Neurobiological Technologies (NTII)

INVESTMENT INCOME (LOSS)

Investment income of $116,000 and $269,000 in the quarter and six months ended December 31, 2006, respectively, increased over the same periods of 2005, resulting primarily from an increase in interest earned on investments during the current year as compared to the prior year due to higher market interest rates.

18

Table of Contents

INVESTMENT INCOME (LOSS)

Investment income of $153,000 in the quarter ended September 30, 2006 increased over the same period of 2005, resulting primarily from increased interest income as market interest rates generally increased over the past year.

INVESTMENT INCOME (LOSS)

Investment income of $140,000 and $228,000 in the quarter and nine months ended March 31, 2006 respectively, increased over the same periods of 2005, resulting primarily from losses on security sales during 2005 as market interest rates generally increased during the prior year as the Company’s held generally longer-term maturities compared with the maturity of securities held in the comparable current periods.

INVESTMENT INCOME (LOSS)

Investment income of $71,000 and $88,000 in the quarter and six months ended December 31, 2005, respectively, increased over the same periods of 2004, resulting primarily from losses on the security sales as market interest rates increased in 2004 resulting from the Company’s holding generally longer-term maturities than with those of the current period.