918112--11/6/2006--NEUROBIOLOGICAL_TECHNOLOGIES_INC

related topics

{product, candidate, development}

{product, liability, claim}

{control, financial, internal}

{stock, price, share}

{acquisition, growth, future}

{property, intellectual, protect}

{personnel, key, retain}

{competitive, industry, competition}

{stock, price, operating}

We may need to raise additional capital to fund ongoing operations. If we are unable to raise additional capital, we may be forced to curtail operations. If we succeed in raising additional capital through a financing transaction, it may adversely affect our stock price. We have restated our previously issued consolidated financial statements for the year ended June 30, 2005 and have a material weakness in our internal control over financial reporting that requires remediation. Pursuant to Section 404 of the Sarbanes-Oxley Act, we have concluded that our internal control over financial reporting was not effective at June 30, 2006. We must meet stringent ongoing requirements of NASDAQ to maintain the listing of our common stock on the NASDAQ Capital Market. We are dependent on Merz and its marketing partners, Forest and Lundbeck, for the successful commercialization of Memantine. Our product candidates are based on new technologies and therefore are subject to numerous inherent risks of failure. We are dependent upon the Celtic entities for the development and commercialization of XERECEPT. We have a history of losses and we may never achieve or maintain profitability. Even if Viprinex is approved for commercialization, it may not be successfully commercialized. Our industry is highly competitive. Because we do not have our own manufacturing facilities, we face risks from outsourcing. The FDA and state and local agencies, and comparable agencies and entities in foreign countries impose substantial requirements on the manufacturing and marketing of human therapeutics through lengthy and detailed laboratory and clinical testing procedures, sampling activities and other costly and time consuming procedures. We have relied and will continue to rely on others for research, development and commercialization of our potential products. Our success will depend, in large part, on our ability to obtain or license patents, protect trade secrets and operate without infringing upon the proprietary rights of others. We have recently made several changes to the composition of our management team and expect to make more. If the members of our management team are unable to work together effectively, our ability to manage our business will suffer. Clinical trials or marketing of any of our potential products may expose us to liability claims from the use of such products, which our insurance may not cover. The market price of our common stock has been, and is likely to continue to be, highly volatile.

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918112--11/6/2006--NEUROBIOLOGICAL_TECHNOLOGIES_INC_/CA/