##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    June 30,
    2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 0-23280
      NEUROBIOLOGICAL TECHNOLOGIES,
    INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

94-3049219(State of
    incorporation)

(I.R.S. Employer Identification
    No.)2000 Powell Street, Suite 800, Emeryville, California

94608(Address of principal executive
    office)

(Zip Code)   (510) 595-6000
  (Registrants telephone number, including area code)
  Securities registered under Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value

The NASDAQ Stock Market LLCPreferred Share Purchase Rights

(NASDAQ Capital Market)   Securities registered pursuant to Section 12(g) of the
    act:
    None
      o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company þ   Rule 12b-2 o o




---



##### 





Part IItem 1


Business


2Item 1A


Risk Factors


4Item 1B


Unresolved Staff Comments


7Item 2


Properties


7Item 3


Legal Proceedings


7Item 4


Submission of Matters to a Vote of Security
    Holders


8Part IIItem 5


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


8Item 6


Selected Financial Data


9Item 7


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


10Item 7A


Quantitative and Qualitative Disclosures about
    Market Risk


18Item 8


Financial Statements and Supplementary Data


19Item 9


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


39Item 9A(T)


Controls and Procedures


39Item 9B


Other Information


40Part IIIItem 10


Directors, Executive Officers and Corporate
    Governance


40Item 11


Executive Compensation


43Item 12


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


46Item 13


Certain Relationships and Related Transactions,
    and Director Independence


49Item 14


Principal Accounting Fees and Services


49Part IVItem 15


Exhibits, Financial Statement Schedules


50EX-10.11EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  This report contains forward-looking statements. These
    forward-looking statements are based on our current expectations
    about our business, industry and plans for liquidation. In some
    cases, these statements may be identified by terminology such as
    anticipates, believes,
    continue, estimates,
    expects, may, plans,
    potential, predicts, should,
    will, or the negative of such terms and other
    comparable terminology. These statements involve known and
    unknown risks and uncertainties that may cause our results,
    levels of activity, performance or achievements to be materially
    different from those expressed or implied by the forward-looking
    statements. Factors that may cause or contribute to such
    differences include, among others, those discussed in this
    report under Item 1A.  Risk Factors.
    Except as may be required by law, we do not intend to update any
    forward-looking statement to reflect events after the date of
    this report. We, us, NTI and
    the Company as used in this report refer to
    Neurobiological Technologies, Inc., a Delaware corporation, and,
    as applicable, our subsidiary, NTI-Empire, Inc.
  Overview
  tm
    Approval
    of Plan of Complete Liquidation and Dissolution of the
    Company
    Viprinex
   2




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##### Table of Contents



tm
  Memantine
    XERECEPT®
  ®
  15-20% 13-22%
     3




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##### Table of Contents



Preclinical
    Programs Licensed from the Buck Institute for
    Age Research
    Employees
    Available
    Information and Website Address
  www.ntii.com Form 10-K, Form 10-Q, Form 8-K, www.sec.gov
  ITEM 1A.
    RISK
    FACTORS  Risks
    Related to Our Business
  Our
    company is in a transition phase, and its future is
    uncertain.
  ®
     4




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We
    only have very limited control over the development and
    commercialization of
    XERECEPT®,

    which we have sold to Celtic Pharma, and as a result, we may not
    realize a significant portion of the potential value of this
    product candidate.
    The
    approval of
    XERECEPT®,

    the only investigational drug in which we retain any interest,
    by the FDA or other regulatory authorities is uncertain and will
    involve the commitment of substantial time and
    resources.
              Even
    if
    XERECEPT®

    is approved for commercialization, it may not be successfully
    commercialized or generate meaningful product revenues for
    us.
  and/or
 5




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##### Table of Contents



Celtic
    Pharma may not be successful in selling its rights to
    XERECEPT.
  13-22%
  Risks
    Related to Our Financial Condition
  The
    auction rate securities we hold in our portfolio are currently
    not actively trading, and we may have to sell all or some of
    these securities at a loss.
    Risks
    Related to Our Common Stock
  The
    market price of our common stock has been, and is likely to
    continue to be, highly volatile.
    
    announcements of our plans regarding the future of the Company;
    announcements or actions by our major stockholders relating to
    the announcement of the planned liquidation and dissolution of
    the Company;
    announcements of the results of clinical trials of Celtic Pharma
    or any of its potential competitors;
    announcements regarding Celtic Pharmas planned sale of
    XERECEPT;
    the status of our compliance with Nasdaqs listing
    standards;
    government regulation and health care legislation; and
    market conditions for life science companies stocks in
    general.  We are
    not likely to continue to meet the listing standards of the
    NASDAQ Capital Market, which could result in our delisting and
    negatively impact the price of our common stock and our ability
    to access the capital markets.
   6




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS
    
    the approval, timing and consequences of the anticipated plan of
    liquidation and dissolution;
    the development and commercialization or sale of XERECEPT by
    Celtic Pharma;
    projections of expenditures and liabilities, as well as of cash
    or other assets available for distribution to stockholders;
    our ability to retain and hire necessary employees, board
    members, trustees and others necessary for a dissolution of the
    Company;
    our ability to successfully liquidate our ARS and other assets
    of the Company for distribution to the stockholders; and
    any statements regarding future cash levels, future revenues and
    future expenses.    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS   7




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    Fiscal Year 2009

High


LowFourth Quarter

$
0.94


$
0.65Third Quarter

$
0.72


$
0.30Second Quarter

$
0.97


$
0.19First Quarter

$
1.67


$
0.57   Fiscal Year 2008

High


LowFourth Quarter

$
3.47


$
1.15Third Quarter

$
3.15


$
2.00Second Quarter

$
5.19


$
2.06First Quarter

$
12.60


$
3.46    8




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K
  Fiscal Year Ended June 30,2009


2008


2007


2006


2005(In thousands, except per share data)Statement of Operations Data:Total revenues

$
26,350


$
14,760


$
17,673


$
12,339


$
3,100Expenses:Research and development


17,584



24,581



26,737



22,808



10,749Acquired in-process research and development














11,501



12,650Provision for impairment of property and equipment


193















General and administrative


5,082



6,876



6,537



5,968



4,927Total expenses


22,859



31,457



33,274



40,277



28,326Operating income (loss)


3,491



(16,697
)


