prospectus and the related prospectus supplement will
be fully paid and nonassessable upon issuance.
The
transfer agent and registrar for our common stock is American Stock Transfer and
Trust Company. Our common stock is listed for quotation on the NYSE
AMEX under the symbol “CUR.”
Preferred
stock
The
following description of preferred stock and the description of the terms of any
particular series of preferred stock that we choose to issue hereunder and that
will be set forth in the related prospectus supplement are not complete. These
descriptions are qualified in their entirety by reference to our certificate of
incorporation and the certificate of designation relating to that series. The
rights, preferences, privileges and restrictions of the preferred stock of each
series will be fixed by the certificate of designation relating to that series.
The prospectus supplement also will contain a description of certain U.S.
federal income tax consequences relating to the purchase and ownership of the
series of preferred stock that is described in the prospectus
supplement.
4
We
currently have no shares of preferred stock outstanding. Our board of directors
has the authority, without further action by the stockholders, to issue up to
7,000,000 shares of preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions granted to or imposed upon the
preferred stock. Any or all of these rights may be greater than the rights of
the common stock.
The board
of directors, without stockholder approval, can issue preferred stock with
voting, conversion or other rights that could negatively affect the voting power
and other rights of the holders of common stock. Preferred stock could thus be
issued quickly with terms calculated to delay or prevent a change in control of
us or make it more difficult to remove our management. Additionally, the
issuance of preferred stock may have the effect of decreasing the market price
of the common stock.
The
prospectus supplement for a series of preferred stock will specify:
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price of and maximum number of
shares;
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the
designation of the shares;
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the
annual dividend rate, if any, whether the dividend rate is fixed or
variable, the date or dates on which dividends will accrue, the dividend
payment dates, and whether dividends will be
cumulative;
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the
price and the terms and conditions for redemption, if any, including
redemption at our option or at the option of the holders, including the
time period for redemption, and any accumulated dividends or
premiums;
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the
liquidation preference, if any, and any accumulated dividends upon the
liquidation, dissolution or winding up of our
affairs;
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any
sinking fund or similar provision, and, if so, the terms and provisions
relating to the purpose and operation of the
fund;
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the
terms and conditions, if any, for conversion or exchange of shares of any
other class or classes of our capital stock or any series of any other
class or classes, or of any other series of the same class, or any other
securities or assets, including the price or the rate of conversion or
exchange and the method, if any, of
adjustment;
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the
voting rights; and
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any
or all other preferences and relative, participating, optional or other
special rights, privileges or qualifications, limitations or
restrictions.
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Preferred
stock will be fully paid and nonassessable upon issuance.
Anti-Takeover
Effects of Some Provisions of Delaware Law
Provisions
of Delaware law could make the acquisition of our company through a tender
offer, a proxy contest or other means more difficult and could make the removal
of incumbent officers and directors more difficult. We expect these provisions
to discourage coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of our company to first negotiate
with our board of directors. We believe that the benefits provided by our
ability to negotiate with the proponent of an unfriendly or unsolicited proposal
outweigh the disadvantages of discouraging these proposals. We believe the
negotiation of an unfriendly or unsolicited proposal could result in an
improvement of its terms.
We are
subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a “business combination” with an
“interested stockholder” for a period of three years following the date the
person became an interested stockholder, unless:
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Prior
to the date of the transaction, the board of directors of the corporation
approved either the business combination or the transaction which resulted
in the stockholder becoming an interested
stockholder;
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The
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes
of determining the number of shares outstanding (a) shares owned by
persons who are directors and also officers, and (b) shares owned by
employee stock plans in which employee participants do not have the right
to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer;
or
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On
or subsequent to the date of the transaction, the business combination is
approved by the board and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.
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Generally,
a “business combination” includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the interested stockholder. An
“interested stockholder” is a person who, together with affiliates and
associates, owns or, within three years prior to the determination of interested
stockholder status, did own 15% or more of a corporation’s outstanding voting
securities. We expect the existence of this provision to have an anti-takeover
effect with respect to transactions our board of directors does not approve in
advance. We also anticipate that Section 203 may also discourage attempts
that might result in a premium over the market price for the shares of common
stock held by stockholders.
