InTable July 2011, Michael Mullen and William Guinness our current board members, signed settlement agreements to resolve unpaid fees due to them for services rendered during the period of July 2008 through January 31, 2010. As of the settlement date, approximately $172,000 had been accrued for directors fees owed to the two board members who agreed to a reduced payment totaling $22,400. As a result of these transactions approximately $149,000 was recognized as forgiveness of debt. Contents

Audit-relatedTable fees consisted of consent fees paid to PricewaterhouseCoopers, our prior audit firm, related to prior year 10-K disclosures included in the Form 10-K for the year ended December 31, 2010. Contents

ATable beneficial conversion feature associated with preferred stock is recognized as a return to the preferred stockholders and represents a non-cash charge in the determination of net loss attributable to common stockholders. The beneficial conversion feature is recognized in full immediately if there is no redemption date for the preferred stock, or over the period of issuance through the redemption date, if applicable. A beneficial conversion feature associated with debentures, notes or other debt instruments is recognized as discount to the debt and is amortized as additional interest expense using the effective interest method over the remaining term of the debt instrument. Contents

WeTable use the Black-Scholes option-pricing model to calculate the fair value of each option grant on the date of grant. No stock options were granted during the years ended December 31, 2011 and 2010. Contents

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Audit-relatedTable fees consisted of consent fees paid to PricewaterhouseCoopers, our prior audit firm, related to prior year 10-K disclosures included in the Form 10-K for the year ended December 31, 2010. Contents

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WeTable use the Black-Scholes option-pricing model to calculate the fair value of each option grant on the date of grant. No stock options were granted during the years ended December 31, 2011 and 2010. Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2011~~2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-6533

ALSERES PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)


DELAWARE		87-0277826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

239 SOUTH STREET HOPKINTON, MASSACHUSETTS		01748
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (508) 497-2360

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which Registered

Common Stock, $.01 par value

(Excluding Rights to Purchase Preferred Stock)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Based on the last sales price of the registrant’s Common Stock as reported on the Pink Sheets OTC Market on December 3031, ~~2011~~2012 (the last business day of our most recently completed fiscal quarter), the aggregate market value of the shares of voting stock held by non-affiliates of the registrant was $21,~~541~~219,~~076~~506.

As of March 1615, ~~2012~~2013, there were 30,635,720 shares of the registrant’s Common Stock issued and outstanding.

TABLE OF CONTENTS

PART I
Item 1.	Business	31
Item 1A.	Risk Factors	63
Item 1B.	Unresolved Staff Comments	86
Item 2.	Properties	87
Item 3.	Legal Proceedings	87
Item 4.	Removed and Reserved	87
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	97
Item 6.	Selected Financial Data	98
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	1213
Item 8.	Financial Statements and Supplementary Data	1213
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	1213
Item 9A.	Controls and Procedures	1213
Item 9B.	Other Information	1214
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	1315
Item 11.	Executive Compensation	1416
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	1517
Item 13.	Certain Relationships and Related Transactions, and Director Independence	1618
Item 14.	Principal Accountant Fees and Services	1718
PART IV
Item 15.	Exhibits and Financial Statement Schedules	1820
Signatures		4046

In this report, “we”, “us”, and “our” refer to Alseres Pharmaceuticals, Inc. The following are trademarks of ours that are mentioned in this Annual Report on Form 10-K; Alseres™ and Altropane ^®. All other trade names, trademarks or service marks appearing in this Annual Report on Form 10-K are the property of their respective owners and are not the property of Alseres Pharmaceuticals, Inc. or any of our subsidiaries.

PART I

Item 1.

Business

Overview

We are a biotechnology company focused on ~~the development of~~ diagnostic ~~and therapeutic~~ products primarily for disorders in the central nervous system, or CNS. Our clinical ~~and~~product candidate ~~preclinical~~is ~~product~~called ~~candidates~~Altropane ~~are~~and based on the following proprietary technology platform:

•

Molecular imaging program focused on the diagnosis of i) Parkinsonian Syndromes, or PS, including Parkinson’s Disease, or PD, and ii) Dementia with Lewy Bodies, or DLB;

•During ~~Regenerative~~the ~~therapeutics~~second ~~program~~half ~~primarily~~of ~~focused~~2011 and throughout 2012, severe resource constraints forced us to terminate all on-going ~~nerve~~pre-clinical ~~repair~~research inefforts ~~patients~~and ~~who~~to ~~have~~focus ~~had~~our ~~significant~~minimal ~~loss~~resources ofon ~~CNS~~identifying ~~function~~a ~~resulting~~suitable ~~from~~development ~~CNS~~partner ~~trauma~~for our Altropane product candidate. All other development programs were terminated and, wherever possible, in-licensed technology was returned to our licensing partners.

At December 31, ~~2011~~2012, we were considered a “development stage enterprise” and will continue to be so until we ~~commence~~realize ~~commercial~~royalty ~~operations~~revenue from our outlicensed intellectual property. A development stage enterprise is one in which planned principal operations have not commenced or, if its operations have commenced, there has been no significant revenue there from. Development stage companies report cumulative costs from the inception of the enterprise. Our development stage started on October 16, 1992 and continued through December 31, ~~2011~~ 2012.

As of December 31, ~~2011~~2012, we have experienced total net losses since inception of approximately $~~206~~207,~~338~~983,000, stockholders’ deficit of approximately $3026,~~602~~721,000 and a net working capital deficit of approximately $309,~~256~~167,000. The cash and cash equivalents available at December 31, ~~2011~~2012 will not provide sufficient working capital to meet our anticipated expenditures for the next twelve months. As of ~~March~~January 161, ~~2012,~~2013 we ~~had~~have ~~cash~~liquidated ~~and cash~~235,000 ~~equivalents~~shares of ~~approximately~~our Navidea Biopharmaceuticals, Inc. (“Navidea” AMEX: NAVB) common stock for total proceeds of $~~190~~726,~~000~~934. ~~which~~We ~~combined~~have ~~with~~used ~~our~~the ~~ability~~funds to ~~control~~settle ~~administrative~~our lawsuit ~~expenses~~with ~~will~~Children’s ~~enable~~Hospital usand meet our day-to-day ~~meet~~obligations and continue to comply with our ~~anticipated~~regulatory ~~cash~~reporting ~~expenditures~~requirements. As of February 28, 2013, we have 50,000 shares of NAVB common stock which have from January 1, 2013 through ~~April~~March ~~2012~~28, 2013 traded within the range of $2.88—$3.35 a share.

Product Development — Molecular Imaging Program

Altropane Molecular Imaging Agent

The Altropane molecular imaging agent is intended to be used for the differential diagnosis of PS, including PD, and non-PS in patients with an upper extremity tremor. After a series of discussions with the U.S. Food and Drug Administration, or FDA, and our expert advisors, the POET-2 program was designed as a two-part Phase III program. The first part of the program enrolled 54 subjects in a multi-center clinical study to acquire a set of Altropane images which will be used to train the expert readers in the second part of the program, as is the customary process for clinical trials of molecular imaging agents. Enrollment in the first part of POET-2 was completed in January 2009. In April, 2009 we reached agreement with the FDA under the Special Protocol Assessment, or SPA, process for the second part of the Phase III clinical trial program of Altropane. A SPA is a process by which sponsors and the FDA reach an agreement on the size, design and analysis of clinical trials that will form the primary basis of approval. The Phase III program is designed to confirm the diagnostic utility of the agent in anticipation of drug registration. The second portion of the Phase III, POET-2 program covered by the SPA consists of two clinical trials in up to 480 subjects in total to be conducted in parallel at up to 40 medical facilities throughout the US. The subjects to be tested will be 40-80 years of age and have had a tremor in their hand(s) or arm(s) for less than three years. Each subject will be assessed by a general neurologist, an Altropane imaging procedure and a Movement Disorder Specialist considered the “gold standard”. The success of the trial will be determined by measuring the diagnostic efficacy of the neurologist diagnosis compared with the diagnosis determined by the Altropane scan versus the MDS gold standard diagnosis. Based on the trial design and scope covered by the Special Protocol Assessment Agreement for POET-2, we estimate that the total costs to complete the POET-2 program and prepare and submit an NDA for Altropane in the U.S. will be approximately $30 million. This funding is not available at present and there can be no assurance that such funds will be available on acceptable terms if at all.

During 2011 we focused our efforts on pursuing the capital necessary to enable us to execute the Altropane Phase III registration program and on seeking to partner our molecular imaging program with a firm or firms with the resources necessary for the completion of the Phase III clinical program, for the manufacturing and supply of Altropane, and for the launch and commercialization of Altropane. During 2011 we engaged in numerous discussions with potential capital sources as well as potential development and commercialization partners for Altropane. On January 19, 2012 the Company entered into an Option Agreement with Navidea Biopharmaceuticals, Inc. (Amex NAVB), to license [123I]-E-IAFCT Injection (also referred to as Altropane), an Iodine-123 radiolabeled imaging agent, being developed as an aid in the diagnosis of Parkinson’s disease and movement disorders. The option agreement provides Navidea with a 6 month period during which it has exclusive rights to license the asset and complete further diligence and the definitive license for [123I]-E-IACFT. Under the terms of the option agreement, Navidea paid Alseres an option fee of $500,000 upon signing the agreement. Navidea can extend the option period to July 31, 2012 from June 30, 2012, for an additional $250,000. If executed, the terms outlined in the option agreement call for contingent late-stage cash milestone payments totaling $3.0 million and up to 1~~.45 million~~ ~~shares of Navidea stock. In addition, the license terms outlined in the option~~

~~agreement~~In ~~also~~January ~~call~~2012, ~~for~~we ~~royalties~~executed onan ~~net~~Option ~~sales~~Agreement ofwith ~~the~~Navidea ~~approved~~pursuant ~~product~~to which ~~are~~Navidea ~~consistent~~paid ~~with~~Alseres ~~industry~~the non-~~standard~~refundable ~~terms.~~sum ~~Late in 2010 and during 2011 a number~~ of ~~events~~$500,000 ~~occurred that stimulated new interest~~ in ~~the~~exchange ~~Altropane~~for ~~program from potential partners. These included~~ the ~~purchase~~exclusive ofoption ~~Avid Radiopharmaceuticals by Eli Lilly for up~~ to ~~$800 million,~~license the USAltropane ~~approval~~program, ~~and~~to ~~launch~~conduct ofits ~~GE’s~~final ~~DaTscan~~due ~~product,~~diligence ~~a favorable FDA Advisory Panel~~ review of ~~Avid’s~~the ~~imaging~~program ~~product~~ and EUto ~~guidance~~prepare ~~recommending~~the ~~imaging~~paperwork asnecessary ~~first~~for ~~line~~the ~~diagnosis~~execution inof ~~dementias. Despite~~ the ~~option agreement with Navidea, we can provide no assurances that a partnership transaction will occur~~license.