(15,601
)


(27,938
)


(25,226
)Interest income


748



1,254



493



399



249Interest expense






(2,479
)










Other income (expense)


(1,116
)


1,600



980







Income (loss) before income taxes


3,123



(16,322
)


(14,128
)


(27,539
)


(24,977
)Provision for income taxes














(300
)


Net income (loss)

$
3,123


$
(16,322
)

$
(14,128
)

$
(27,839
)

$
(24,977
)Basic and diluted net income (loss) per share

$
0.12


$
(0.84
)

$
(3.26
)

$
(6.84
)

$
(6.59
)Shares used in basic net income (loss) per share calculation


26,926



19,437



4,338



4,070



3,790Shares used in diluted net income (loss) per share calculation


26,946



19,437



4,338



4,070



3,790   As of June 30,2009


2008


2007


2006


2005(In thousands)Balance Sheet Data:Cash, cash equivalents and short-term investments

$
24,049


$
29,980


$
8,957


$
15,248


$
8,506Working capital


23,423



21,817



(3,973
)


12,055



5,290Total assets


24,660



43,187



10,921



22,499



9,815Total current liabilities


1,115



9,042



14,222



9,609



3,816Accumulated deficit


(122,468
)


(125,591
)


(109,269
)


(95,141
)


(67,302
)Stockholders equity (deficit)


23,545



20,286



(22,093
)


(11,402
)


5,999  9




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##### Table of Contents



Quarterly Periods in the Fiscal Year Ended June 30,
    2009September 30


December 31


March 31


June 30


Total(In thousands, except per share data)(quarterly amounts are unaudited)Quarterly Results of Operations:Total revenues

$
3,565


$
3,491


$
3,013


$
16,281


$
26,350Research and development expenses


(5,452
)


(10,199
)


(1,857
)


(76
)


(17,584
)General and administrative expenses


(1,331
)


(1,201
)


(1,438
)


(1,112
)


(5,082
)Interest income


249



264



136



99



748Other income (expense)


207



(193
)


(285
)


(1,038
)


(1,309
)Net income (loss)

$
(2,762
)

$
(7,838
)

$
(431
)

$
14,154


$
3,123Basic and diluted net income (loss) per share

$
(0.10
)

$
(0.29
)

$
(0.02
)

$
0.53


$
0.12Shares used in basic net income (loss) per share calculation


26,924



26,924



26,927



26,927



26,926Shares used in diluted net income (loss) per share calculation


26,924



26,924



26,927



26,941



26,946   Quarterly Periods in the Fiscal Year Ended June 30,
    2008September 30


December 31


March 31


June 30


Total(In thousands, except per share data)(quarterly amounts are unaudited)Quarterly Results of Operations:Total revenues

$
3,900


$
3,663


$
3,684


$
3,513


$
14,760Research and development expenses


(5,460
)


(7,416
)


(5,945
)


(5,760
)


(24,581
)General and administrative expenses


(1,659
)


(1,912
)


(1,757
)


(1,548
)


(6,876
)Interest income


28



452



540



234



1,254Other income (expense)


2,269



(1,670
)


(1,585
)


107



(879
)Net loss

$
(922
)

$
(6,883
)

$
(5,063
)

$
(3,454
)

$
(16,322
)Basic and diluted net loss per share

$
(0.19
)

$
(0.36
)

$
(0.19
)

$
(0.13
)

$
(0.84
)Shares used in basic and diluted net loss per share calculation


4,772



19,313



26,913



26,913



19,437   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  OVERVIEW
    AND KEY DEVELOPMENTS IN FISCAL 2009
  tm ®
 10




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Critical
    Accounting Policies
  and/or
  Revenue
    recognition
        Research
    and development expenses
   11




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Estimates
    Involved in Determining Fair Value of Investments
  other-than-temporary.
  Equity
    Financing Warrants
  00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock
  Stock-based
    compensation
    Recent
    Accounting Pronouncements
  SFAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active SFAS 157-3 SFAS 157-3
  FAS 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments Disclosures About Fair Value of Financial Instruments Interim Financial Reporting
 12




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##### Table of Contents



FAS 157-4, Determining Fair Value When the Volume and Level of Activity
    for the Asset or Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly Fair Value
    Measurements FSP 157-4 normal
  Subsequent Events
  The
    FASB Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles, a replacement of FASB
    Statement No. 162
  RESULTS
    OF OPERATIONS
  Overview
   13




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##### Table of Contents



Revenues
    Increase (Decrease)Fiscal Year Ended June 30,


from Prior Year2009


2008


2007


2009/2008


2008/2007XERECEPT sale

$
18,792


$
5,500


$
5,500


$
13,292


$
Collaboration services


493



1,007



5,320



(514
)


(4,313
)Technology sale and collaboration services


19,285



6,507



10,820



12,778



(4,313
)Royalty


7,065



8,253



6,853



(1,188
)


1,400$
26,350


$
14,760


$
17,673


$
11,590


$
(2,913
)         Research
    and Development Expenses
   14




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##### Table of Contents



Increase/(Decrease)Fiscal Year Ended June 30,


from Prior Year2009


2008


2007


2009/2008


2008/2007Viprinex for stroke

$
16,247


$
22,071


$
21,208


$
(5,824
)

$
863XERECEPT


487



1,061



5,529



(574
)


(4,468
)Preclinical programs for Alzheimers and Huntingtons
    diseases


850



1,449







(599
)


1,449$
17,584


$
24,581


$
26,737


$
(6,997
)

$
(2,156
)          15




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##### Table of Contents



General
    and Administrative Expenses
    (Decrease) IncreaseFiscal Year Ended June 30,


from Prior Year2009


2008


2007


2009/2008


2008/2007$
5,082


$
6,876


$
6,537


$
(1,794
)

$
339         Impairment
    Charge for Property and Equipment
    Impairment
    Charge for Decrease in Fair Value of Investments
    Interest
    Income
    Interest
    Expense
   16




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##### Table of Contents



Non-cash
    (Loss) Gain on Change in Fair Value of Warrants
      LIQUIDITY
    AND CAPITAL RESOURCES
    June 30,


June 30,2009


2008Cash, cash equivalents and short-term investments

$
24,049


$
29,980Working capital (excluding deferred revenue and the warrant
    liability)