Anti-Takeover
Effects of Provisions of Our Charter Documents
Our
amended and restated bylaws provides for our board of directors to be divided
into three classes serving staggered terms. Approximately one-third of the board
of directors will be elected each year. The provision for a classified board
could prevent a party who acquires control of a majority of the outstanding
voting stock from obtaining control of the board of directors until the second
annual stockholders meeting or longer, following the date the acquirer obtains
the controlling stock interest. The classified board provision could discourage
a potential acquirer from making a tender offer or otherwise attempting to
obtain control of our company and could increase the likelihood that incumbent
directors will retain their positions. Our amended and restated bylaws provides
any director or the entire Board may be removed from office at any time, with or
without cause, by the affirmative vote of the holders of at least a majority of
the voting power of the issued and outstanding shares of capital stock of the
corporation then entitled to vote in the election of directors.
Our
amended and restated bylaws establish an advance notice procedure for
stockholder proposals to be brought before an annual meeting of our
stockholders, including proposed nominations of persons for election to the
board of directors. At an annual meeting, stockholders may only consider
proposals or nominations specified in the notice of meeting or brought before
the meeting by or at the direction of the board of directors. Stockholders may
also consider a proposal or nomination by a person who was a stockholder of
record on the record date for the meeting, who is entitled to vote at the
meeting and who has given to our Secretary timely written notice, in proper
form, of his or her intention to bring that business before the meeting. The
amended and restated bylaws do not give the board of directors the power to
approve or disapprove stockholder nominations of candidates or proposals
regarding other business to be conducted at a special or annual meeting of the
stockholders. However, our bylaws may have the effect of precluding the conduct
of business at a meeting if the proper procedures are not followed. These
provisions may also discourage or deter a potential acquirer from conducting a
solicitation of proxies to elect the acquirer’s own slate of directors or
otherwise attempting to obtain control of our company.
Our
amended and restated bylaws provide that only our board of directors, the
chairperson of the board or the chief executive officer (or president, in the
absence of a chief executive officer) or holders of more than twenty percent
(20%) of the total voting power of the outstanding shares of capital stock may
call a special meeting of stockholders. The restriction on the
ability of stockholders to call a special meeting means that a proposal to
replace the board also could be delayed until the next annual
meeting.
Description
of the Warrants
We may
issue warrants for the purchase of our preferred stock or common stock, or any
combination thereof. Warrants may be issued independently or together with our
preferred stock or common stock and may be attached to, or separate from, any
offered securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and the warrant holder or a bank
or trust company, as warrant agent. In the event we engage a warrant agent, the
warrant agent will act solely as our agent in connection with the warrants. The
warrant agent will not have any obligation or relationship of agency or trust
for or with any holders or beneficial owners of warrants. This summary of
certain provisions of the warrants is not complete. For the terms of a
particular series of warrants, you should refer to the prospectus supplement and
the warrant agreement for that particular series.
The
prospectus supplement relating to a particular series of warrants to purchase
our common stock or preferred stock will describe the terms of the warrants,
including the following:
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the
title of the warrants;
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the
exercise price of the warrants;
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the
offering price for the warrants, if
any;
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the
aggregate number of warrants;
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the
designation and terms of the common stock or preferred stock that may be
purchased upon exercise of the
warrants;
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if
applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each
security;
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if
applicable, the date from and after which the warrants and any securities
issued with the warrants will be separately
transferable;
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the
number of shares of common stock or preferred stock that may be purchased
upon exercise of a warrant and the exercise price for the
warrants;
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the
dates on which the right to exercise the warrants shall commence and
expire;
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if
applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;
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the
currency or currency units in which the offering price, if any, and the
exercise price are payable;
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if
applicable, a discussion of material U.S. federal income tax
considerations;
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the
antidilution provisions of the warrants, if
any;
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the
redemption or call provisions, if any, applicable to the
warrants;
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any
provisions with respect to the holder’s right to require us to repurchase
the warrants upon a change in control or similar event;
and
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any
additional terms of the warrants, including procedures, and limitations
relating to the exchange, exercise and settlement of the
warrants.
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Holders
of equity warrants will not be entitled:
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to
vote, consent or receive dividends;
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receive
notice as stockholders with respect to any meeting of stockholders for the
election of our directors or any other matter;
or
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exercise
any rights of our stockholders.