~~The~~On ~~Altropane~~July 31, ~~molecular~~2012 ~~imaging~~we ~~agent~~executed is a ~~radio~~License ~~labeled~~Agreement ~~imaging~~with ~~agent~~Navidea ~~that~~under ~~contains~~which ~~the~~we ~~radioactive~~granted ~~element~~Navidea ~~iodine~~an ~~isotope~~exclusive, ~~123~~worldwide Isublicense ~~and~~to ~~binds with~~research, ~~extremely~~develop, ~~high affinity~~ and ~~specificity~~commercialize ~~to the dopamine transporter, or DAT~~Altropane. ~~The~~In ~~DAT~~connection iswith ~~a protein that is on~~ the ~~surface~~execution ~~membrane~~ of ~~specialized~~this ~~neurons~~agreement, inNavidea ~~the~~made ~~brain that produce dopamine,~~ a ~~key~~one-time ~~neurotransmitter.~~sublicense Weexecution ~~believe~~payment ~~that~~to ~~the~~us ~~amount~~equal ~~of Altropane taken up by the brain is directly proportional~~ to ~~the~~(i) One ~~number~~Hundred ofSeventy-Five ~~DATs~~Thousand ~~that~~Dollars ~~are present in any given area of the brain. Since DATs are on the membrane of dopamine-producing neurons~~($175,000) ~~death~~and of(ii) issued ~~these neurons results in decreased numbers of~~us ~~DATs. Therefore~~300,000 ~~PD,~~shares ~~which is caused by a decreased number~~ of ~~dopamine~~NAVB ~~producing~~common ~~cells, is associated with a marked decrease in the number of DATs~~stock. As a result, when Altropane is administered to patients with PD, its binding is substantially diminished as compared to patients without PD. This decrease in Altropane binding in patients with PD is the theoretical basis for using Altropane imaging as a diagnostic test for PS, including PD.

~~Altropane~~The islicense ~~administered~~agreement byalso ~~intravenous~~provides ~~injection.~~for ~~Since~~contingent ~~Altropane~~milestone ~~contains~~payments ~~radioactive~~of ~~123~~up I,to it$2.9 ~~can~~million, be$2.5 million ~~used~~of aswhich awill ~~nuclear~~principally ~~imaging~~occur ~~agent~~at ~~that~~the ~~can~~time ~~be detected~~of ~~using~~product aregistration ~~specialized~~or ~~nuclear~~upon ~~medicine~~commercial ~~instrument~~sales, ~~known~~and asthe aissuance ~~Single~~of ~~Photon~~up ~~Emission~~to ~~Computed~~an ~~Tomography,~~additional ~~or SPECT, camera~~1.15 million ~~The~~shares ~~strength~~ of ~~the~~Navidea ~~SPECT~~stock, ~~signal~~950,000 ~~generated~~shares byof ~~Altropane~~which isare ~~proportional~~issuable toat the ~~number~~time of ~~DATs~~product registration ~~present~~or ~~and~~upon ~~produces images~~commercial ~~that~~sales. ~~distinguish~~In PSaddition, ~~and~~the ~~non-PS~~license ~~patients.~~terms ~~SPECT~~anticipate ~~cameras~~royalties ~~are~~on ~~widely~~yearly ~~available~~net insales ~~both~~of ~~community~~the ~~and~~approved ~~academic~~product ~~medical~~which ~~centers.~~are ~~The~~consistent ~~scanning~~with ~~procedure~~industry-standard ~~using~~terms ~~Altropane~~and ~~takes~~certain ~~less~~license ~~than~~extension ~~one~~fees, ~~hour~~payable toin ~~complete.~~cash ~~Results~~and shares of ~~these~~common ~~tests~~stock, ~~are~~in ~~usually available~~ the ~~same~~event ~~day~~certain asmilestones ~~the~~are ~~scanning~~not ~~procedure~~met.

We have licensed worldwide exclusive rights to develop Altropane from Harvard University and its affiliated hospitals, which we refer to as Harvard and its Affiliates, including the Massachusetts General Hospital. The license agreement provides for milestone payments and royalties based on product sales that are consistent with industry averages for such products.

~~Altropane~~Brain Diagnostic ~~for~~Centers ~~Parkinsonian~~Opportunity ~~Syndromes (PS)~~

PSWe isare ~~characterized~~presently byconducting ~~loss~~a ofpreliminary ~~dopamine-producing~~feasibility ~~neurons~~assessment ~~resulting~~for in a ~~variety~~new ofbusiness ~~movement~~focused ~~disorders,~~on ~~especially~~organizing ~~tremors~~ and ~~gait~~operating ~~problems.~~a ~~The~~US ~~most prevalent~~network ~~form~~ of PSBrain isDiagnostic Centers PDconcentrating ~~which~~on ~~is a chronic, irreversible,~~ neurodegenerative ~~disease~~conditions. ~~that~~The ~~generally~~centers ~~affects~~will ~~people~~provide ~~over~~screening, ~~50 years~~diagnosis ~~old.~~and PDon-going ismonitoring ~~caused~~of byboth apre-symptomatic ~~significant~~and ~~decrease~~symptomatic inpatients ~~the~~affected ~~number~~by ofneurodegenerative ~~dopamine~~brain ~~producing~~disorders. ~~neurons~~The incenters ~~specific~~will ~~areas of the~~take ~~brain.~~advantage ~~Inadequate production~~ of ~~dopamine~~currently ~~causes,~~available ~~at least~~ in-vitro ~~part,~~diagnostics ~~the~~as PDwell ~~symptoms~~as ofimaging ~~tremor,~~diagnostics ~~muscle~~to ~~retardation~~identify ~~and~~patients ~~rigidity.~~who PDare ~~can~~“at berisk” ~~difficult~~of todeveloping ~~diagnose~~degenerative ~~using~~brain ~~subjective~~disorders. ~~analyses~~We ~~and~~are ~~can~~working, beon ~~confused~~a ~~with~~confidential ~~Essential Tremor~~basis, orwith ~~ET.~~industry ETparticipants ~~manifests~~to ~~with~~assess ~~clinical~~possible ~~symptoms~~support ~~very~~for ~~similar~~the todevelopment ~~those~~ of ~~PD.~~the ~~However,~~potential ETnew ~~patients~~business doincluding ~~not~~capital ~~need~~and ~~the~~human ~~drugs routinely prescribed to PD patients~~resources.

Need for an Objective Diagnosis

According to published data, clinical criteria used to diagnose PS are prone to high error rates, especially in early stages of PD. This highlights the critical need for an effective diagnostic. Presently, patients who have experienced tremors and other evidence of a movement disorder may pursue diagnosis and treatment with a number of medical professionals. These include an internist or general practitioner, also known as a primary care physician, or PCP, a neurologist, or a movement disorder specialist, or MDS, whose practice is focused on movement disorders.

Patients can exhibit symptoms and/or have clinical histories that are inconclusive. A primary tool utilized to diagnose PD or PS is a clinical history and a physical exam. However, studies in the literature have reported error rates in diagnosing PD or PS from a low of 10% for MDSs to as high as 40 to 50% for PCPs.

This high error rate is driving the need for a diagnostic test that provides physicians with additional clinical information to help them make a definitive diagnosis when clinical symptoms and the patient’s history are inconclusive. Further, while the accuracy of MDSs is reported to be higher, the number of MDSs in the United States is limited with current estimates between 300 and 500. The limited availability of MDSs underscores the potential utility of a widely available diagnostic tool such as Altropane.

There are a number of important and potentially harmful results associated with misdiagnosis. These include:

• Patients who are improperly diagnosed as having PD but actually do not (false positive) may be administered medications for PD. These drugs can have damaging effects on individuals who do not actually have PD.

• Patients who are improperly diagnosed as not having PD but actually do (false negative), may not benefit from available treatments, thereby suffering further worsening of symptoms and progression of their disease.

Market Opportunity

It has been estimated that approximately 180,000 individuals in the United States per year present to their physician with new, undiagnosed cases of PD and ET, and are therefore candidates for a scan using the Altropane molecular imaging agent to diagnose or rule out early PS. It has also been estimated by the National Institute of Neurological Disorders and Stroke and the National Parkinson’s Foundation that the number of people in the United States with PD is between 500,000 and 1,500,000. It has been estimated by the Tremor Action Network that there are approximately 10,000,000 people in the United States with ET. In addition, a study done by the World Health Organization claims approximately 2,000,000 individuals suffer from PD in Europe. We expect the number of individuals affected by PD to grow substantially as people continue to live longer and the overall population ages.

Altropane Diagnostic for Dementia with Lewy Bodies (DLB)

DLB is a progressive brain disease and the second most common cause of neurodegenerative dementia. The symptoms of DLB are caused by the build-up of Lewy bodies inside the section of the brain that controls particular aspects of memory and motor control. The similarity of symptoms between DLB and PD, and between DLB and Alzheimer’s disease, can make it difficult to accurately diagnose. As with PD, there is no objective diagnostic tool available in the United States. We believe that the underlying basis for DLB coupled with our existing preclinical and clinical data supports the potential development of Altropane as a diagnostic for DLB. We also believe the potential use of our molecular imaging agents for the diagnosis of DLB could be strategic in our partnering efforts for our molecular imaging program.

It has been estimated by the Alzheimer’s Association that there are approximately 7,000,000 to 10,000,000 people in the United States with dementia of which the journal Age and Ageing estimates that up to approximately 3,000,000 people have DLB. According to Alzheimer Europe, there were approximately 1,800,000 people in Europe with DLB.

