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Mail Stop 6010 July 5, 2006

The Corporation Trust Company
1209 Orange Street
New Castle County, Wilmington, Delaware 19801

Re: Neuralstem, Inc.
 Amendment No. 1 to Registration Statement on Form SB-2
 Filed June 21, 2006
 File No. 333-132923

Dear Sir or Madame:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should revise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provide us with supplemental information so we may better understand your disclosure.  After reviewing this information, we may or may not raise additional comments.

Please understand that the purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

General
1. We note your response to our prior comment 2 and reissue that comment in part.  As there is currently no market for your common shares you must set a price at which the selling shareholders will offer the shares until a market develops.  Please revise your disclosure on the prospectus cover page and in the Plan of Distribution accordingly.  Your revised disclosure should state that “The selling shareholders will sell at a price of $x.xx  per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices.”

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 2
2. Please revise your filing to include updated financial statements and financial disclosures through March 31, 2006 as required by Item 310(g) of Regulation S-B.

Prospectus Cover Page
3. We note your response to our prior comment 7 and reissue that comment.  Please limit the cover page to one page and to the information that is required by Item 501 of Regulation S-B.  Your cover page still contains superfluous information such as the bullets that describe the instruments under which the common share are issuable and the statement regarding how the selling shareholders may sell their shares.

Risk Factors, pages 7-16

General
4. Throughout the risk factor section you refer to “proceeds from this Offering.”  We note, however, that this is a secondary offering and the company will not receive the proceeds from the sale of any shares registered, other than from the exercise price of warrants.  Please clarify if you are referring to proceeds from the exercise of the warrants or delete this statement.
5. Please move the risk factors “The Company relies on stem cell technologies . . . .” and “Inability to complete pre-clinical and clinical testing . . . .” to the subsection for “Risks Relating to the Company’s Stage of Development” as these risk factors relate to the company’s development.

The Company will need to raise additional capital . . . ., page 7
6. We note your statement that your current working capital will be sufficient to satisfy contemplated cash requirements for approximately 18 months.  Please revise this risk factor to quantify your current working capital.
7. We also note that the above statement is inconsistent with the statement on page 33 in your MD&A that your available cash and expected income will be sufficient to finance most of your current activities for at least six to eight months from the date of the financial statements.  Please revise your disclosure so that these statements are consistent.

Inability to complete pre-clinical and clinical testing . . . ., page 9
8. Please revise this risk factor to disclose the company’s current stage of development.  We note that you have yet to file an IND with the FDA.

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 3
Potential and actual legislation and regulation . . . ., page 10
9. We note your response to our prior comment 25 and reissue that comment.  Please expand your discussion to explain what you mean by “certain pharmaceutical research methods or products resulting from them.”
10. We note your response to our prior comment 26 and reissue that comment.  We note your statement that your cells are not “embryonic stem cells” but that any future or additional government-imposed restrictions on embryonic stem cells may adversely impact your business.  Please expand your discussion to explain why that is the case and how your stem cells differ from embryonic stem cells.

The Company may depend on its collaborators . . . ., page 11
11. We note your response to our prior comment 28 and reissue that comment.  Please expand your discussion in this risk factor to name any current key collaborators, licensors or licensees and to discuss any specific risks related to your agreements with and dependence upon those parties.

The Company’s reliance on the activities of its non-employee consultants, research
institutions, and scientific contractors . . . ., page 12
12. We note your response to our prior comment 29 and reissue that comment.  Please expand your discussion in this risk factor to name any key non-employee consultants, research institutions, and scientific contractors and to discuss any specific risks related to your agreements with and dependence upon those parties.

There is no public market . . . ., page 14
13. We note your response to our prior comment 23 and reissue that comment.  Please expand your discussion in this risk factor to explain that your stock is not traded on an exchange or on the OTCBB and that this is your initial registration.  Please also explain that even if it is listed on the OTCBB, the trading volume may be limited, making it difficult for an investor to sell shares.
14. In addition, we note various statements in this risk factor that appear to be inapplicable to this registration statement, e.g. an investment in “Units,” the right to participate in a contemplated public registration and no assurances that a public registration will ever be effected.  Please revise this risk factor so that it relates to this registration.

The Company has identified significant weaknesses . . . ., page 15

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 4
15. We note your response to our prior comment 16 and reissue that comment.  Your statement that you have “found deficiencies or weaknesses with the timely reporting of transactions and the documentation thereof” is vague and does not provide insight into the nature of the significant deficiencies and material weaknesses that you have identified.  Please revise your disclosure to elaborate on the nature of the significant deficiencies and material weaknesses that you have identified.

There will be a continuation of management control.  Page 16
16. This risk factor as currently written appears to apply to a previous offering as it refers to the purchase of “Units” in the offering.  Please revise the risk factor to delete such references.
17. Please also revise the risk factor to address the risks associated with the fact that your two officers and directors and certain princi pal stockholders have significant control
over the company.

Our Business, pages 17-28

General
18. Please revise your disclosure to provide a complete explanation of your technology.
Throughout the prospectus, you make claims  about what your technology does, but
you not describe the technology itself.  For example, on page 19 you explain that your technology “allows for the isolation of human neural stem cells” and “allows for cells to grow in cultured dishes” but you do not describe your technology.  In addition, on page 18 you state that you “have developed proprietary and reproducible processes to identify, isolate, purify, expand, control the cells differentiation in mature functioning human neurons . . . .” and that “the cells are purified . . . .”  Please revise your disclosure to describe your “processes” and how your cells are “purified.”
19. We note your response to our prior comment 48 and reissue that comment.  You no longer make any statements about where and with whom you complete the basic work of growing cells.  Please revise your disclosure to describe if you complete this work in-house or if you have outsourced it to universities and research labs.  If you have outsourced it, describe the terms of any material arrangements and file the written agreements as exhibits to the registration statement.