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Description
of the Units
We may
issue units comprised of one or more of the other classes of securities
described in this prospectus in any combination. Each unit will be issued so
that the holder of the unit is also the holder of each security included in the
unit. Thus, the holder of a unit will have the rights and obligations of a
holder of each included security. The prospectus supplement will
describe:
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the
designation and terms of the units and of the securities comprising the
units, including whether and under what circumstances the securities
comprising the units may be held or transferred
separately;
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a
description of the terms of any agreement governing the
units;
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a
description of the provisions for the payment, settlement, transfer or
exchange of the units; and
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a
discussion of material federal income tax considerations, if
applicable; and
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The
descriptions of the units in this prospectus and in any prospectus supplement
are summaries of the material provisions of the applicable agreements. These
descriptions do not restate those agreements in their entirety and may not
contain all the information that you may find useful. We urge you to read the
applicable agreements because they, and not the summaries, define your rights as
holders of the units.
PLAN
OF DISTRIBUTION
We may
sell the offered securities in any of the ways described below or in any
combination or any other way set forth in an applicable prospectus supplement
from time to time:
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to or through underwriters or
dealers;
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through one or more agents;
or
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directly to purchasers or to a
single purchaser.
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The
distribution of the securities may be effected from time to time in one or more
transactions:
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at a fixed price, or prices,
which may be changed from time to
time;
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at market prices prevailing at
the time of sale;
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at prices related to such
prevailing market prices; or
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at negotiated
prices.
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Each
prospectus supplement will describe the method of distribution of the securities
and any applicable restrictions.
The
prospectus supplement with respect to the securities of a particular series will
describe the terms of the offering of the securities, including the
following:
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the
name or names of any underwriters, dealers or agents and the amounts of
securities underwritten or purchased by each of
them;
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the public offering price of the
securities and the proceeds to us and any discounts, commissions or
concessions allowed or reallowed or paid to dealers;
and
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any exchanges on which the
securities may be listed.
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Any
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
Only the
agents or underwriters named in each prospectus supplement are agents or
underwriters in connection with the securities being offered
thereby.
We may
authorize underwriters, dealers or other persons acting as our agents to solicit
offers by certain institutions to purchase securities from us pursuant to
delayed delivery contracts providing for payment and delivery on the date stated
in each applicable prospectus supplement. Each contract will be for an amount
not less than, and the aggregate amount of securities sold pursuant to such
contracts shall not be less nor more than, the respective amounts stated in each
applicable prospectus supplement. Institutions with whom the contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and other institutions, but shall in all cases be subject to our
approval. Delayed delivery contracts will be subject only to those conditions
set forth in each applicable prospectus supplement, and each prospectus
supplement will set forth any commissions we pay for solicitation of these
contracts.
Agents,
underwriters and other third parties described above may be entitled to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act of 1933, or to contribution from us with respect to
payments that the agents, underwriters or other third parties may be required to
make in respect of these civil liabilities. Agents, underwriters and such other
third parties may be customers of, engage in transactions with, or perform
services for us in the ordinary course of business.
One or
more firms, referred to as “remarketing firms,” may also offer or sell the
securities, if a prospectus supplement so indicates, in connection with a
remarketing arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as our agents. These remarketing firms will
offer or sell the securities in accordance with the terms of the securities.
Each prospectus supplement will identify and describe any remarketing firm and
the terms of its agreement, if any, with us and will describe the remarketing
firm’s compensation. Remarketing firms may be deemed to be underwriters in
connection with the securities they remarket. Remarketing firms may be entitled
under agreements that may be entered into with us to indemnification by us
against certain civil liabilities, including liabilities under the Securities
Act of 1933, and may be customers of, engage in transactions with, or perform
services for, us in the ordinary course of business.
Certain
underwriters may use this prospectus and any accompanying prospectus supplement
for offers and sales related to market-making transactions in the securities.
These underwriters may act as principal or agent in these transactions, and the
sales will be made at prices related to prevailing market prices at the time of
sale.
The
securities we offer may be new issues of securities and may have no established
trading market. The securities may or may not be listed on a securities
exchange. Underwriters may make a market in these securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. We can make no assurance as to the liquidity of, or the existence of
trading markets for, any of the securities.
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Certain
persons participating in an offering may engage in overallotment, stabilizing
transactions, short covering transactions and penalty bids in accordance with
rules and regulations under the Securities Exchange Act of 1934. Overallotment
involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Short covering
transactions involve purchases of the securities in the open market after the
distribution is completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the securities
originally sold by the dealer are purchased in a short covering transaction to
cover short positions. Those activities may cause the price of the securities to
be higher than it would otherwise be. If commenced, the underwriters may
discontinue any of the activities at any time.