Regenerative Therapeutics Program — Nerve Repair

Our nerve repair program is focused on restoring movement and sensory function in patients who have had significant loss of CNS function resulting from traumas such as SCI, stroke, traumatic brain injury, or TBI, and optic nerve damage. Our efforts are aimed at the use of proprietary regenerative drugs and/or methods to induce nerve fibers to regenerate and form new connections that restore compromised abilities. Licensing or acquiring the rights to the technologies of complementary approaches for nerve repair is part of our strategy of creating competitive advantages by assembling a broad portfolio of related technologies and intellectual property.

Resource constraints have severely restricted our ability to progress our regenerative therapeutics program. On May 11, 2010, the Company was notified by Children’s Medical Center Corporation (“CMCC”) of the termination of its license agreements with the Company as a result of the Company’s lack of resources and resulting inability to comply with the performance conditions of the licenses. As of December 31, 2011 CMCC was owed approximately $77,000 in license fees and legal costs associated with the licenses and approximately $530,000 related to sponsored research contracts. Since we were unable to pay the overdue amounts within the cure periods specified in the CMCC licenses, we no longer have the rights to further develop and/or partner the axon regeneration technologies licensed from CMCC.

Brain Health Centers Opportunity

Although there can be no assurance that the transaction contemplated with Navidea will close, we have begun preliminary planning for the redirection of the Company in the event that the transaction is closed.

We are presently conducting a preliminary feasibility assessment for a new business focused on organizing and operating a US network of Brain Health Centers concentrating on neurodegenerative conditions. The centers will provide screening, diagnosis and on-going monitoring of both pre-symptomatic and symptomatic patients affected by neurodegenerative brain disorders. The centers will take advantage of currently available in-vitro diagnostics as well as imaging diagnostics to identify patients who are “at risk” of developing degenerative brain disorders. We are working, on a confidential basis, with industry participants to assess possible support for the development of the potential new business including capital and human resources.

The number of Americans living with neurodegenerative movement disorders such as Parkinson’s disease (PD), and dementias like Alzheimer’s (AD) and Dementia with Lewy Bodies (DLB), is expected to grow from 20 million in 2010 to 30 million by 2030. By 2050, that number is expected to grow to 40 million. Unchecked and without accounting for loss of productivity, the annual cost of care for patients with these diseases will grow from $200 billion today to $500 billion by 2030.

Today, PD, AD and DLB are diagnosed post-symptomatically. By the time diagnosable clinical symptoms appear, the disease is in an advanced stage. The disease has already progressed well beyond the point that current therapies have been shown to have disease modifying effects. Drugs in development are routinely tested in patients with advanced stage disease, where the drugs are least likely to have the disease modifying or arresting affect desired. What is needed are:

•

Early detection, definitive diagnostics and therapeutic drug monitoring tools; and

•

Comprehensive, longitudinal data to enable disease modifying treatments for early stage degenerative brain diseases

5At present our work on this opportunity is preliminary and is focused on identifying an initial location for a pilot site intended to demonstrate the proof of concept for the centers and accessing potential sources of capital. We can provide no assurance that this business will ever be launched or that the capital and human resources necessary to launch and grow the new business will be available on acceptable terms if at all.

At present our work on this opportunity is extremely preliminary and is focused on identifying an initial location for a pilot site intended to demonstrate the proof of concept for the centers. We can provide no assurance that this business will ever be launched or that the capital and human resources necessary to launch and grow the new business will be available on acceptable terms if at all.

Employees

As of December 31, ~~2011~~2012 we employed 3 full-time employees.

Other Information

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, accordingly, file reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information can be read and copied at the public reference facilities maintained by the Securities and Exchange Commission at the Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Information regarding the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains a web site (http://www.sec.gov) that contains material regarding issuers that file electronically with the Securities and Exchange Commission.

Our Internet address is www.alseres.com. We are not including the information contained on our web site as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Additional financial information is contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II, and in Item 8 of Part II of this Annual Report on Form 10-K.

Item 1A.

Risk Factors.

Statements contained or incorporated by reference in this Annual Report on Form 10-K that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements regarding future events and our future results are based on current expectations, estimates, forecasts, and projections, and the beliefs and assumptions of our management including, without limitation, our expectations regarding our product candidates, including the success and timing of our preclinical, clinical and development programs, the submission of regulatory filings and proposed partnering arrangements, the outcome of any litigation, collaboration, merger, acquisition and fund raising efforts, results of operations, selling, general and administrative expenses, research and development expenses and the sufficiency of our cash for future operations. Forward-looking statements may be identified by the use of forward-looking terminology such as “may,” “could,” “will,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms, variations of such terms or the negative of those terms.

We cannot assure investors that our assumptions and expectations will prove to have been correct. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements. Such factors that could cause or contribute to such differences include those factors discussed below. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. If any of the following risks actually occur, our business, financial condition or results of operations would likely suffer.

Risks Related to our Financial Results and Need for Additional Financing

We have incurred losses from operations since inception and anticipate losses for the foreseeable future.

We expect to incur significant operating losses for at least the next three years. The level of our operating losses may increase in the future if more of our product candidates begin human clinical trials. We will never generate revenues or achieve profitability unless we obtain regulatory approval and market acceptance of our product candidates. This will require us to be successful in a range of challenging activities, including clinical trial stages of development, obtaining regulatory approval for our product candidates, and manufacturing, marketing and selling them. We may never succeed in these activities, and may never generate revenues that are significant enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

We require significant funds to conduct research and development activities, including preclinical studies and clinical trials of our technologies, and to commercialize our product candidates. Because the successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to develop and commercialize them. Our funding requirements depend on many factors, including:

As of December 31, 2011, we have experienced total net losses since inception of approximately $206,338,000, stockholders’ deficit of approximately $30,602,000 and a net working capital deficit of approximately $30,256,000. The cash and cash equivalents available at December 31, 2011 will not provide sufficient working capital to meet our anticipated expenditures for the next twelve months. As of March 16, 2012, we had cash and cash equivalents of approximately $190,000 which combined with our ability to control administrative expenses will enable us to meet our anticipated cash expenditures through April 2012.

We are a development stage company.

Biotechnology companies that have no approved products or other sources of revenue are generally referred to as development stage companies. We have never generated revenues from product sales and we do not currently expect to generate revenues from product sales for at least the next three years. IfOur wefuture ~~do generate~~ revenues ~~and~~are ~~operating~~expected ~~profits~~to inbe ~~the~~derived ~~future,~~from ~~our~~royalties ~~ability~~paid to ~~continue~~us toby doNavidea soif inand ~~the~~when ~~long term could be affected by~~ the ~~introduction of~~Altropane ~~competitors’~~product ~~products~~is approved and ~~other~~sold ~~market factors.~~ by

them. There can be no assurances that Altropane will be approved or that sales will result. If we do generate revenues and operating profits in the future, our ability to continue to do so in the long term could be affected by Navidea’s ability to invest in marketing of Altropane and by the introduction of competitors’ products and other market factors.

We have incurred losses from operations since inception and anticipate losses for the foreseeable future.

We expect to incur operating losses for at least the next three years. The level of our operating losses may increase in the future if Navidea fails to satisfy its contractual obligations to develop and commercialize Altropane. We will never generate revenues or achieve profitability unless Navidea or we obtain regulatory approval and market acceptance of our Altropane product. This will require Navidea and/or us to be successful in a range of challenging activities, including clinical trial stages of development, obtaining regulatory approval for Altropane, and manufacturing, marketing and selling it. We may never succeed in these activities, and may never generate revenues that are significant enough to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

As of December 31, 2012, we have experienced total net losses since inception of approximately $207,983,000, stockholders’ deficit of approximately $26,721,000 and a net working capital deficit of approximately $9,167,000. The cash and cash equivalents available at December 31, 2012 will not provide sufficient working capital to meet our anticipated expenditures for the next twelve months. We believe that the cash available as of March 15, 2013 may cover our expenses through April 2013.

As a result of our current lack of financial liquidity and negative stockholders’ equity we may not be able to raise additional capital on favorable terms, if at all.

Since inception, we have primarily satisfied our working capital requirements from the sale of our securities through private placements. These private placements have included the sale and issuance of preferred stock, common stock, promissory notes and convertible debentures.

For the year ended December 31, ~~2011~~2012, we obtained all of our funding from one key investor and our license transaction with Navidea. Our key investor, Mr. Robert Gipson, is a related party to the Company. He serves as a senior director of Ingalls & Snyder and served as a director of the Company in 2004. His activities with the Company are more fully described in the footnotes to the consolidated financial statements contained herein. In the event that Mr. Gipson cannot provide future funding or we cannot obtain any additional funding from sources other than Mr. Gipson, we may need to cease operations or modify our current business plan and in any such event may not be able to continue as a going concern. The financial statements have been prepared assuming that the Company will continue as a going concern basis; however, the report of the independent registered public accounting firm indicates substantial doubt about the Company’s ability to continue as a going concern.

Risks Related to Clinical Development of our Altropane Product Candidate

Navidea is obligated under the license agreement to complete the clinical development of Altropane and to seek its regulatory approval. However, our Altropane product candidate is only one of a number of product candidates in the Navidea development pipeline. We can provide no assurances that development of our Altropane product candidate by Navidea will be or remain a high priority project for Navidea. There can be no assurances that Navidea will have or be able to gain access to the capital and human resources necessary to satisfy its obligations under the license agreement. If Navidea is unable to meet its obligations under the license agreement, we would be forced to terminate the license agreement and attempt to identify a new development partner for the Altropane product candidate.

Risks Related to Commercialization

Our success depends on ~~our~~Navidea’s ability to successfully develop our Altropane product candidate into a commercial product.

To date, we have not marketed, distributed or sold any products ~~and, with the exception of Altropane, all of our technologies and early-stage product candidates are in preclinical development~~. The success of our business depends primarily upon ~~our~~Navidea’s ability to successfully develop and commercialize our product candidates. Successful research and product development in the biotechnology industry is highly uncertain, and very few research and development projects produce a commercial product. In the biotechnology industry, it has been estimated that less than five percent of the technologies for which research and development efforts are initiated ultimately result in an approved product. If we are unable to successfully commercialize Altropane ~~or any of our other~~ product ~~candidates, our business would be materially harmed~~candidate. Successful

research and product development in the biotechnology industry is highly uncertain, and very few research and development projects produce a commercial product. In the biotechnology industry, it has been estimated that less than five percent of the technologies for which research and development efforts are initiated ultimately result in an approved product. If we are unable to successfully commercialize Altropane or any of our other product candidates, our business would be materially harmed and we would likely be forced to cease operations.

