Palisade Bio (PALI) 424B3 Prospectus supplement

SUPPLEMENT DATED October 4, 2006 (To Prospectus dated August 28, 2006   Rule 424(b)(3) Registration No. 333-132923

NEURALSTEM, INC.

16,335,333

Common Shares

This prospectus supplement supplements information contained in, and should be read in conjunction with, that certain Prospectus, dated August 28, 2006, of Neuralstem, Inc. (the ”Company). This prospectus supplement is not complete without, and may not be delivered or used except in connection with, the original Prospectus. The Prospectus relates to the resale of up to 16,335,333 shares of our common stock by the selling shareholders identified in the Prospectus.

The information attached to this prospectus supplement modifies and supersedes, in part, the information in the Prospectus, as supplemented. Any information that is modified or superseded in the Prospectus shall not be deemed to constitute a part of the Prospectus, except as modified or superseded by this prospectus supplement.

We may amend or supplement the Prospectus from time to time by filing amendments or supplements as required. You should read the entire Prospectus and any amendments or supplements carefully before you make an investment decision.

As previously disclosed in the above-referenced prospectus, in the section captioned “Registration Rights.”

[w]e entered into a registration rights agreements with the investors under which we agreed to file the registration statement of which this prospectus is a part in order to register (1) the common shares issued in the private placement; and (2) the common shares issuable upon the exercise of the class “A” and “B” warrants.

The registration rights agreement required us to use our best efforts to:

· file the registration statement as soon as reasonably practicable after the first closing for the offering, but in no event more than 30 days following the closing of the minimum offering amount, which closing occurred on February 23, 2006 (“Filling Deadline”);

· have the registration agreement declared effective within 180 days after the closing of the minimum offering amount (“Effectiveness Deadline”); and

· maintain the registration statement continuously effective until the date that the shares covered by this prospectus may be sold pursuant to Rule 144 of the Securities Act without any restrictions.

If we fail to file the registration statement within the 30 days, have the registration statement declared effective within 180 days, or the registration statement does not stay effective for any 45 consecutive day period: (i) the shares underlying the “A” and “B” warrants will be increased by one percent (1%) for each 30 day period subject to proration for any partial period; and (ii) we will be obligated to issue additional shares equal to one percent (1%) of the common shares sold in the offering for each 30 day period and subject to proration for any partial period.

In addition to the forgoing, Regal One Corporation, one of our largest shareholders, agreed that if we fail to meet either the Filing Deadline or Effectiveness Deadline, that for each day following such 30 day or 180 day period, as the case may be, the Company will cancel 3,000 shares of Neuralstem's common stock which Regal One currently owns, up to a maximum of 1,000,000 cancelled shares.

We filed our initial registration statement as required under the registration rights agreement on March 31, 2006 after hours and it has a filing date of April 3, 2006. Accordingly, we have incurred a penalty of 9 days and are already obligated to issue 15,000 additional common shares, 7,500 additional class A warrant shares and 7,500 additional class B warrant shares. Additionally, 27,000 common shares held by Regal One Corporation are subject to cancellation. As stated above, we are registering an additional 100,000 common shares reserved for issuance in the event we incur additional penalties.

Described below are acts or events that constitute a substantive change from or addition to the information set forth in the above-referenced prospectus:

· Our above referenced prospectus was declared effective on September 30, 2006.

· In total, we incurred 17 days worth of penalties consisting of: (i) 9 days attributed to the filing of the prospectus past the Filing Deadline; and (ii) 6 days attributed to the prospectus becoming effective past the Effectiveness Deadline.

· As a result of the penalties and our obligations under the registration rights agreement, we have cancelled a total of 51,000 common shares held by Regal One Corporation.

· As a result of the penalties and our obligations under the registration rights agreement, we issued an aggregate of: (i) 28,333 common shares; and (ii) reserved 28,333 common shares for issuance upon the exercise of the class A and class B warrants.

As a result of the above stated actions, we are updating our selling shareholder table to provide for: (i) the cancellation of the Regal One Corporation shares; (ii) the issuance and reservation of additional shares to certain selling shareholders; and (iii) the decreasing of shares contained in the line item entitled “Reserved Penalty Shares.” We have not registered any additional shares.

The updated selling shareholder table is as follows:

	Held Outright		Warrants/ Options		Amount		% of class			Shares being registered			Shares owned after sale		%
Andrew M. Lessman		251,417		251,417		502,833		1.9	%		502,833			-
Ariana M. McFadyen		50,283		50,283		100,567		*			100,567			-
Andrew M. Margulies		50,283		50,283		100,567		*			100,567			-
Aton Select Fund Limited		150,850		150,850		301,700		1.2	%		301,700			-
B&R Richie’s		100,567		100,567		201,133		*			201,133			-
Barry Shemaria		25,142		25,142		50,283		*			50,283			-
Benjamin G. Wells, Trustee, Wells Family Revocable Trust Dtd. 5- 3-91		50,283		50,283		100,567		*			100,567			-
Brendon Myers		100,000		-		100,000		*			100,000			-
Brian Garr		25,142		25,142		50,283		*			50,283			-
Bruce & Jacqueline Barron, Joint Ownership		50,000		-		50,000		*			50,000			-
Bruce B. Allen Trustee of the Bruce and Janet Joint Revocable Trust dated 7-31-03		50,283		50,283		100,567		*			100,567			-
Chaim Slomluc		50,000		-		50,000		*			50,000			-
Chandrasekhar Polepalle & Suseela Polepalle JTWROS		325,708		125,708		451,417		1.7	%		451,417			-
Charles Abramovitz		50,283		50,283		100,567		*			100,567			-
Condor Financial Management S.A.		50,283		50,283		100,567		*			100,567			-
Dan R. Hamby and Marianne Hamby		40,227		40,227		80,453		*			80,453			-
David Carl Lustig, III		50,283		50,283		100,567		*			100,567			-
Donald L. Stahl		50,283		50,283		100,567		*			100,567			-
Equity Communications, LLC				330,000		330,000		1.3	%		330,000			-
Freddie Bear Partnership		25,142		25,142		50,283		*			50,283			-
G. Tyler Runnels or Jasmine Niklas Runnels TTEES The Runnel Family Trust dtd 1-11-20		112,068		12,068		124,136		*			124,136	��		-
Guy Clemente		100,000		-		100,000		*			100,000			-
Harbans L. Gulati & Subhash C. Gulati		25,142		25,142		50,283		*			50,283			-
Hawkins Family Trust		50,283		50,283		100,567		*			100,567			-
High Tide, LLC		500,000		-		500,000		1.9	%		500,000			-
Ira Weingarten		25,142		25,142		50,283		*			50,283			-
Iroquois Master Fund, Ltd.		251,417		251,417		502,833		1.9	%		502,833			-
J. Leroy and Joan B. Thompson		12,068		12,068		24,136		*			24,136			-
JAG Multi Investments, LLC		100,567		100,567		201,133		*			201,133			-
JAM Capital Associates, LLC		25,142		25,142		50,283		*			50,283			-
James Karanfilian		25,142		25,142		50,283		*			50,283			-
James McCamant		50,000		-		50,000		*			50,000			-
Jay R. Solan & Sandra S. Solan		225,708		125,708		351,417		1.4	%		351,417			-
JMG Capital Partners, LP		502,833		502,833		1,005,667		3.9	%		1,005,667			-
JMG Triton Offshore Fund, Ltd.		502,833		502,833		1,005,667		3.9	%		1,005,667			-
John G. Korman		50,283		50,283		100,567		*			100,567			-
John H. Dakin		15,085		15,085		30,170		*			30,170			-
Jonathan Meyers		100,567		100,567		201,133		*			201,133			-
Joseph Giamanco		50,283		50,283		100,567		*			100,567			-
Joseph H. Merback & Tema N. Merback Co-TTEE FBO Merback Family Trust UTD 8-30-		100,567		100,567		201,133		*			201,133			-
Larry E. Roher		50,283		50,283		100,567		*			100,567			-
Leonard Cohen		50,283		50,283		100,567		*			100,567			-
Louis Albert Lobel		25,142		25,142		50,283		*			50,283			-
Martin Hodas		100,567		100,567		201,133		*			201,133			-
Michael Berry		50,000		-		50,000		*			50,000			-
Michael Diamant		25,142		25,142		50,283		*			50,283			-
Michael J. Garr		40,227		40,227		80,453		*			80,453			-
Michael W. Engmann		150,850		150,850		301,700		1.2	%		301,700			-
Mitchell Sassower		50,283		50,283		100,567		*			100,567			-
Nathan Sugarman		100,283		50,283		150,567		*			150,567			-
New Horizon Exploration Inc.		25,142		25,142		50,283		*			50,283			-
Omicron Master Trust		251,417		251,417		502,833		1.9	%		502,833			-
Patrick Hund		75,142		25,142		100,283		*			100,283			-
Paul A. Lobel and Laura A. Lobel, Tenants by Entirely		25,142		25,142		50,283		*			50,283			-
Phillip S. Sassower Charitable Remainder Annuity Trust ‘96		100,567		100,567		201,133		*			201,133			-
RBC Dain Rauscher Custodian FBO Gregory B. Pepus IRA		35,198		35,198		70,397		*			70,397			-
Regal One Corporation		1,794,287		1,000,000		2,794,287		10.8	%		1,800,000			994,287		3.9	%
Richard Friedman		50,283		50,283		100,567		*			100,567			-
Richard Green		50,000		-		50,000		*			50,000			-
Richard Hull		25,142		125,142		150,284		*			50,284			100,000		*
Richard Stone		50,000		-		50,000		*			50,000			-
Robert Cohan		50,283		50,283		100,567		*			100,567			-
Robert Lempert		20,113		20,113		40,227		*			40,227			-
Robert R. Kauffman		75,425		75,425		150,850		*			150,850			-
Rubicon Global Value Fund, L.P.		145,822		145,822		291,643		1.1	%		291,643			-
S&J Veal, Inc.		25,142		25,142		50,283		*			50,283			-
S.W. Bach & Company				127,050		127,050		*			127,050			-
Sachs Investing Co.		50,283		50,283		100,567		*			100,567			-
Sam R. Buck		131,742		131,742		263,485		1.0	%		263,485			-
Silpi Polepalle		25,142		25,142		50,283		*			50,283			-
Steven B. Dunn		500,000		-		500,000		1.9	%		500,000			-
Steven Mitchell Sack		172,567		100,567		273,133		1.1	%		273,133			-
Sylvia Johe		25,142		25,142		50,283		*			50,283			-
T.R. Winston & Company, LLC				672,950		672,950		2.6	%		672,950			-
The JD Group, LLC				1,000,000		1,000,000		3.9	%		1,000,000			-
Thomas E. Genna		150,283		50,283		200,567		*			200,567			-
Thomas R. Smith		50,283		50,283		100,567		*			100,567			-
Univest Management Employee Profit Sharing Plan		50,283		50,283		100,567		*			100,567			-
VAR Growth Corp.		100,000		-	��	100,000		*			100,000			-
William John Reininger		25,142		25,142		50,283		*			50,283			-
Reserved Penalty Shares		38,333		38,333		76,667					76,667			-
TOTALS		9,132,954		8,296,667		17,429,621					16,335,334			1,094,287