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 5
Our History, page 17
20. Please revise your disclosure to restor e your explanation of why you changed your
business plan from genomics and drug discovery to neural stem cells.

Potential Markets, page 19
21. We note that your current research programs are targeting only three of the potential markets you have listed in this section, Parkinson’s, spinal-cord injuries and Amyotrophic Lateral Sclerosis.  While you may target these other markets at some time in the future, your disclosure of market size should be limited to your current potential markets.  Please revise to delete the statements regarding market size as they relate to the other potential markets.

Our Research and Programs, page 20
22. In the previous version of your prospectus, you referred to six research collaborations, but in this version you only refer to four.  If you believe your research programs with University of Florida and Rush-Presbyterian are no longer material, please supplementally provide us an explanation.  If they are still material, then please describe all material terms and file any research agreements as exhibits to the registration statement.
23. We note your response to our prior comment 50 and reissue that comment.  Please revise your disclosure to describe all material terms of each material research program and collaboration and file any relevant agreements as exhibits, to the extent you have not already done so.  For each agreement, please disclose:

• Each parties obligations, including, but not limited to, research and development funding obligations and obligations to defend patents;
• Fees paid to date, including upfront payments, annual payments, royalties and milestone payments,
• Aggregate potential milestone payments;
• Existence of royalty provisions;
• Term and termination provisions.
Please revise your disclosure here and in the financial statement footnotes to specifically indicate the payments you have made under your collaboration agreements and those that you are expected to make in the future.  If appropriate, please disclose the nature of any contingent payments you may make.  In addition, please revise your MD&A to discuss the impact of future collaboration obligations on your liquidity and capital resources.

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 6
Grants, page 21
24. We note your response to our prior comment 60 and reissue the comment.  Please revise your disclosure with respect to the NIH grant to summarize the material terms of the grant.  At a minimum, your description should include the material obligations, amounts received to date, any stipulations and the conditions under which the grant may be refundable.
25. In addition, we note that your prior disclosure also referred to a $1 million grant from NIH related to diabetes and in your MD&A you refer to a federal grant program sponsored by the Defense Advanced Research Projects Agency.  Are these grants still outstanding?  If so, please also summarize the material terms of the grants and file the grant agreements as exhibits to the registration statement.

Our Intellectual Property Licensed to Others, pages 21-22
26. For each material license agreement, please also describe the obligations/rights to defend and termination provisions.
27. For your license with High Med, please expand your disclosure to briefly describe the technology that is the subject of the license.
28. Please revise your disclosure to explain what you mean by “technology for use in developing suitable assay(s) for screening compounds to treat Ataxia-Telangiectasia.”

Manufacturing, page 22
29. Please revise your disclosure to disclose the current status of your arrangements with your manufacturer Charles River Laboratories.  In the risk factor disclosure on page 12 you state that you intend to rely on third party manufacturers in the future.  This disclosure in this section, however, suggests that you have a current arrangement with Charles River.
30. In addition, we note that you have filed your agreement with Charles River as an exhibit to the registration statement.  Please describe the material terms of this material agreement in the prospectus.
31. We acknowledge your response to our previous comment 57 related to your Ischmeic Spastic Paraplegia clinical trials.  Although you have removed all disclosure related to these trials, it appears based on your prior disclosure that you have engaged a contractor to manufacture the clinical supply for these anticipated trials.  Please explain to us whether you have any material commitments to this contract

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 7
manufacturer.  If you do, please disclose these commitments in your financial statement footnotes and in the liquidity discussion of your MD&A.

Our Intellectual Property, pages 22-24
32. You state that you maintain a “disciplined patent policy.”  Please revise your disclosure to describe your policy and to explain how it is “disciplined.”

Government Regulation, pages 25-27
33. We note your reference to FDA rules for “registration of establishments that engage in the recovery, screening, testing, processing, storage or distribution of human cells, tissues, and cellular and tissue-based products, and for the listing of such products.”  Please revise your disclosure to indicate whether you have registered with the FDA
pursuant to these rules or where you are in the registration process.  If you have not registered, please explain why.

Management's Discussion and Analysis  and Plan of Operation, pages 28-33
34. We note your response to our prior comment 34 and are unable to locate your revised disclosure in the MD&A regarding the number and type (i.e. research, administrative, marketing or other) of personnel you expect to hire and any known expected expenditures in hiring such personnel.  Please revise your disclosure to provide this information.

Results of Operations, pages 29-33
35. We note your response to our prior comment 72 and reissue that comment.  Item 303(b)(1)(vi) requires you to discuss the material changes from period to period in the line items of your financial statements.  The amounts referenced in this section do not appear to match the line items presented in your financial statements.  Please revise your disclosure to explain how these amounts differ from the line items in the financial statements.
36. We note your response to our prior comment 73 and reissue that comment.  Please revise your MD&A so that there is more focus on analysis as required by our recent MD&A Release No. 33-8350; 34-48960; FR-72 (December 19, 2003).  In that release, we explained that “MD&A requires  . . . an ‘analysis’ of known material
trends, events, demands, commitments and uncertainties.  MD&A should not be merely a restatement of financial statement information in a narrative form. . . . A thorough analysis often will involve discussing both the intermediate effects of those matters and the reasons underlying those intermediate effects.”  For example, you

The Corporation Trust Company
Neuralstem, Inc.
July 5, 2006
Page 8
should explain what led t