Risks Related to Regulation

Our Altropane product candidate is subject to rigorous regulatory review and, even if approved, remains subject to extensive regulation.

Our technologies and product candidates must undergo a rigorous regulatory approval process which includes extensive preclinical and clinical testing to demonstrate safety and efficacy before any resulting product can be marketed. Our research and development activities are regulated by a number of government authorities in the United States and other countries, including the FDA pursuant to the Federal Food, Drug, and Cosmetic Act. The clinical trial and regulatory approval process usually requires many years and substantial cost. To date, neither the FDA nor any of its international equivalents has approved any of our product candidates for marketing.

Obtaining FDA approval to sell our product candidates is time-consuming and expensive. The FDA usually takes at least 12 to 18 months to review an NDA which must be submitted before the FDA will consider granting approval to sell a product. If the FDA requests additional information, it may take even longer for the FDA to make a decision especially if the additional information that they request requires us to complete additional studies. We may encounter similar delays in foreign countries. After reviewing any NDA we submit, the FDA or its foreign equivalents may decide not to approve our products. Failure to obtain regulatory approval for a product candidate will prevent us from commercializing our product candidates.

Other risks associated with the regulatory approval process include:

•

Regulatory approvals may impose significant limitations on the uses for which any approved products may be marketed;

•

Any marketed product and its manufacturer are subject to periodic reviews and audits, and any discovery of previously unrecognized problems with a product or manufacturer could result in suspension or limitation of approvals;

•

Changes in existing regulatory requirements, or the enactment of additional regulations or statutes, could prevent or affect the timing of our ability to achieve regulatory compliance. Federal and state laws, regulations and policies may be changed with possible retroactive effect, and how these rules actually operate can depend heavily on administrative policies and interpretation over which we have no control, and we may possess inadequate experience to assess their full impact upon our business; and

•

The approval may impose significant restrictions on the indicated uses, conditions for use, labeling, advertising, promotion, marketing and/or production of such product, and may impose ongoing requirements for post-approval studies, including additional research and development and clinical trials.

Risks Related to our Intellectual Property

If we are unable to secure adequate patent protection for our technologies; then we may not be able to compete effectively.

At the present time, we do not have patent protection for all uses of our technologies. There is significant competition in the field of CNS diseases~~, our primary scientific area of research and development~~. Our competitors may seek patent protection for their technologies, and such patent applications or rights might conflict with the patent protection that we are seeking for our technologies. If we do not obtain patent protection for our technologies, or if others obtain patent rights that block our ability to develop and market our technologies, our business prospects may be significantly and negatively affected. Further, even if patents can be obtained, these patents may not provide us with any competitive advantage if our competitors have stronger patent positions or if their product candidates work better in clinical trials than our product candidates. Our patents may also be challenged, narrowed, invalidated or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of term of patent protection we may have for our products.

block our ability to develop and market our technologies, our business prospects may be significantly and negatively affected. Further, even if patents can be obtained, these patents may not provide us with any competitive advantage if our competitors have stronger patent positions or if their product candidates work better in clinical trials than our product candidates. Our patents may also be challenged, narrowed, invalidated or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of term of patent protection we may have for our products.

We in-license a significant portion of our intellectual property and if we fail to comply with our obligations under any of the related agreements, we could lose license rights that are necessary to develop our product candidate.

We have entered into license agreements with Harvard University and its affiliated hospitals, or Harvard and its Affiliates, which give us rights to intellectual property that is necessary for our business. These license arrangements impose various development and royalty obligations on us. If we breach these obligations and fail to cure such breach in a timely manner, these exclusive licenses could be converted to non-exclusive licenses or the agreements could be terminated, which would result in our being unable to develop, manufacture and sell products that are covered by the licensed technology.

In order to continue to expand our business we may need to acquire additional product candidates including those in clinical development through in-licensing that we believe will be a strategic fit with us. We may not be able to in-license suitable product candidates at an acceptable price or at all. Engaging in any in-license will incur a variety of costs, and we may never realize the anticipated benefits of any such in-license.

Risks Related to Competition

We are engaged in highly competitive industries dominated by larger, more experienced and better capitalized companies.

The biotechnology and pharmaceutical industries are highly competitive, rapidly changing, and are dominated by larger, more experienced and better capitalized companies. Such greater experience and financial strength may enable them to bring their products to market sooner than Navidea or us, thereby gaining the competitive advantage of being the first to market. Research on the causes of, and possible treatments for, diseases for which we are trying to develop therapeutic or diagnostic products are developing rapidly and there is a potential for extensive technological innovation in relatively short periods of time.

To our knowledge, there is only one company, GE Healthcare (formerly Nycomed/Amersham), that has marketed a diagnostic imaging agent for PD and DLB, DaTSCAN ® . GE Healthcare has obtained marketing approval in Europe. In January, 2011, GE Healthcare obtained approval to market DaTSCAN in the U.S. as well. GE Healthcare has significantly greater infrastructure and financial resources than us. Marketing approval s in the US and Europe combined with their established market presence, and greater financial strength could position GE to make it difficult for Navidea or us to successfully market Altropane if it is approved for sale.

Risks Related to our Stock

Our common stock is deemed to be “penny stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.

Our common stock is deemed to be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”). These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.

Item 1B.

Unresolved Staff Comments

Not applicable.

Item 2.

Properties

Our corporate office is located at 239 South Street in Hopkinton, Massachusetts. We are currently a tenant at will occupying approximately 4,500 square feet of office space. We believe that our existing facility is adequate for our present and anticipated needs.

Item 3.

Legal Proceedings

~~We are subject to legal proceedings in the normal course of business.~~ On March 13, 2012 the Company received notice that Children’s Hospital Boston and Children’s Medical Center Corporation had filed a lawsuit in Middlesex Superior Court, Middlesex County, Massachusetts seeking to recover amounts alleged to be owed by the Company to the plaintiffs ~~totaling $642,906. The Company does not agree that the total amounts claimed~~ in the ~~lawsuit~~amount ~~are~~of in$642,906 ~~fact~~plus ~~owed and will pursue all legal remedies available to it to defend this claim~~costs.

On February 1, 2013 the Company entered into a Settlement Agreement and Release with Boston Children’s Hospital (BCH) and Children’s Medical Center Corporation (CMCC) in full settlement of the lawsuit filed by BCH and CMCC seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $642,906 plus costs.

In settlement of all claims by BCH and CMCC, the Company agreed to pay a lump sum of One Hundred Eighty five Thousand dollars ($185,000) to the plaintiffs. In addition to the lump sum payment, the Company agreed to pay to the plaintiffs an additional sum equal to the then cash value of 20,000 shares of the common stock of Navidea BioPharmaceuticals, Inc. upon the occurrence of the first milestone described in Section 4.2 of the sublicense agreement dated as of July 31, 2012 between Navidea BioPharmaceuticals, Inc. and the Company. This second payment is only due upon the occurrence of the first milestone unless the Company declares bankruptcy or alters its agreement with Navidea in a manner that results in the delay or cancellation of said milestone payment.

On May 2, 2012 the Company received notice that Biostorage Technologies, Inc. had filed a lawsuit in Marion Superior/Circuit Court, Marion County, Indiana seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $119,363. The Company believes that the total amounts claimed in the Biostorage lawsuit are overstated by at least 100%. The Company believes that a high level of uncertainty regarding the outcome, disposition and ultimate liability to the Company related to this lawsuit exists thus we have retained an accrual of $133,000 on our books which reflects the amount of the alleged claim plus additional legal fees. The discovery process in the case is on-going The Company intends to vigorously pursue all available legal and equitable remedies to defend this claim with a goal of settling it at or below the level of liability we believe is actually owed and without a trial.

Item 4.

Mine Safety Disclosures

Not applicable

Item 5.

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

Market Information

The following table sets forth for the periods indicated the high and low closing prices for our common stock for the last two fiscal years. Our common stock is traded on the ~~Pink~~ OTC ~~Markets~~Market under the symbol ALSE.~~PK.~~

	2011		2011		2010		2010
	2012High		2012Low		2011High		2011Low
	High		Low		High		Low
First Quarter (January 1 – March 31)	$	0.51	$	0.15	$	0.24	$	0.12
First Quarter (January 1 – March 31)	$	0.24	$	0.12	$	0.40	$	0.20
Second Quarter (April 1 – June 30)	$	0.30	$	0.07	$	0.16	$	0.06
Second Quarter (April 1 – June 30)	$	0.16	$	0.06	$	0.39	$	0.18
Third Quarter (July 1 – September 30)	$	0.24	$	0.08	$	0.15	$	0.03
Third Quarter (July 1 – September 30)	$	0.15	$	0.03	$	0.30	$	0.18
Fourth Quarter (October 1 – December 31)	$	0.17	$	0.06	$	0.51	$	0.02
Fourth Quarter (October 1 – December 31)	$	0.51	$	0.02	$	0.35	$	0.12

As7 ~~of December 31, 2011 there were approximately 2,000 stockholders of record. This number does not include beneficial owners for whom shares are held by nominees in street name.~~

As of December 31, 2012 there were approximately 2,000 stockholders of record. This number does not include beneficial owners for whom shares are held by nominees in street name.

We have not paid or declared any cash dividends on our common stock and do not expect to pay cash dividends on our common stock in the foreseeable future.

On December 31, 2012 the Company purchased 537,931 shares of its common stock held by Arthur Koenig and 1,793,104 shares of its common stock held by Ingalls and Snyder Value Partners at a purchase price per share of $0.0008 for total proceeds of $1,864. The closing price for the Company’s common stock on December 27, 2012 was $0.08 per share. The shares were purchased in a private transaction.

Item 6.

Selected Financial Data

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

Item 7.

