Applied Case Assignment
Neuralstem, Inc. (NYSE: CUR; Germantown, MD; hereafter, "Neuralstem" or "the Company") is a biopharmaceutical company that is utilizing its proprietary human neural stem cell technology to create a comprehensive platform for the treatment of central nervous system diseases. The Company was founded in 1997 and currently has laboratory and office space in Germantown, Maryland and laboratory facilities in San Diego, California and in the People's Republic of China.
Use the attached financial statements, selected notes to the financial statements, and excerpts from the Management Discussion & Analysis section from Neuralstem's 10-K for the year ended December 31, 2014 to answer the following questions. (You will not need to supplement with outside sources of company data in order to answer the questions.)
Part I: Background
1. (a) Have the Company's revenues increased or decreased over the period 2012-2014?
(b) What was the primary source of the Company's revenues for 2014?
(c) What dollar value of revenue did the company record from the sale or commercialization of its products in 2014?
2. (a) What was the primary source of cash during 2014?
(b) Explain why the Company might need a high level of cash and short-term investments leading into the next fiscal year (and potentially into the foreseeable future)?
Part II: Spotlight on Long-term Operational Assets:
3. (a) What is the approximate age (on average) of the Company's "property and equipment?"
(b) Is that relatively new or relatively old compared to the expected life of the property and equipment? Explain.
4. Assume that the Company purchased its additional Property and Equipment with cash. Write the journal entry that the Company would have used to record the purchase of Property and Equipment in 2014.
5. (a) The Company engages in significant research and development activities. What account on its Balance Sheet is currently affected the most by those research and development activities? Explain.
(b) The Company follows U.S. GAAP. If the Company instead followed IFRS, would its long-term assets likely be higher, lower, or the same as currently reported? Explain.