$
23,718


$
27,357      17




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##### Table of Contents



Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due by PeriodLess Than 1Total


Year


1-3 Years


Over 3 YearsOperating lease obligation

$
397


$
292


$
105


$
Total

$
397


$
292


$
105


$
   ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   18




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


20Audited Financial StatementsConsolidated Balance Sheets


21Consolidated Statements of Operations


22Consolidated Statements of Stockholders
    Equity (Deficit)


23Consolidated Statements of Cash Flows


24Notes to Consolidated Financial Statements


25     19




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Report of
    Independent Registered Public Accounting Firm               20




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NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  CONSOLIDATED BALANCE SHEETS
  June 30,2009


2008(In thousands, except per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
8,230


$
27,941Short-term investments


15,819



2,039Accounts receivable


184



599Prepaid expenses and other current assets


305



280Total current assets


24,538



30,859Deposits


52



85Long-term investments






11,850Property and equipment, net


70



393$
24,660


$
43,187LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
21


$
588Accrued clinical trial expenses


25



1,075Accrued professional expenses


493



252Accrued manufacturing and related expenses






581Other accrued liabilities


281



1,006Deferred revenue, current portion






5,500Warrant liability


295



40Total current liabilities


1,115



9,042Deferred revenue, net of current portion






13,292Long term clinical trial expenses and other liabilities






567Total liabilities


1,115



22,901Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value, 5,000 shares
    authorized; 3,000 authorized shares designated as Series A
    convertible preferred stock, 2,332 shares issued,
    494 shares outstanding at June 30, 2009 and 2008, with
    aggregate liquidation preference of $247


247



247Common stock, $0.001 par value, 50,000 shares
    authorized, 26,930 and 26,924 shares issued and outstanding
    at June 30, 2009 and 2008, respectively


27



27Additional paid-in capital


145,739



145,113Accumulated deficit


(122,468
)


(125,591
)Accumulated other comprehensive income






490Total stockholders equity


23,545



20,286$
24,660


$
43,187    21




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF
    OPERATIONS
  Fiscal Year Ended June 30,2009


2008


2007(In thousands, except per share amounts)REVENUES:Royalty

$
7,065


$
8,253


$
6,853Technology sale and collaboration services


19,285



6,507



10,820Total revenues


26,350



14,760



17,673EXPENSES:Research and development


17,584



24,581



26,737General and administrative


5,082



6,876



6,537Loss on impairment of property and equipment


193







Total expenses


22,859



31,457



33,274Operating income (loss)


3,491



(16,697
)


(15,601
)Interest income


748



1,254



493Realized gain on sale of long-term investments


152







Impairment charge for decrease in fair value of investments


(1,013
)


(1,778
)


Interest expense, including non-cash amortization of $2,336
    discount on notes in 2008






(2,479
)


Non-cash (loss) gain on change in fair value of warrants


(255
)


3,378



980Net income (loss)

$
3,123


$
(16,322
)

$
(14,128
)Basic and diluted net income (loss) per share

$
0.12


$
(0.84
)

$
(3.26
)Shares used in basic net income (loss) per share calculation


26,926



19,437



4,338Shares used in diluted net income (loss) per share calculation


26,946



19,437



4,338    22




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY (DEFICIT)
  Convertible














Accumulated


TotalSeries A








Additional





Other


StockholdersPreferred Stock


Common Stock


Paid-In


Accumulated


Comprehensive


EquityShares


Amount


Shares


Amount


Capital


Deficit


Income (Loss)


(Deficit)(In thousands, except per share amounts)Balances at June 30, 2006


494


$
247



4,223


$
4


$
83,507


$
(95,141
)

$
(19
)

$
(11,402
)Issuance of common stock upon exercise of stock options










37







473











473Common stock received as consideration for exercise of stock
    options










(8
)






(150
)










(150
)Issuance of common stock under employee stock purchase plan










4







47











47Issuance of common stock and warrants at $16.10 per share of
    common stock, net of issuance costs










435



1



6,493











6,494Reclassification of fair value of warrants issued to warrant
    liability


















(4,398
)










(4,398
)Stock-based compensation expense


















958











958Comprehensive loss:Net loss






















(14,128
)






(14,128
)Unrealized gain on securities


























13



13Total comprehensive loss






























(14,115
)Balances at June 30, 2007


494



247



4,691



5



86,930



(109,269
)


(6
)


(22,093
)Issuance of common stock under employee stock purchase plan










22







42











42Issuance of common stock at deemed price of $5.95 per share in
    bridge financing transaction, net of issuance costs










393







2,326











2,326Issuance of common stock at $2.75 per share in public offering,
    net of issuance costs










21,818



22



54,809











54,831Stock-based compensation expense


















1,006











1,006Comprehensive loss:Net loss






















(16,322
)






(16,322
)Unrealized gain on securities


























496



496Total comprehensive loss






























(15,826
)Balances at June 30, 2008


494



247



26,924



27



145,113



(125,591
)


490



20,286Issuance of common stock under employee stock purchase plan










6







1











1Stock-based compensation expense


















625











625Comprehensive income:Net income






















3,123







3,123Unrealized loss on securities


























(490
)


(490
)Total comprehensive income






























2,633Balances at June 30, 2009


494


$
247



26,930


$
27


$
145,739


$
(122,468
)

$



$
23,545    23




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  CONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Fiscal Year Ended June 30,2009


2008


2007(In thousands, except per share amounts)OPERATING ACTIVITIESNet income (loss)

$
3,123


$
(16,322
)

$
(14,128
)Adjustments to reconcile net income (loss) to net cash used in
    operating activities:Depreciation and amortization


132



205



230Stock-based compensation expense


625



1,006



958Gain on sale of investments


(152
)






Loss on impairment of investments


1,013



1,778



Loss on impairment of property and equipment


193







Amortization of note discount






2,336



Non-cash loss (gain) on change in fair value of warrants


255



(3,378
)


(980
)Changes in assets and liabilities:Accounts receivable


415



(169
)


1,140Notes receivable










4,000Prepaid expenses and other current assets


8



582



(45
)Accounts payable and accrued expenses


(3,249
)


(1,235
)


1,195Deferred revenue


(18,792
)


(5,500
)


(5,500
)Net cash used in operating activities


(16,429
)


(20,697
)


(13,130
)INVESTING ACTIVITIESPurchase of investments


(42,078
)