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

Our management’s discussion and analysis of our financial condition and results of operations include the identification of certain trends and other statements that may predict or anticipate future business or financial results that are subject to important factors that could cause our actual results to differ materially from those indicated. See Item 1A, “Risk Factors”.

Results of Operations

Years Ended December 31, ~~2011~~2012 and ~~2010~~2011

Our net loss was $21,~~882~~645,~~214~~476 for the year ended December 31, ~~2011~~2012 compared to a net ~~income~~loss of $~~512~~2,~~419~~882,214 for the year ended December 31, ~~2010~~2011. The net loss for the year ended December 31, 2012 resulted from operating expenses of approximately $1,743,000 and interest expense of approximately $435,000 partially offset by the recognition of $531,000 in revenue. The net loss for the year ended December 31, 2011 resulted from operating expenses of approximately $2,126,000 and interest expense of approximately $1,838,000. These expenses were partially offset by a gain recognized on forgiveness of debt of $~~476~~477,~~837~~000, a gain of $5859,~~814~~000 recognized on the change in method for valuing our FluoroPharma Medical, Inc. stock previously accounted for under the cost method and the reversal of a prior year accrual of $561,000 related to a potential dispute with a ~~contract~~ contract manufacturer. These transactions are described in greater detail in Note 2 and Note 7 of these Consolidated Financial Statements. Net income of $512,419 for the year ended December 31, 2010 was attributable to a gain recognized on early extinguishment of $6,277,100 in debt that was offset by operating expenses of approximately $3,123,000 and interest expense of approximately $2,644,000.

~~Research~~For ~~and~~the ~~development~~year ~~expenses~~ended ~~were~~December 31, 2012, the Company recognized revenue of $93530,~~319~~723. ~~for~~Revenue ~~the~~was ~~year~~comprised ~~ended~~of ~~December 31~~a non-refundable option fee of $500,000 ~~2011~~the ~~compared~~Company toreceived from Navidea Biopharmaceuticals in January 2012 and $~~465~~30,~~449~~723 ~~for~~in revenue recognized from the ~~year~~upfront ~~ended~~sublicense ~~December~~fee received from Navidea Biopharmaceuticals in July 312012. Under the terms of the sublicense agreement, ~~2010.~~Navidea ~~The~~made ~~decrease~~a one-time sublicense execution payment of $~~372~~175,~~130~~000 orand ~~80%~~issued ~~for~~ the ~~year ended~~Company ~~December~~300,000 shares of Navidea common stock (“NAVB”) which had a market value of $1,146,000 as of July 31, ~~2011~~2012. Revenue from the $1,321,000 ~~was~~upfront ~~primarily~~sublicense ~~attributable~~fee towill ~~contract~~be ~~terminations~~recognized ~~related~~ratably from the date the sublicense agreement became effective in July 2012 through the expected life of the last to ~~our~~expire ~~curtailed~~issued ~~spending~~and onsublicensed U.S. patent for Altropane in June 2030.

~~General~~ Research and ~~administrative~~development expenses were $250,~~032,946~~705 for the year ended December 31, ~~2011~~2012 compared to $293,~~657,488~~319 for the year ended December 31, ~~2010~~2011. ~~The~~Under ~~decrease of $624,542 or 24% for~~ the ~~year~~terms ~~ended December 31, 2011 was attributable to (i) decrease in employee payroll and related tax and benefit costs~~ of ~~approximately~~the ~~$254,000~~sublicense ~~resulting~~agreement ~~from~~entered ~~reduced~~into ~~headcount;~~with ~~(ii) reduction~~Navidea in ~~stock~~July ~~compensation expense of $61~~2012,~~000;~~ ~~(iii) reduction~~the inCompany ~~legal~~has ~~expense~~no offurther ~~approximately $48,000;~~cost ~~(iv) a~~obligations ~~reduction~~related into ~~overhead~~Altropane. ~~costs~~Navidea ofis ~~approximately~~responsible ~~$188,000~~for ~~was~~funding ~~comprised of $86,000 in reduced rent~~ and ~~common~~conducting ~~area maintenance charges related to~~ the ~~expiration of our lease in September 2011; $42,000 in reduced utilities expense~~development ~~and $29~~plan,~~000~~ incompleting ~~reduced~~all ~~equipment~~necessary ~~and~~regulatory ~~storage~~filings ~~expense;~~ and ~~(v) a~~managing ~~reduction of approximately $162,000 from~~ the ~~termination~~manufacturing ofand ~~various~~global ~~consulting~~commercialization ~~agreements.~~efforts ~~The~~for ~~decrease was partially offset by approximately $85,000 attributable to an accrual adjustment recorded in 2010~~Altropane.

AnSublicense ~~accrual~~and ~~reversal~~option offees were $~~561~~26,~~195~~536 ~~was recorded~~ for the year ended December 31, ~~2011~~2012. ~~The~~This ~~reversal~~expense ~~related~~ reflects the $25,000 option fee due to aHarvard under ~~potential~~the ~~dispute~~terms ~~with~~of athe ~~contract~~Amended ~~manufacturer~~and ~~that~~Restated ~~had~~License ~~been~~Agreement ~~accrued~~related ~~for~~to the non-refundable option fee the Company received from Navidea in ~~2009~~January as2012. aThe ~~research~~remaining expense reflects the amortization of fees due to Harvard related to the cash and stock ~~development~~consideration ~~expense~~received from Navidea in July 2012 under the terms of the sublicense agreement. As of December 31, 2012, total cash payments of $33,750 are due to Harvard related to these two agreements.

~~Gain~~General onand ~~early extinguishment~~administrative ofexpenses ~~debt~~were ~~was~~ $01,665,605 for the year ended December 31, ~~2011~~2012 compared to $62,~~277~~032,~~100~~946 for the year ended December 31, ~~2010~~2011. InThe ~~September~~decrease ~~2010~~of we$367,341 ~~entered~~or ~~into~~18% afor ~~Note~~the ~~Purchase~~year ~~Agreement~~ended ~~(the~~December 31, ~~“Agreement”)~~2012 ~~with~~was ~~Highbridge International~~attributable ~~LLC~~to (~~the “Seller”~~i) a reduction in employee payroll and ~~Robert~~related ~~Gipson~~tax ~~pursuant~~and tobenefit ~~which~~costs weof ~~agreed~~approximately to$110,000 ~~purchase~~resulting from ~~the~~reduced headcount; ~~Seller~~ (ii) a ~~Convertible~~reduction ~~Promissory~~in ~~Note~~consulting ~~issued~~fees onof ~~May~~approximately $12,000; (iii) 2a reduction in patent expense of approximately $24,000 ~~2007~~resulting tofrom the ~~Seller~~sublicense agreement which transferred all future responsibility for such expense to Navidea; (iv) reduction in ~~the~~outside ~~principal~~directors ~~amount~~fees of approximately $566,~~880~~000 offset by increases in insurance premiums of approximately $10,000. ~~The~~and ~~gain~~outside onvaluation ~~early extinguishment~~services of ~~debt~~$30,000 ~~was~~and ~~recognized~~(v) a ~~based~~reduction onin ~~the~~overhead ~~difference~~costs ~~between~~of approximately $240,000 related to the ~~purchase~~expiration ~~price~~and reorganization of our office lease in September 2011. The overhead reductions are attributable to lower rent expense and common area maintenance charges of approximately $163,000, the ~~debt~~elimination of approximately $~~602~~32,~~700~~000 ~~and~~in ~~the~~non-cash ~~carrying~~charges ~~value~~for the amortization of ~~the~~leasehold ~~debt~~improvements, a reduction in non-cash depreciation expense of approximately $57,~~880,~~000 and ~~accrued~~the ~~interest~~reduction of approximately $~~999~~24,~~800~~000 in utility expenses. In addition, office expenses

~~Other income of $43,814 was primarily~~ attributable to ~~the~~equipment ~~issuance~~rental toand ~~the~~supplies ~~Company~~decreased ofby ~~39,209 restricted~~approximately ~~shares of FluoroPharma Medical, Inc. common stock with a closing price of~~ $~~1.88 on September 30~~10, ~~2011~~000. ~~Although~~The ~~the~~savings ~~shares~~realized ~~were~~from ~~restricted~~these ~~under~~reductions ~~Rule 144 and had very light trading volume, they~~ were ~~trading~~partially onoffset aby ~~public~~an ~~exchange~~increase and could no longer be accounted for under the cost method. Taking into consideration the shares trading restrictions and light trading volume, the shares were recorded in the Condensed Consolidated Balance Sheet as of ~~September 30, 2011 at a 20% discount or~~approximately $~~1.50~~20,000 ~~per~~attributable ~~share. The change in method for valuing these shares form the cost method~~ to ~~the~~complying ~~fair~~with ~~value~~additional ~~method~~regulatory ~~resulted~~reporting inrequirements ~~the~~and ~~recognition~~investor ofrelations ~~a gain of $58,814~~expense. ~~This transaction is described in greater detail in Note 2 of these Consolidated Financial Statements.~~