We also
may sell any of the securities through agents designated by us from time to
time. We will name any agent involved in the offer or sale of these securities
and will list commissions payable by us to these agents in the applicable
prospectus supplement. These agents will be acting on a best efforts basis to
solicit purchases for the period of its appointment, unless stated otherwise in
the applicable prospectuses.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon by
Silvestre Law Group, P.C., Westlake Village, California.
EXPERTS
Stegman
& Company, our independent registered public accounting firm, has audited
our consolidated financial statements included in our Annual Report on
Form 10-K for the years ended December 31, 2009 and 2008, as set forth
in their report, which is incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements are, and
audited financial statements to be included in subsequently filed documents will
be, incorporated by reference in reliance on Stegman & Company’s report (to
the extent covered by consents filed with the Securities and Exchange
Commission), given on their authority as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed with the SEC a registration statement to register the securities offered
by this prospectus under the Securities Act. This prospectus is part of that
registration statement, but omits certain information contained in the
registration statement, as permitted by SEC rules. For further information with
respect to our Company and this offering, reference is made to the registration
statement and the exhibits and any schedules filed with the registration
statement. Statements contained in this prospectus as to the contents of any
document referred to are not necessarily complete and in each instance, if the
document is filed as an exhibit, reference is made to the copy of the document
filed as an exhibit to the registration statement, each statement being
qualified in all respects by that reference. You may obtain copies of the
registration statement, including exhibits, as noted in the paragraph below or
by writing or telephoning us at:
NEURALSTEM,
INC
9700
Great Seneca Highway,
Rockville,
Maryland 20850
Attn:
Chief Financial Officer
Tel :
(301) 366-4841
We file
annual, quarterly and other reports, proxy statements and other information with
the SEC. Our SEC filings are available to the public over the Internet at the
SEC’s website at
http://www.sec.gov. You may also read and copy any document we file at
the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Room. You can also inspect reports, proxy statements and other
information about us at the offices of the National Association of Securities
Dealers, Reports Section, 1735 K Street, N.W., Washington, D.C.
20006.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
incorporate information into this prospectus by reference, which means that we
disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this prospectus, except for any such information superseded by
information contained in later-filed documents or directly in this prospectus.
This prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC (excluding those portions of any
Form 8-K that are not deemed “filed” pursuant to the General Instructions
of Form 8-K). These documents contain important information about us and
our financial condition.
We
incorporate by reference into this prospectus supplement the information
contained in the documents listed below, which is considered to be a part of
this prospectus supplement:
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Our
Annual Report on Form 10-K and 10-K/A filed with the Commission on March
31, 2010, for the year ended December 31, 2009 and as amended on
October 5 2010, respectively;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2010, filed on May 17, 2010;
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2010, filed on August 16,
2010;
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Our
Current Reports on Form 8-K filed on June 11, 2010, June
29, 2010, and July 14, 2010 (excluding any information
furnished in such reports under Item 2.02, Item 7.01 or
Item 9.01);
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Our
Definitive Proxy Statement on Form 14A for our 2010 Annual Meeting of
Stockholders, filed with the SEC on March 26, 2010;
and
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The
description of our common stock contained in our Registration Statement on
Form SB-2 (Registration No. 333-142451), as amended (the
"Registration Statement"), filed under the Securities Act of 1933, as
amended, with the Commission on April 30, 2007 and declared effective May
4, 2007.
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All
reports and other documents we subsequently file pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering, including all such documents we may file with the SEC after the date
of the initial registration statement and prior to the effectiveness of the
registration statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into this prospectus
and deemed to be part of this prospectus from the date of the filing of such
reports and documents.
We will
provide without charge to each person, including any beneficial owner, to whom
this prospectus is delivered, upon written or oral request, a copy of any or all
documents that are incorporated by reference into this prospectus, but not
delivered with the prospectus, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the documents that this
prospectus incorporates. You should direct written requests to: NEURALSTEM, INC,
9700 Great Seneca Highway, Rockville, Maryland 20850 Attn: Chief Financial
Officer Tel: (301) 366-4841
10
$50,000,000
NEURALSTEM,
INC.
Common
Stock
Preferred
Stock
Warrants
Units
PROSPECTUS
October
14, 2010
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