(22,918
)


(52,038
)Sales and maturities of investments


38,797



11,166



54,172Purchases of property and equipment


(2
)


(11
)


(66
)Net cash provided by (used in) investing activities


(3,283
)


(11,763
)


2,068FINANCING ACTIVITIESProceeds from stock options and employee stock purchase


1



42



370Issuance of common stock and warrants, net of issuance costs






54,831



6,493Issuance of common stock and notes in bridge financing
    transaction, net of issuance costs






5,990



Repayment of notes issued in bridge financing transaction






(6,000
)


Net cash provided by financing activities


1



54,863



6,863Increase (decrease) in cash and cash equivalents


(19,711
)


22,403



(4,199
)Cash and cash equivalents at beginning of period


27,941



5,538



9,737Cash and cash equivalents at end of period

$
8,230


$
27,941


$
5,538SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest expense

$



$
143


$
Cash paid for income taxes

$



$



$
275    24




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (tabular amounts in thousands, except per share amounts,
    percentages and years)
  Note 1.
    Description
    of Business and Summary of Significant Accounting
    Policies  Business
    Description and Basis of Presentation
  tm
    Use of
    Estimates
    Revenue
    Recognition
        Cash
    Equivalents and Investments
  available-for-sale
 25




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Concentration
    of Credit and Other Risks and Uncertainties
    Fair
    Value of Financial Instruments
  available-for-sale
  Property
    and Equipment
    Impairment
    of Long-Lived Assets
    Warrants
    Issued in Connection with Equity Financings
    Research
    and Development Expenses
    Stock-Based
    Compensation
   26




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Comprehensive
    Income (Loss)
    Operating
    Leases
    Net
    Income (Loss) per Share
    Income
    Taxes
    Recent
    Accounting Pronouncements
  SFAS 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active SFAS 157-3 SFAS 157-3
  FAS 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments Disclosures About Fair Value of Financial Instruments Interim Financial Reporting
 27




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FAS 157-4, Determining Fair Value When the Volume and Level of Activity
    for the Asset or Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly Fair Value
    Measurements FSP 157-4 normal
  Subsequent Events
  The
    FASB Accounting Standards Codification and the Hierarchy of
    Generally Accepted Accounting Principles, a replacement of FASB
    Statement No. 162
  Reclassifications
   28




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 2.
    Investments  Available-for-sale
  June 30,2009


2008Fair





FairCost


Value


Cost


ValueType of security and termU.S government and agency obligationsMaturing within one year

$
10,292


$
10,292


$



$
Auction rate securities (ARS)Maturing in 21 to 36 years


5,527
*


5,527



11,372
*


11,850Corporate debt obligationsMaturing within one year










2,027



2,039Total investments

$
15,819


$
15,819


$
13,399


$
13,889ClassificationShort-term





$
15,819






$
2,039Long-term














11,850Total investments





$
15,819






$
13,889     *
    
    Cost represents purchase price less impairment charge of
    $1,973,000 and $1,768,000 on securities still held at
    June 30, 2009 and 2008, respectively.   29




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    June 30, 2009Par


EstimatedARS

CUSIP


Value


Fair ValueVermont St. Student Assistance Loan Corp., due 12/15/2041


92428CFG4


$
2,000


$
1,480Pennsylvania St. Higher Ed. Assistance Agency,
    due 09/01/2045


709163EQ8



1,950



1,362Panhandle Plains Student Fin. Corp., due 12/01/2031


69847RAA0



1,300



1,067Brazos Texas Higher Ed. Authority, due 12/01/2034


106238FU7



1,200



900Pennsylvania St. Higher Ed. Assistance Agency,
    due 12/01/2045


709163EV7



500



349Alameda Calif. Power & Telecom Elec. Sys.,
    due 07/01/2030


01080PAN5



400



257Others






150



112Total





$
7,500


$
5,527     3.
    Fair
    Value of Financial Instruments    CarryingValue as of


Fair Value Measurements at June 30, 2009June 30,


Using Inputs from2009


Level 1


Level 2


Level 3Cash and cash equivalents

$
8,230


$
8,230


$



$
U.S government and agency obligations


10,292







10,292



Auction rate securities


5,527











5,527Total

$
24,049


$
8,230


$
10,292


$
5,527      30




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Balance at June 30, 2008

$
11,850Unrealized losses included in other comprehensive loss


Sales of securities


(5,310
)Impairment charge recognized in net loss


(1,013
)Balance at June 30, 2009

$
5,527   Note 4.
    Property
    and Equipment. Net    June 30,2009


2008Manufacturing equipment

$



$
501Furniture, fixtures and leasehold improvements


274



300Machinery and equipment


193



289467



1,090Less accumulated depreciation and amortization


(397
)


(697
)$
70


$
393   Note 5.
    Warrant
    Liability    June 30,2009


2008Volatility of common stock


2.96



0.70Term of warrants (in years)


2.75



3.75Risk-free interest rate


1.25
%


3.0
%Dividend rate






   Note 6.
    Commitments
    and Contingencies   31




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal year ending June 30:2010

$
2922011


105$
397           Note 7.
    Stockholders
    Equity  Series A
    Convertible Preferred Stock
    Common
    Stock Transactions
     32




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Securities
    Convertible into Common Stock
    Stock option and purchase plans


3,795Warrants


544Series A Convertible Preferred Stock


714,410     Expiration Date

Exercise Price


Number of SharesAugust 2009

$
47.11



83April 2012

$
16.80



461544   Note 8.
    Stock-based
    compensation         33




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4 Year Vesting

4 Year Vesting

3 Year Vesting

1 Year Vesting7 Year Term

10 Year Term

7 Year Term

10 Year TermJune 30, 2009:Expected volatility



0.67



0.80Expected term (in years)



6.25



5.50Risk-free interest rate



2.8%



2.6%June 30, 2008:Expected volatility

0.75

0.90

0.80

0.82Expected term (in years)

4.75

6.25

4.50

5.75Risk-free interest rate

3.4%

2.9%

4.7%

3.5%June 30, 2007:Expected volatility

0.79 - 0.93

1.08

0.80

0.89 - 0.90Expected term (in years)