~~Forgiveness~~On February 15, of2013, ~~debt~~Alseres ~~totaling $476~~Pharmaceuticals,~~837~~ ~~was~~Inc. ~~recognized for~~ (the ~~year~~“Company”), ~~ended~~entered ~~December 31,~~into ~~2011~~Settlement ~~compared~~Agreements towith $0Michael ~~for~~Mullen ~~the~~and ~~year ended~~William ~~December 31~~Guinness, ~~2010.~~both Inmembers ~~July~~of ~~2011,~~the ~~John~~Board ~~Preston,~~of ~~Henry~~Directors ~~Brem,~~of ~~Gary~~the ~~Frashier~~Company ~~and~~pursuant ~~Robert~~to ~~Langer~~which ~~signed~~the ~~settlement~~Company ~~agreements~~ agreed to ~~resolve~~satisfy ~~unpaid~~certain ~~fees~~outstanding ~~due~~obligations to ~~them~~these ~~for~~individuals ~~services~~which, ~~rendered~~in ~~during~~aggregate, ~~the~~totaled ~~period~~$220,734 ofby ~~July~~issuing ~~2008~~fully ~~through~~vested ~~January~~options ~~2010.~~to Aspurchase ~~of the settlement date~~ a total of ~~$358~~167,~~500~~400 ~~had~~shares ~~been~~of ~~accrued~~the ~~for~~common ~~director~~stock ~~and~~of ~~consulting~~Alseres ~~fees. Per the agreements~~Neurodiagnostics, ~~each~~Inc. ~~former~~(a ~~board~~subsidiary ~~member~~of ~~was~~the Company) ~~issued~~out ~~one~~at ~~share~~a ofpurchase ~~stock~~price ~~for~~to ~~each~~be ~~dollar~~established ~~owed.~~by ~~The~~the Company ~~stock~~coincident ~~closed~~with atthe ~~$.08~~closing ~~per~~of ~~share~~an onequity ~~the~~financing ~~effective date~~for ofAlseres ~~the~~Neurodiagnostics, ~~agreements~~Inc. AsThe aoptions ~~result~~must ofbe ~~these~~exercised, ~~transactions~~if ~~$327~~at all,~~570~~ ~~was~~in ~~recognized~~whole asor ~~forgiveness~~in ofpart, ~~debt.~~on Inor ~~July~~before ~~2011~~February 28, 2018. ~~Michael~~The ~~Mullen~~common ~~and~~stock ~~William~~of ~~Guinness~~Alseres ~~our~~Neurodiagnostics, ~~current~~Inc. ~~board~~to ~~members,~~be ~~signed~~issued ~~settlement~~pursuant ~~agreements~~ to ~~resolve~~the ~~unpaid~~options ~~fees~~will ~~due~~bear toall ~~them for~~appropriate ~~services~~restrictive ~~rendered~~legends ~~during~~regarding ~~the~~disposition ~~period~~or resale of ~~July~~the ~~2008~~common ~~through~~stock. ~~January 31,~~Prior ~~2010.~~to Asentering ofinto the ~~settlement~~Settlement ~~date~~Agreements, ~~approximately~~Mr. Mullen ~~$172,000~~and Mr. Guinness had ~~been~~not ~~accrued~~received payment for ~~directors~~board fees ~~owed~~since to2010. ~~the~~As ~~two~~of ~~board~~December ~~members~~31, ~~who~~2012 ~~agreed~~the toCompany had a ~~reduced~~liability ~~payment~~of ~~totaling~~ $22167,400~~. As~~ ato ~~result~~Messrs. ofMullen ~~these~~and ~~transactions~~Guinness ~~approximately~~which ~~$149,000~~ was ~~recognized~~settled asin ~~forgiveness~~2013 ofas ~~debt~~described above.

~~Interest~~Other ~~expense~~income of $~~1,838,484~~905 was ~~incurred~~ recorded for the year ended December 31, ~~2011~~2012 compared to $243,~~643,630~~814 for the year ended December 31, ~~2010~~2011. ~~The~~Other income ~~decrease~~ of $~~805~~43,~~146~~814 orwas ~~30%~~primarily ~~for~~attributable to the ~~year~~issuance ~~ended~~to ~~December 31~~the Company of 39,209 ~~2011~~restricted ~~was~~shares ~~attributable~~of toFluoroPharma ~~the~~Medical, ~~early~~Inc. ~~extinguishment~~common stock with a closing price of $51.88 on September 30,~~880,000~~ 2011. Although the shares were restricted under inRule ~~debt~~144 inand ~~September~~had ~~2010.~~very ~~The~~light ~~decrease~~trading involume, ~~interest~~they ~~expense~~were ~~related~~trading toon ~~this~~a ~~transaction~~public ~~was~~exchange ~~partially~~and ~~offset~~could byno ~~approximately~~longer ~~$2,240,000~~be inaccounted ~~new~~for ~~demand~~under ~~note~~the ~~obligations~~cost ~~which~~method. ~~bear~~Taking ~~interest~~into atconsideration the ~~rate~~shares oftrading ~~7% per~~restrictions ~~annum.~~and ~~Also~~light ~~contributing~~trading tovolume, the shares were ~~decrease~~recorded in ~~interest~~the ~~expense~~Condensed ~~for~~Consolidated ~~the~~Balance ~~year~~Sheet ~~ended~~as ~~December~~of September 3130, 2011, ~~was~~at ~~that~~a no20% ~~interest~~discount ~~expense~~or ~~related~~$1.50 toper ~~the~~share. ~~beneficial~~The ~~conversion~~change ~~feature~~in ~~was~~method ~~recorded~~for invaluing ~~2011~~these asshares ~~compared~~from tothe ~~approximately~~cost ~~$724,000~~method ofto ~~interest~~the ~~expense~~fair ~~recorded~~value ~~for~~method resulted in the ~~year~~recognition of a ~~ended~~gain ~~December 31,~~of ~~2010~~$58,814.

~~Investment~~Forgiveness ~~income~~of debt totaling $476,837 was ~~generated~~recognized ~~from~~for ~~funds~~the ~~held~~year inended aDecember 31, ~~money~~2011. ~~market~~In ~~account~~July 2011, John Preston, Henry Brem, Gary Frashier and ~~showed~~Robert noLanger ~~significant~~signed settlement agreements to resolve unpaid fees due to them for services rendered during the period of July 2008 through January 2010. As of the settlement date a total of $358,500 had been ~~change~~accrued for director and consulting fees. Per the ~~year~~agreements, ~~ended~~each ~~December 31~~former board member was issued one share of stock for each dollar owed. The Company stock closed at $.08 per share on the effective date of the agreements. As a result of these transactions $327,570 ~~2011~~was recognized as ~~compared~~forgiveness of debt. In July 2011, Michael Mullen and William Guinness our current board members, signed settlement agreements to resolve unpaid fees due to them for services rendered during the ~~year~~period ~~ended~~of ~~December~~July 2008 through January 31, 2010. As of the settlement date, approximately $172,000 had been accrued for directors fees owed to the two board members who agreed to a reduced payment totaling $22,400. As a result of these transactions approximately $149,000 was recognized as forgiveness of debt.

Interest expense of $434,551 was incurred for the year ended December 31, 2012 compared to $1,838,484 for the year ended December 31, 2011. The decrease of $1,403,932 or 76% for the year ended December 31, 2012 was attributable to the debt reduction agreements signed in the fourth quarter of 2011. In December 2011, Robert Gipson and Thomas Gipson converted $7,172,412 of their convertible notes payable into common stock of the Company. The debt reduction agreement provided that all future interest related to these promissory notes would be waived. In November 2011, the Company further reduced its debt obligations by purchasing from Robert Gipson (the “Holder”) an unsecured promissory note, pursuant to which the Company’s wholly owned subsidiary, Neurobiologics Inc., had borrowed an aggregate principal amount of $1,000,000 (“the Note”) dated February 11, 2009. The savings associated with the debt reduction agreements were partially offset by $2,240,000 of new debt obligations entered into with Robert Gipson during 2011 and an additional $510,000 in new debt obligations entered into during 2012.

Liquidity and Capital Resources

To date, we have dedicated most of our financial resources to the research and development of our product candidates, general and administrative expenses (including costs related to obtaining and protecting patents). Since inception, we have primarily satisfied our working capital requirements from the sale of our securities through private placements. These private placements have included the sale and issuance of preferred stock, common stock, promissory notes and convertible debentures.

For the year ended December 31, 2011, we had obtained all of our funding from Robert Gipson. In the event that Mr. Gipson cannot provide future funding or we cannot obtain any additional funding from sources other than Mr. Gipson, we may need to cease operations or modify our current business plan and in any such event may not be able to continue as a going concern.

For the year ended December 31, 2011, we completed several large non-cash transactions which reduced our outstanding debt obligations.

Forgiveness of accrued interest totaling $6,328,306 was recognized for the year ended December 31, 2011 compared to $999,800 for the year ended December 31, 2010.

In November 2011, we purchased from Robert L. Gipson (the “Holder”) an unsecured promissory note, pursuant to which our wholly owned subsidiary, Neurobiologics Inc., had borrowed an aggregate principal amount of $1,000,000 (“the Note”) dated February 11, 2009. At the time of the purchase, $195,807 of interest had accrued on the Note. The purchase price for the Note and all accrued interest was $1,000. This transaction resulted in a reduction of $195,807 in accrued interest expense.

In December 2011 we entered into an Amendment agreement with Robert Gipson, Thomas Gipson, Arthur Koenig and Ingalls & Snyder LLC (“the Purchasers”) of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in March, 2007. The Amendment agreement provided that each Purchaser would waive their respective right to be paid any and all interest accrued or to be accrued pursuant to the promissory notes issued under the Note Purchase Agreement. This transaction resulted in a reduction of $6,132,499 in accrued interest expense.

~~On January 19~~ $9,167,000. ~~2012~~The wecash ~~entered~~and ~~into~~cash anequivalents ~~Option~~available ~~Agreement~~at ~~with Navidea Biopharmaceuticals~~December 31, ~~Inc.,~~2012 ~~to license~~will ~~[123I]-E-IAFCT~~not ~~Injection~~provide ~~(also~~sufficient ~~referred~~working capital to asmeet ~~Altropane),~~our ananticipated ~~Iodine-123~~expenditures ~~radio~~for ~~labeled~~the ~~imaging~~next ~~agent,~~twelve ~~being~~months. ~~developed~~We believe asthat anthe ~~aid~~cash inavailable ~~the~~as ~~diagnosis~~ of ~~Parkinson’s~~March 15, ~~disease~~2013. ~~and~~As ~~movement~~of ~~disorders.~~January 1, ~~The~~2013 ~~option~~we ~~agreement~~have ~~provides~~liquidated ~~Navidea~~235,000 ~~with~~shares ~~a 6~~of ~~month~~our ~~period~~NAVB ~~during~~common ~~which~~stock itfor ~~has~~total ~~exclusive~~proceeds ~~rights~~of to$726,934. ~~license~~We have used the ~~asset~~funds ~~and~~to ~~complete~~settlement ~~further~~our ~~diligence~~lawsuit ~~and~~with ~~the~~Children’s Hospital ~~definitive~~and ~~license~~meet ~~for~~our ~~[123I]~~day-Eto-~~IACFT.~~day ~~Under~~operation ~~the~~needs ~~terms~~including of the ~~option~~cost ~~agreement,~~to ~~Navidea~~comply ~~paid~~with ~~Alseres~~regulatory anreporting ~~option~~requirements. ~~fee~~As of ~~$500,000 upon signing the agreement. Navidea can extend the option period from June~~February 3028, ~~2012 to July 31~~2013, ~~2012,~~we ~~for~~had ~~an additional $250~~50,000. Ifshares ~~executed,~~remaining ~~the~~of ~~terms~~NAVB ~~outlined~~common instock ~~the~~which ~~option~~has ~~agreement~~a ~~call~~trading range for ~~contingent~~the ~~late-stage~~previous ~~cash~~90 days ~~milestone~~of ~~payments totaling~~between $32.088 ~~million~~- ~~and up to 1~~$3.~~45 million~~35 ~~shares~~per ~~of Navidea stock~~share. InWe ~~addition,~~believe ~~the~~that ~~license terms outlined in~~ the ~~option~~cash ~~agreement~~available ~~also~~as ~~call for royalties on net sales~~ of ~~the~~March 15, ~~approved~~2013 ~~product~~may ~~which~~cover ~~are~~our ~~consistent~~expenses ~~with~~through ~~industry-standard terms~~April 2013.

