Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreements
On October 25, 2018, Neuralstem, Inc. (the “Company”)
entered into securities purchase agreements (the “Purchase Agreements”) with certain institutional investors (“Investors”)
for the sale by the Company of 3,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”) at a purchase price of $0.70 per share (the “Registered Direct Offering”) resulting in gross proceeds
to the Company of $2.1 million. Concurrently with the Registered Direct Offering, and pursuant to the Purchase Agreements, the
Company also issued the Investors, an aggregate of 3,000,000 Common Stock purchase warrants (the “Warrants”),
which represents 100% of the shares of Common Stock sold in the Registered Direct Offering (the “Private Placement”).
The Warrants are not exercisable for a period of six (6) months following the issuance date, have an exercise price of $0.75 and
a expire on the 5.5 year anniversary of the date of issuance. Neither the Warrants nor the shares of Common Stock underlying
the Warrants have been registered with the Securities and Exchange Commission (“SEC”). The Purchase Agreements contain
representations, warranties and covenants of the Investors and the Company that are customary for transactions of this type.
The Registered Direct Offering and the Private Placement are anticipated
to close on October 29, 2018, subject to customary closing conditions. The Company estimates that the net proceeds from the offerings
will be approximately $1.9 million after deducting certain fees due to the placement agent and other estimated transaction expenses.
The net proceeds received by the Company from the transactions will be used to further its clinical and preclinical programs and
for working capital and general corporate purposes.
The 3,000,000 shares of Common Stock sold in the Registered Direct
Offering were offered and sold by the Company pursuant to an effective “shelf” registration statement on Form S-3,
which was declared effective on June 23, 2017 (File No. 333-218608).
The Warrants and the Placement Agent Warrants (as defined below)
were sold and issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 506
promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state
laws.
In connection with the Registered Direct Offering and the Private
Placement, we entered into a placement agent agreement (“Engagement Agreement”) whereby the placement agent received
an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities, as well as an
aggregate of $60,000 for certain expenses, and warrants to purchase up to 6.0% of the aggregate amount of shares of Common Stock
sold in the Registered Direct Offering, or 180,000 warrants (the “Placement Agent Warrants”). The Placement Agent Warrants
have substantially the same terms as the Warrants, except that the exercise price of the Placement Agent Warrants is $0.875 per
share and the term of the Placement Agent Warrants is five (5) years.
The foregoing description of the Purchase Agreements, Engagement
Agreement, the Warrants and the Placement Agent Warrants are not complete and are qualified in their entirety by references to
the full text of the form of Purchase Agreement, the form of Warrant and the form of Placement Agent Warrant which are filed hereto
as exhibits 10.1, 10.2, 4.1 and 4.2, respectively, to this report and are incorporated by reference herein.
A copy of the opinion of the Silvestre Law Group, P.C. relating
to the validity of the shares of Common Stock issued in the Registered Direct Offering is filed herewith as Exhibit 5.1.