4.75

6.25

4.50

5.50Risk-free interest rate

4.6% - 4.7%

4.7%

4.7%

4.6% - 4.7%     Fiscal Year Ended June 30,2009


2008


2007Research and development

$
252


$
283


$
346General and administrative


373



723



612$
625


$
1,006


$
958    34




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options OutstandingWeightedOptions Available





Average Exercisefor Future Grant


Number of Shares


PriceBalance at June 30, 2006


202



369


$
22.26Options granted


(105
)


105


$
17.57Options canceled and expired


10



(11
)

$
22.35Options exercised






(37
)

$
12.67Balance at June 30, 2007


107



426


$
21.84Options granted


(1,417
)


1,417


$
2.36Option granted outside of plan






150


$
2.47Options canceled and expired


36



(84
)

$
18.39Options exercised










Options authorized


3,200







Balance at June 30, 2008


1,926



1,909


$
6.04Options granted


(201
)


201


$
0.90Options canceled and expired


1,197



(1,273
)

$
4.66Options exercised










Balance at June 30, 2009


2,922



837


$
6.91     Options Outstanding


Options ExercisableWeightedAverageRemaining


Weighted





WeightedRange of Exercise




Contractual


Average





AveragePrices

Shares


Term in Years


Exercise Price


Shares


Exercise Price$0.65


90



9.4


$
0.65






$
1.10 - 3.00


600



8.3



2.55



320



2.716.23 - 49.44


147



4.2



28.47



145



28.65$0.65 - 49.44


837



7.7


$
6.91



465


$
10.79     Note 9.
    Impairment
    Charge    Note 10.
    Collaboration
    Agreements   35




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Note 11.
    Income
    Taxes   36




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##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      June 30,2009


2008Deferred tax assets:Net operating losses

$
21,155


$
15,834Deferred revenue






7,443Accrued liabilities


1,193



1,140Stock compensation


353



104Research and other credits


94



74Other


22



86Total deferred tax assets


22,817



24,681Valuation allowance


(22,817
)


(24,681
)Net deferred tax assets

$



$
      37




---



##### Table of Contents



NEUROBIOLOGICAL
    TECHNOLOGIES, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year Ended June 30,2009


2008


2007Tax expense (benefit) at federal statutory rate


35.0
%


(35.0
)%


(35.0
)%Effect of:State tax expense (benefit), net


5.0



(5.3
)


(4.1
)Share-based compensation expenses






1.9



1.7Warrant loss (gain)


2.9



(7.2
)


(2.4
)Reduction in valuation allowance


(59.7
)






Research and development tax credits


16.8







Losses not benefited






45.6



39.8Total provision for income taxes



%



%



%   ,
    Accounting for Uncertainty in Taxes.
  Balance at July 1, 2008

$
660Increase (decrease) for current period tax positions


Balance at June 30, 2009

$
660     Note 12.
    401(k)
    Savings Plan    Note 13.
    Subsequent
    Events       38




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
    Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f) 15d-15(f) Internal
    Controls  Integrated Framework Internal
    Control Over Financial Reporting  Guidance for
    Smaller Public Companies
      Internal
    Controls  Integrated Framework
   39




---



##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION  Form 8-K
 PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    Nominee or DirectorsName and Year First Became a





Year Current TermDirector

Age

Position(s) with the Company

Will ExpireAbraham E. Cohen (1993)


73


Chairman of the Board of


2011DirectorsWilliam A. Fletcher (2007)


62


Acting Chief Executive


2009Officer and DirectorTheodore L. Eliot, Jr. (1992)


81


Director


2009F. Van Kasper (2004)


72


Director


2011Abraham D. Sofaer (1997)


71


Director


2010John B. Stuppin (1988)


76


Director


2010   Abraham E. Cohen
  William A. Fletcher (1983-1985)
  Theodore L. Eliot, Jr. 30-year
  F. Van Kasper
 40




---



##### Table of Contents



Abraham D. Sofaer
  John B. Stuppin
    Board
    Committees
  Audit Committee. Regulation S-K.
 41




---



##### Table of Contents



Compensation Committee.
  Nominating and Corporate Governance
    Committee.
  www.ntii.com
  Special Committee.
  EXECUTIVE
    OFFICERS
    Name

Age

PositionWilliam A. Fletcher


62


Acting Chief Executive OfficerMatthew M. Loar


46


Vice President and Chief Financial Officer   Matthew M. Loar
  Code of
    Business Conduct and Ethics
  (Code of Conduct) www.ntii.com
 42




---



##### Table of Contents



Corporate
    Governance Guidelines
  (Guidelines)
  SECTION 16(A)
    BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
    ITEM 11.
    EXECUTIVE
    COMPENSATION  Summary
    Compensation Table
    Non-Equity



All OtherFiscal



Incentive Plan

Option

CompensationName and Principal Position(s)

Year

Salary

Compensation(1)

Awards(2)

(3)

TotalWilliam A. Fletcher(4)


2009


$



$



$
31,941


$
165,000


$
196,941Acting Chief Executive Officer and DirectorPaul E. Freiman(5)


2009



206,667







73,931



2,500



283,098Former President, Chief


2008



400,000



100,000



223,603







723,603Executive Officer and DirectorMatthew M. Loar(6)


2009



279,167



56,000



176,354







511,521Vice President and Chief


2008



68,750



17,188



27,571



25,000



138,509Financial OfficerWarren W. Wasiewski, M.D.


2009



224,167







111,863



132,396



468,426Former Vice President and Chief Medical Officer


2008



295,000



76,250



65,872



36,875



473,997     (1)
    
    The Company awarded non-equity incentive plan amounts related to
    fiscal 2008 performance in September 2008. The Company did not
    award any non-equity incentive plan amounts for fiscal 2009,
    except to Mr. Loar under a retention plan which paid
    $28,000 on each of March 31, 2009 and June 30, 2009.(2)
    
    The amounts set forth under Option Awards relate to
    outstanding option awards, including those granted during and
    prior to the fiscal year ended June 30, 2009, and are
    valued based on a Black-Scholes option pricing model as used in
    our consolidated financial statements pursuant to Statement of
    Accounting Standards No. 123R, Share-Based
    Payment. The Black-Scholes option pricing model reflects
    certain assumptions regarding variable factors such stock price
    volatility and the term of the option. Stock options have value
    to the 43