For the year ended December 31, 2012, the Company generated $675,000 in cash receipts and was issued 300,000 shares of Navidea (“NAVB”) common stock attributable to option and sublicense agreements for Altropane. The Company used the cash to cover its current operating expenses. The Company plans to fund future working capital requirements through the orderly sale of its shares in Navidea common stock and from potential future consideration due to the Company pursuant to its sublicense agreement.

Our future working capital requirements have been reduced substantially due to the terms of the sublicense agreement with Navidea. Per the agreement, Navidea will be responsible for conducting and funding all future development, regulatory filings, manufacturing and global commercialization of Altropane. The Company will have no further cost obligations related to Altropane. Our future working capital requirements will be determined by our ability to control certain necessary expenditures in connection with operating as a public company.

Our major source of future working capital will come in the form of additional shares of Navidea common stock as Navidea attains certain milestones. The sublicense agreement provides for contingent milestone payments to the Company of up to $2.9 million and the issuance of up to an additional 1.15 million shares of Navidea common stock. Milestone payments of $2.5 million and the issuance of 550,000 shares of Navidea common stock are due to the Company at the time of product registration. The Company will be issued an additional 400,000 shares of Navidea common stock if certain cumulative net sales of the approved product are achieved. In addition, the license terms anticipate royalties on yearly net sales of the approved product which are consistent with industry-standard terms and certain license extension fees, payable in cash and shares of common stock, in the event certain milestones are not met.

As of February 15, 2013, the Company had completed the sale of 235,000 shares of NAVB common stock for total proceeds of $726,934. The resulting loss of $170,766 from these sales will be recognized in the condensed consolidated comprehensive loss statement in the first quarter of 2013.

Operating Activities

Net cash used for operating activities was $21,~~484~~261,~~803~~466 ~~for the~~ year ended December 31, ~~2011~~2012 compared to $2,~~950~~484,~~667~~803 for the year ended December 31, 2011. Net cash used for operating activities for the year ended December 31, ~~2010~~2012 reflects our curtailment of operations pending additional funding, the reduction in accrued interest expense associated with the debt reduction agreements signed in the fourth quarter of 2011 and the receipt of $675,000 from Navidea Biopharmaceuticals related to our Altropane product.

Forgiveness of accrued directors and consulting fees totaling $476,837 was recognized for the year ended ~~December 31,~~ ~~2011 compared to $0 for the year ended~~ December 31, ~~2010~~2011.

In11 July 2011 four former board members signed settlement agreements to resolve unpaid fees due to them for services rendered during the period of July 2008 through January 2010. As of the settlement date a total of $358,500 was owed for directors and consulting fees. Per the agreements, each former board member was issued one share of stock for each dollar owed. The Company stock closed at $.08 per share on the effective date of the agreements. As a result of these transactions $327,570 was recognized as forgiveness of debt.

Investing Activities

Investing activities provided cash of $~~301,388~~0 for the year ended December 31, ~~2011~~2012 compared to $35301,~~017~~388 of cash provided by investing activities for the year ended December 31, ~~2010~~2011.

Cash provided by investing activities for the year ended December 31, 2011 reflects the refund of $184,763 in security deposits which were used to satisfy the remaining lease obligation on the Newbury Street property and pay outstanding rent and common area maintenance obligations on the South Street property. In December 2011 we received a blanket release for our indemnity trust funds totaling $115,568. As such, those funds were reclassified to cash and cash equivalents in the Consolidated Balance Sheet.

Cash provided by investing activities for the year ended December 31, 2010 reflects scheduled refunds of security deposits on the Newbury Street property in the amount of $34,865.

Financing Activities

Financing activities provided cash of $2833,~~220,744~~000 for the year ended December 31, ~~2011~~2012 compared to $2,~~699~~220,~~200~~744 for the year ended December 31, ~~2010~~2011.

Cash provided by financing activities for the year ended December 31, 2012 reflects $510,000 in proceeds from the issuance of demand notes payable issued to Robert Gipson. All notes bear interest at the rate of 7% per annum. The Company used $1,866 to repurchase 2,331,035 shares @ $.0008 per share.

Cash provided by financing activities for the year ended December 31, 2011 reflects $2,240,000 in proceeds from the issuance of demand notes payable issued to Robert Gipson. All notes bear interest at the rate of 7% per annum. Proceeds of $18,256 were used to repurchase 3,977,390 shares of our common stock.

~~Cash~~A ~~provided~~summary ~~by financing~~of ~~activities~~financings ~~for~~completed ~~the~~through ~~year ended~~ December 31, ~~2010~~2012 ~~reflects~~can ~~$3,310,000~~be infound ~~proceeds from the issuance of demand notes payable issued to Robert Gipson of which $602,700 was used~~ in ~~the~~Note ~~early~~7 ~~extinguishment~~ of ~~debt~~these ~~and~~Consolidated ~~$8,100~~Financial ~~was used to repurchase 270,000 shares of common stock from Robert Gipson~~Statements.

A summary of financings completed through December 31, 2011 can be found in Note 6 of these Consolidated Financial Statements.

Impact of Recently Issued Accounting Pronouncements

See Note 1 to the Notes to Consolidated Financial Statements — “Recent Accounting Pronouncements”.

Off-Balance Sheet Arrangements

We had no “off balance sheet arrangements” (as defined in Item 303(a) (4) of Regulation S-K) for the year ended December 31, ~~2011~~2012.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements which have been prepared by us in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. ~~Our~~We ~~estimates~~base ~~include~~our ~~those~~estimates ~~related~~on toauthoritative ~~marketable~~literature ~~securities, research contracts, the fair value~~ and ~~classification of financial instruments~~pronouncements, ~~our lease accrual and stock-based compensation. We base our estimates on~~ historical experience and on various other assumptions that we believe ~~believed~~are ~~to be~~ reasonable under the circumstances. ~~Actual~~Although we regularly assess these estimates, actual results ~~may~~could differ materially from these estimates under different assumptions or conditions. Changes in estimates are recorded in the period in which they become known.

While all of our significant accounting policies are described in Note 1 to our consolidated financial statements, we believe that our accounting policies relating to revenue recognition are especially important to aiding you in fully understanding and evaluating our reported financial results.

Revenue Recognition

The Company evaluates multiple element revenue arrangements under FASB ASC 605-25, Multiple-Element Arrangements (as amended by ASU No. 2009-13). In addition to the form of the arrangement, the substance of the arrangement is also considered in determining whether separate agreements entered into, at or near the same time,

that include elements that are interrelated or interdependent should be treated as one multiple-element arrangement. If the Company concludes that separate agreements represent one arrangement, then all the elements in the separate agreements are combined into one multiple-element arrangement for accounting purposes.

Revenues from non-refundable license fees are recognized upon receipt of the payment if the license has stand-alone value, we do not have ongoing involvement or obligations, and we have determined the best estimate of the selling price for any undelivered items. When non-refundable license fees do not meet all of these criteria, the license revenues are recognized over the expected period of performance.

We will periodically review our expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license fees. We will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement. We could accelerate revenue recognition for non-refundable upfront payments or license fees in the event of an early termination of the agreements. Alternatively, we could decelerate such revenue recognition if our period of involvement is extended. While changes to such estimates have no impact on our reported cash flows, our reported revenue is significantly influenced by our estimates of the period over which our obligations are expected to be performed and, therefore, over which revenue will be recognized.

Revenues associated with substantive, at-risk milestones pursuant to our licensing agreements are recognized upon achievement of the milestones. We consider a milestone to be substantive at the inception of the arrangement if it is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item as a result of a specific outcome resulting from our performance to achieve the milestone, it relates solely to past performance and it is reasonable relative to all of the deliverables and payment terms within the arrangement. Non-refundable contingent future amounts receivable in connection with future events specified in our licensing agreements that are not considered milestones will be recognized as revenue when payments are earned by our counterparties through completion of any underlying performance obligations, the amounts are fixed or determinable and collectability is reasonably assured.

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

Item 8.

Financial Statements and Supplementary Data

The information required by Item 8 is included on pages 18 - 39.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

Item 9A.

Controls and Procedures

As of the end of the period covered by this annual report on Form 10-K, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)). That evaluation was performed under the supervision and with the participation of its management, including its Chief Executive Officer and its Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms, and that such information is accumulated and communicated to our management, including our certifying officer, to allow timely decisions regarding the required disclosure.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective for the year ended December 31, 2011. This annual report does not include an attestation report of the Company’s independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent public accounting firm pursuant to rules of the Securities and Exchange Commission that requires the Company to provide only management’s report in this annual report.

In the course of its assessment for fiscal year 2012, management identified a control deficiency. During the course of the evaluation, management determined that subsequent to the end of the fiscal year, but prior to completing all adjustments and disclosures necessary for a fair presentation of our financial statements that the departure of a key member of the accounting and reporting department created a lack of sufficient staff to segregate accounting duties. Management believes this control deficiency is primarily the result of the Company employing, due to its limited size, the equivalent of only one person performing all accounting-related on-site duties. As a result, Alseres does not maintain adequate segregation of duties within its critical financial reporting applications, the related modules and financial reporting processes. This control deficiency could result in a misstatement of our interim or annual consolidated financial statements that would not be detected. Accordingly, management has determined that this control deficiency constituted a material weakness, and that the Company’s internal control over financial reporting was not effective, as of December 31, 2012.