---



##### Table of Contents



recipient only as a result of appreciation in the price of our
    common stock. For the purposes of establishing the values shown
    in the table, the model assumed a dividend yield of zero,
    risk-free interest rates of 2.6% to 4.7%, volatility factors of
    67% to 90%, and an expected life of the options of
    43/4
    to
    61/4
    years. For financial reporting purposes, we also used an
    estimated forfeiture rate, but this rate has not been included
    in the balances in the table because the forfeiture rate is an
    overall estimate for the organization as a whole and cannot be
    attributed specifically to any of our executive officers. None
    of the named executive officers received any options to purchase
    common stock during the fiscal year ended June 30, 2009,
    other than Mr. Fletcher, who received his option grant in
    connection with his services as a non-employee director. This
    option to purchase 15,000 shares at an exercise price of
    $0.65 per share (the closing price on the date of grant) was
    granted on November 13, 2008, had a grant-date value of
    $6,591, and contained terms identical to those granted to other
    non-employee directors at the time (see Director
    Compensation below). All option grants provided to
    Mr. Fletcher prior to the fiscal year ended June 30,
    2009 were also for his service as a non-employee director.(3)
    
    All other compensation for Mr. Fletcher represents fees
    earned as member of our Board of Directors and for board
    committee service, including fees of $25,000 per month for
    service as Acting Chief Executive Officer. All other
    compensation for Mr. Freiman represents consulting fees for
    assistance in winding down certain corporate contracts. For
    Mr. Loar, the amount represents a bonus paid upon his
    commencement of employment at NTI in fiscal 2008. For
    Dr. Wasiewski, in fiscal 2009 the amount includes $106,666
    for severance payments following termination of his employment,
    $2,095 for payout of accrued vacation, and $23,635 for expenses
    related to the rental of an apartment near our office in New
    Jersey; in fiscal 2008 the amount includes expenses related to
    the rental of an apartment near our office in New Jersey.(4)
    
    Mr. Fletcher was appointed Acting Chief Executive Officer
    on January 30, 2009 and receives fees of $25,000 per month
    for his services, beginning in February 2009, in addition to his
    regular board fees of $7,500 per quarter. He also received a fee
    of $10,000 for January 2009 related to his service on the
    Special Committee before being named Acting Chief Executive
    Officer.(5)
    
    Mr. Freimans employment as President and Chief
    Executive Officer was terminated by the Board of Directors
    effective December 31, 2008.(6)
    
    Mr. Loar was hired as Vice President and Chief Financial
    officer effective April 1, 2008.  Outstanding
    Equity Awards at Fiscal Year-End
    Option AwardsNumber of

Number ofSecurities

SecuritiesUnderlying

Underlying

OptionUnexercised

Unexercised

Exercise

OptionOptions (#)

Options (#)

Price

ExpirationName

Exercisable

Unexercisable

($)

DateWilliam A. Fletcher


7,142






$
19.25



2/20/20171,428







2.54



11/16/201730,000
(1)


10,000



3.00



5/30/2018



15,000
(2)


0.65



11/13/2018Paul E. Freiman


none



none







Matthew M. Loar


65,625
(3)


159,375
(3)


2.47



4/1/2018Warren W. Wasiewski


none



none







     (1)
    
    This option becomes fully vested with respect to one-half of the
    underlying shares on the date of grant (May 30,
    2008) and vests with respect to one-quarter of the
    underlying shares on each of the first and second anniversaries
    of the date of grant.(2)
    
    The options vest and become fully exercisable upon the first
    anniversary of the grant date (November 13, 2008), provided
    that Mr. Fletcher is a director at such time. 44




---



##### Table of Contents



(3)
    
    225,000 options were granted on April 1, 2008 and vest with
    respect to one-eighth of the underlying shares six months from
    the date of grant and then ratably on a monthly basis over the
    next 42 months.  Option
    Exercises
    Pension
    Benefits
    Nonqualified
    Deferred Compensation
    Potential
    Payments upon Termination or Change in Control
      Director
    Compensation
     45




---



##### Table of Contents



Fees Earned orName

Paid in Cash


Option Awards(1)


TotalAbraham E. Cohen

$
40,000


$
45,440


$
85,440Theodore L. Eliot, Jr.


30,000



31,992



61,992F. Van Kasper


35,000



40,060



75,060Abraham D. Sofaer


30,000



31,992



61,992John B. Stuppin


90,000



42,449



132,449     (1)
    
    The amounts set forth under Option Awards relate to
    outstanding option awards, including those granted during and
    prior to the fiscal year ended June 30, 2009, and are
    valued based on a Black-Scholes option pricing model as used in
    our consolidated financial statements pursuant to Statement of
    Accounting Standards No. 123R, Share-based
    Payment. The Black-Scholes option pricing model reflects
    certain assumptions regarding variable factors such stock price
    volatility and the term of the option. Stock options have value
    to the recipient only as a result of appreciation in the price
    of our common stock. For the purposes of establishing the value
    shown in the table, the model assumed a dividend yield of zero,
    risk-free interest rates of 2.6% to 4.7%, volatility factor of
    80%, and an expected life of the options of
    41/2
    to
    51/2
    years. For financial reporting purposes, we also used an
    estimated forfeiture rate, but this rate has not been included
    in the balances in the table because the forfeiture rate is an
    overall estimate for the organization as a whole and cannot be
    attributed specifically to any of our directors. The grant-date
    value of the option grants made to each of our non-employee
    directors on November 13, 2008 was $6,591.  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    
    each of our directors and director nominees;
    each of our named executive officers as defined
    under the Executive Compensation caption below;
    all of our current directors and executive officers as a
    group; and
    each person or group of affiliated persons known by us to be the
    beneficial owner of more than 5% of our common stock.   46




---



##### Table of Contents



c/o Neurobiological
  Shares





Shares ofShares of

with Right to





Series A

PercentageCommon

Acquire

Total

Percentage

Preferred

of Series AStock

within 60

Beneficial

of Common

Stock

PreferredName and Address

Owned

Days

Ownership

Stock

Owned

StockMAK Capital One(1)


5,220,057



72,856



5,292,913



19.6
%590 Madison Avenue,
    9th Floor

    New York, NY 10022BVF, Inc.(2)


5,288,754







5,288,754



19.6
%900 N. Michigan Avenue, Suite 1100 Chicago,
    Illinois 60611Highland Capital Management, L.P.(3)


4,737,479







4,737,479



17.6
%






Two Galleria Tower13455 Noel Road, Suite 800
    Dallas, Texas 75240Millennium Technology Ventures(4)


1,969,880







1,969,880



7.3
%






747 Third Avenue,
    38th FloorNew York, New York 10017John B. Stuppin


174,484



59,997



234,481



*



100,000



20.2
%Abraham E. Cohen


118,707



55,350



174,057



*







Abraham D. Sofaer


110,931



54,635



165,566



*



100,000



20.2
%F. Van Kasper


43,600



66,139



109,739



*







William A. Fletcher


68,600



38,570



107,170



*







Matthew M. Loar


25,000



75,000



100,000



*







Theodore L. Eliot, Jr.


2,617



40,350



42,967



*







Paul E. Freiman(5)


14,920







14,920



*







Warren W. Wasiewski














*







All current executive officers and directors as a group
    (7 persons)


543,939



390,041



933,980



3.5
%


200,000



40.4
%     *
    
    Less than one percent.  (1)
    
    Shares of common stock owned are based on information contained
    in a Schedule 13G/A filed November 18, 2008 by MAK
    Capital One LLC (MAK Capital), Michael A. Kaufman
    (Kaufman), MAK Capital Fund LP (MAK
    Fund), Paloma International LP (Paloma) and S.
    Donald Sussman (Sussman) According to the
    Schedule 13G/A, (i) MAK Capital beneficially owned
    5,220,057 shares of common stock; (ii) Kaufman
    beneficially owned 5,220,057 shares of common stock;
    (iii) MAK Fund beneficially owned 3,627,192 shares of
    common stock; (iv) Paloma beneficially owned
    1,592,865 shares of common stock; and (iv) Sussman
    beneficially owned 1,592,865 shares of common stock as of
    November 14, 2008. MAK Capital, Kaufman and MAK Fund have
    shared power to direct the vote and disposition of the
    3,627,192 shares of common stock owned by MAK Fund. Paloma,
    Sussman, MAK Capital and Kaufman have shared power to direct the
    vote and disposition of the 1,592,865 shares of common
    stock owned by Paloma. Paloma owns its shares through a
    subsidiary, Sunrise Partners Limited Partnership.(2)
    
    Based on information contained in a Schedule 13D/A filed
    December 24, 2008 by Biotechnology Value Fund, L.P.
    (BVF), Biotechnology Value Fund II, L.P.
    (BVF2), BVF Investments, L.L.C.
    (Investments), Investment 10, L.L.C.
    (ILL10), BVF Partners L.P. (Partners)
    and BVF Inc. (BVF Inc.). According to 47




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##### Table of Contents



the Schedule 13D, (i) BVF beneficially owned
    1,241,336 shares of common stock; (ii) BVF2
    beneficially owned 843,807 shares of common stock;
    (iii) Investments beneficially owned 2,853,250 shares
    of common stock; and (iv) ILL10 beneficially owned
    350,361 shares of common stock as of October 29, 2007.
    Accordingly, beneficial ownership by Partners and BVF Inc.
    includes a total of 5,288,754 shares of common stock.
    Pursuant to the operating agreement of Investments, Partners is
    authorized, among other things, to invest the funds of Ziff
    Asset Management, L.P., the majority member of Investments, in
    shares of the common stock and to vote and exercise dispositive
    power over those shares of the common stock. Partners and BVF
    Inc. share voting and dispositive power over shares of the
    common stock beneficially owned by BVF, BVF2, Investments and
    those owned by ILL10, on whose behalf Partners acts as an
    investment manager and, accordingly, Partners and BVF Inc. have
    beneficial ownership of all of the shares of the common stock
    owned by such parties.(3)
    
    Based on information contained in a Schedule 13G/A filed
    February 17, 2009 by Highland Capital Management, L.P.
    (Highland), Strand Advisors, Inc.
    (Strand) and James Dondero (Dondero).
    According to the Schedule 13G/A, (i) Highland
    beneficially owned 4,737,479 shares of common stock;
    (ii) Strand beneficially owned 4,737,479 shares of
    common stock; and (iii) Dondero beneficially owned
    4,737,479 shares of common stock as of December 31,
    2008. Highland Capital principally serves as an investment
    adviser and/or manager to other persons; Highland Capital may be
    deemed to beneficially own shares owned and/or held by and/or
    for the account of and/or benefit of other persons. Strand
    serves as the general partner of Highland Capital; Strand may be
    deemed to beneficially own shares owned and/or held by and/or
    for the account of and/or benefit of Highland Capital. Dondero
    is the President and a director of Strand; Dondero may be deemed
    to beneficially own shares owned and/or held by and/or for the
    account of and/or benefit of Strand.(4)
    
    Based on information contained in a Schedule 13D filed
    January 23, 2009 by Daniel Burstein and Samuel L. Schwerin
    on behalf of Millennium Technology Value Partners RCM LP.
    According to the Schedule 13D, Daniel Burstein and Samuel
    L. Schwerin each beneficially owned 1,969,880 shares of
    common stock, including 991,259 shares of common stock
    directly owned by Millennium RCM LP and 978,621 shares
    owned directly by Millennium LP. In addition, Samuel L. Schwerin
    is the direct beneficial owner of 110,909 shares for which
    he has sole dispositive and voting power.(5)
    
    Based on information contained in the Form 4 filed with the
    SEC by Mr. Freiman on February 12, 2009. We have no
    knowledge of any changes in Mr. Freimans holdings
    subsequent to that filing.    Number of SecuritiesNumber of Securities


Weighted-Average


Remaining Available forto be Issued Upon


Exercise


Future Issuance Under EquityExercise of


Price of Outstanding


Compensation PlansOutstanding Options,


Options, Warrants


(Excluding SecuritiesWarrants and Rights


and Rights


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security
    holders Stock Option Plans


687,000


$
7.88



2,922,000Stock Purchase Plan










36,000Equity compensation plans not approved by security
    holders  Inducement stock option grant provided under
    NASDAQ Marketplace Rule 4350


150,000



2.47



Total


837,000


$
6.91



2,958,000    48




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##### Table of Contents



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Director
    Independence
    Regulation S-K.
  Related
    Party Transaction Review and Approval
        ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  OUM
 49




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##### Table of Contents



Audit
    Fees
    Year Ended June 30,2009


2008Audit Fees:Consists of fees billed or to be billed for professional
    services rendered for the audit of the Companys financial
    statements for the respective fiscal years, reviews of the
    interim financial statements included in the Companys
    quarterly reports and reviews, consents and comfort letters
    relating to registration statements.

$
194,447


$
329,354Tax Fees:Consists of fees billed for tax planning, assistance with the
    preparation of tax returns and advice on other tax-related
    matters rendered during the respective fiscal years. Fees for
    fiscal 2009 include analysis of tax loss limitations related to
    historical ownership changes that result in limitations on
    annual utilization of tax loss carryforwards.


35,050



18,500Total All Fees:

$
229,497


$
347,854    PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  Financial Statements and Schedules:
    Exhibits:
    Exhibit



Incorporated by Reference

FiledNo.

Description

Form

Date of Filing

Herewith3
.1

Amended and Restated Certificate of Incorporation.

S-3

2/25/20053(i)
.1

Certificate of Amendment to Amended and Restated Certificate of
    Incorporation.

10-Q

2/10/20063
.2

Amended and Restated Bylaws of Neurobiological Technologies, Inc.

8-K

6/20/20073
.3

Certificate of Designation, Preferences and Rights of Series RP
    Preferred Stock of Registrant.

8-A

5/20/20054
.1

Form of Common Stock Certificate.

10-K

9/16/20084
.2

Form of Warrant to Purchase Common Stock, issued March 1, 2004
    to investors in a private placement transaction.

8-K

3/4/20044
.3

Form of Rights Certificate for RP Preferred Stock.

8-A

5/20/20054
.4

Form of Common Stock Warrant issued to certain institutional
    investors as a component of the units in a private placement
    transaction on April 4, 2007.

8-K

4/2/2007 50




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##### Table of Contents



Exhibit



Incorporated by Reference

FiledNo.

Description

Form

Date of Filing

Herewith10
.1

Form of Indemnity Agreement between the Company and its
    directors and officers.*

10-K

9/16/200810
.2

Rights Agreement, dated May 19, 2005, by and between American
    Stock Transfer & Trust Co., as Rights Agent, and the
    Company.

8-A

5/20/200510
.3

Amendment No. 1 to Rights Agreement

8-A

11/5/200710
.4

Amendment No. 2 to Rights Agreement

8-A

11/5/200810
.5

1993 Stock Plan.*

14A

10/9/200110
.6

Amended and Restated 2003 Equity Incentive Plan.*

14A

4/3/200810
.7

2003 Employee Stock Purchase Plan.*

14A

10/9/200310
.8

Office Lease Agreement, dated April 22, 2005, by and between
    CA-Emeryville
    Properties Limited Partnership and the Company.

10-Q

5/10/200510
.9

Commercial Sublease, dated May 18, 2005, between the Company and
    Refac.

10-K

9/28/200510
.10

Termination Agreement, dated as of May 4, 2009, by and between
    the Company and Nordmark Arzneimittel GmbH & Co. KG.

10-Q

5/8/200910
.11

Agreement to Terminate the License and Cooperation Agreement,
    effective as of July 31, 2009, with Respect to Neurobiological
    Technologies, Inc., by and between Merz Pharmaceuticals GmbH and
    the Company.





x10
.12

Termination Agreement to Master Clinical Services Agreement,
    effective as of May 29, 2009, by and between the Company and
    ICON Clinical Research Limited

8-K

6/2/200910
.13

Asset Purchase Agreement, dated September 19, 2005, by and
    between the Company, Neutron ROW Ltd. and Neutron Ltd.

10-Q

11/9/200510
.14

Amendment and Addendum to Collaboration and Services Agreement,
    dated June 23, 2009, by and between Neutron Ltd., Celtic Pharma
    Development Services America, Inc. and the Company.

8-K

6/26/200910
.15

Collaboration and License Agreement, entered into as of November
    29, 2007, by and between Buck Institute for Age Research and the
    Company for the fibroblast growth factor-2.+

10-Q

5/12/200810
.16

Collaboration and License Agreement, entered into as of February
    29, 2008, by and between Buck Institute for Age Research and the
    Company for the Netrin-1 protein.+

10-Q

5/12/200810
.17

Termination Agreement to Collaboration and License Agreements,
    entered into as of June 12, 2009, by and between Buck Institute
    for Age Research and the Company.

8-K

6/15/200910
.18

Employment Offer Letter, dated March 18, 2008, by and between
    the Company and Matthew M. Loar.*

8-K

4/3/200821
.1

Subsidiary of the Company.





x23
.1

Consent of Odenberg, Ullakko, Muranishi & Co. LLP,
    Independent Registered Public Accounting Firm.





x24
.1

Powers of Attorney. (Contained on Signature Page)





x31
.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.





x31
.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.





x32
.1

Certification pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.





x32
.2

Certification pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.





x     +
    
    Confidential treatment has been granted with respect to
    portions of this exhibit pursuant to an application requesting
    confidential treatment under
    Rule 24b-2
    of the Exchange Act. A complete copy of this exhibit, including
    the redacted terms, has been separately filed with the
    Securities and Exchange Commission.*
    
    This exhibit is a management contract or compensatory plan or
    arrangement. 51




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##### Table of Contents



SIGNATURES
      By:
    /s/  William
    A. Fletcher       POWERS OF
    ATTORNEY AND SIGNATURES
      Signature

Title

Date/s/  William
    A. FletcherWilliam
    A. Fletcher

Director and Acting Chief Executive Officer (Principal Executive
    Officer)

August 31, 2009/s/  Matthew
    M. LoarMatthew
    M. Loar

Vice President and Chief Financial Officer
    (Principal Financial Officer and
    Principal Accounting Officer)

August 31, 2009/s/  Abraham
    E. CohenAbraham
    E. Cohen

Chairman of the Board

August 31, 2009/s/  Theodore
    L. Eliot, Jr.Theodore
    L. Eliot, Jr.

Director

August 31, 2009/s/  F.
    Van KasperF.
    Van Kasper

Director

August 31, 2009/s/  Abraham
    D. SofaerAbraham
    D. Sofaer

Director

August 31, 2009/s/  John
    B. StuppinJohn
    B. Stuppin

Director

August 31, 2009  52