Management has discussed the material weakness and related potential corrective actions with the Audit Committee and Board of Directors of the Company and Alseres’ independent registered public accounting firm. As part of our 2013 assessment of internal control over financial reporting, our management will test and evaluate additional controls implemented, if any, to assess whether they are operating effectively. Our goal is to take all actions possible given our financial condition to remediate any material weakness and enhance our internal controls, but we cannot guarantee that our efforts, if any, will result in the remediation of our material weakness or that new issues will not be exposed in the process. In designing and evaluating our internal control over financial reporting, management recognizes that any controls, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, with the Company will be detected.

In connection with the evaluation referred to in the foregoing paragraph, we have made changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934) during the fiscal year ended December 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As described in the preceding paragraph subsequent to the end of the fiscal year, but prior to completing all adjustments and disclosures necessary for a fair presentation of our financial statements that the departure of a key member of the accounting and reporting department created a lack of sufficient staff to segregate accounting duties. Accordingly, management has determined that this control deficiency constituted a material weakness, and that the Company’s internal control over financial reporting was not effective, as of December 31, 2012.

Changes in internal controls over financial reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information

12 None

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

As of December 31, ~~2011~~2012 our Board of Directors (the “Board”) consisted of three directors.

	Age		~~Year firstelected Director~~	~~Position(s)~~Year ~~with~~firstelected ~~the Company~~Director		Position(s) with the Company
Peter G. Savas	63	64	~~2004~~	~~Chairman of the Board, Chief Executive Officer and Director~~	2004	Chairman of the Board, Chief Executive Officer and Director
Michael J. Mullen, C.P.A.	53	54	~~2004~~	~~Director~~	2004	Director
William Guinness	72	73	~~2006~~	~~Director~~	2006	Director

Peter G. Savas has been the Chairman of the Board and our Chief Executive Officer since September 2004. From March 2004 to September 2004, Mr. Savas was the Managing Partner of Tughill Partners, a life sciences consulting firm. From September 2000 to March 2004, Mr. Savas served as Chief Executive Officer and President and, from April 2001 to March 2004, as Chairman, of Aderis Pharmaceuticals, Inc., a privately-held biopharmaceutical company. From 1992 to 2000, Mr. Savas served as President of Unisyn, Inc., a contract manufacturer of biologics, and was also Unisyn’s Chief Executive Officer from 1995 to 2000. Mr. Savas serves on the board of directors of pSivida Corp., a leading drug delivery company.

Michael J. Mullen has been a member of our Board since June 2004. Since May 2011, Mr. Mullen has been the Chief Financial Officer of Rapid Micro Biosystems, Inc. a rapid microbial detection company. From June 2010 to May 2011, Mr. Mullen was an independent consultant. From December 2009 to June 2010, Mr. Mullen was Interim Chief Financial Officer of Valeritas, Inc., a medical technology company. From July 2006 to October 2009, Mr. Mullen was the Chief Financial Officer of Magellan Biosciences, Inc., a clinical diagnostics company.

William Guinness has been a member of our Board since July 2006. Mr. Guinness was Chairman of Sibir Energy plc, a UK independent oil and gas production company, from March 1999 up to August 2009 when the company was taken over. He was previously a Non-Executive Director of Pentex Energy plc and Pentex Oil plc. Since 1988, Mr. Guinness has been involved with various private venture capital operations, which cover areas as diverse as metal manufacturing, general aviation and fine art consultancy. Mr. Guinness is also a director of a number of private companies involved in a wide range of commercial activities. Mr. Guinness previously served on our Board of Directors from June 30, 2003 to September 20, 2003.

Code of Business Conduct and Ethics

We have adopted a written Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.


Executive Officers	Position	In Position Since
Peter G. Savas	Chairman of the Board and Chief Executive Officer	September 2004
Kenneth L. Rice, Jr., J.D., L.L.M., M.B.A.	Executive Vice President, Finance and Administration, Chief Financial Officer and Secretary	September 2005 (Executive Vice President, Finance and Administration and Chief Financial Officer since July 2005)

Kenneth L. Rice, Jr . was appointed Executive Vice President, Finance and Administration and Chief Financial Officer in July 2005. Mr. Rice was appointed Secretary in September 2005. In June 2005, Mr. Rice served as a part-time consultant to the Company. From April 2001 to June 2005, Mr. Rice served as Vice President, Chief Financial Officer, Chief Commercial Officer and Secretary of Aderis Pharmaceuticals, Inc., a privately-held ~~biopharmaceutical company. From August 1999 through March 2001, Mr. Rice served as Vice President and Chief Financial Officer of MacroChem Corporation, a publicly-traded drug delivery company.~~

biopharmaceutical company. From August 1999 through March 2001, Mr. Rice served as Vice President and Chief Financial Officer of MacroChem Corporation, a publicly-traded drug delivery company.

No family relationships exist between any of our executive officers and our directors. Our executive officers are elected annually by the board of directors and serve until their successors are duly elected and qualified.

Audit Committee

Our Board has a standing Audit Committee that currently consists of Michael J. Mullen and William Guinness. Our Board has determined that each of the members of the Audit Committee are independent as defined under the independence requirements contemplated by Rule 10A-3 under the Exchange Act. The Board has determined that Mr. Mullen is an “audit committee financial expert” as defined in Item 407(d) (5) of Regulation S-K.

Item 11.

Name and Principal Position	Year		~~Year~~		Salary		~~Salary~~		~~OtherCompensation(1)~~		~~Total~~
Peter G. Savas		2012		~~2011~~	$	401,625	$	~~401,625~~	$	—	$	~~401,625~~
Chairman and CEO (2)				2010			$	401,625	$	3,258	$	404,883
Chairman and CEO		2011			$	401,625
Kenneth L. Rice, Jr., J.D., L.L.M., M.B.A.		2012		~~2011~~	$	267,750	$	~~267,750~~	$	—	$	~~267,750~~
Executive Vice President and CFO		2011		~~2010~~	$	267,750	$	~~267,750~~	$	—	$	~~267,750~~

~~(1)~~Mr. Savas ~~Other~~serves ~~compensation~~as ~~was~~a ~~comprised~~member of ~~disability~~our ~~insurance~~board ~~for~~of ~~Mr.~~directors, ~~Savas~~but receives no additional compensation in ~~2010~~his capacity as director.

(2) Mr. Savas is also a member of our board of directors, but does not receive any additional compensation in his capacity as director.

Outstanding Equity Awards

Outstanding option awards held by our Named Executive Officers as of December 31, ~~2011~~2012:


			Number of securities - underlying unexercised options exercisable		Option - exercise price		Options Expiration Date
Peter G. Savas	(1	)		200,000	$	2.31		3/11/2015
	(1	)		950,000	$	1.15		1/31/2014
Kenneth L. Rice, Jr., J.D., L.L.M., M.B.A.	(1	)		375,000	$	1.15		1/31/2014

(1)	All options are fully vested and exercisable.

Potential Payments upon Termination or Change-in-Control

On March 31, 2006, we entered into employment agreements with Mr. Savas and Mr. Rice effective January 1, 2006 for a term of one year. These agreements are collectively referred to as the Employment Agreements. Each Employment Agreement automatically renews for an additional 12 month period, unless either party notifies the other party in writing not less than 90 days prior to expiration.

In general, in the event of termination without “cause” (as defined in the Employment Agreements) or voluntarily by an executive within one year following a “change in control” (as defined below), the Employment Agreements provide for (i) a cash severance payment equal to the sum of 75% — 100% of the sum of an executive’s highest base salary in effect during the preceding 12 month period and the average annual cash bonus paid during the preceding twenty-four month period, (ii) the continuation of health care benefits for a period of 9 to 12 months following termination of employment, and (iii) full acceleration of the vesting of all of the executive’s unvested equity awards. In the event of termination of employment by us for “disability” (as defined in the Employment Agreements), the Employment Agreements provide for a cash severance payment equal to the sum of 75% — 100% of the sum of an executive’s highest base salary in effect during the preceding 12 month period and the average annual cash bonus paid during the preceding twenty-four month period.

in the Employment Agreements), the Employment Agreements provide for a cash severance payment equal to the sum of 75% — 100% of the sum of an executive’s highest base salary in effect during the preceding 12 month period and the average annual cash bonus paid during the preceding twenty-four month period.

A “change in control” means:

(1)	an acquisition of any of our voting securities by any person immediately after which such person has beneficial ownership of 45% or more of the combined voting power of our then outstanding voting securities; or

(2)	approval by our stockholders of:

(a) our merger, consolidation, share exchange or reorganization, unless our stockholders, immediately before such merger, consolidation, share exchange or reorganization, own, directly or indirectly immediately following such merger, consolidation, share exchange or reorganization, at least 51% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation, share exchange or in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation, share exchange or reorganization; or

(b) our complete liquidation or dissolution; or

If the employment of any Named Executive Officer is terminated, unless employment is terminated without cause or after the occurrence of a change in control, such Named Executive Officer will remain subject to certain conditions regarding non-competition, non-solicitation and confidentiality, for a period of one year following the date of termination of employment.

Compensation of Directors

Our non-employee directors consisted of Michael J. Mullen and William Guinness. Their compensation for the year ended December 31, ~~2011~~2012 ~~included~~was ancomprised ~~annual retainer~~ of ~~$25,000 and~~ a $2,500 fee per meeting attended. Mr. Mullen and Mr. Guinness have not received payment for board fees since 2010. At December 31, 2012 the Company had an accrued liability of $167,400 to Messrs. Mullen and Guinness which was settled in 2013 as described below.

InOn ~~July~~February 15, ~~2011~~2013, Alseres Pharmaceuticals, Inc. (the “Company”), entered into Settlement Agreements with Michael Mullen and William Guinness, ~~signed~~both ~~settlement~~members ~~agreements~~of the Board of Directors of the Company pursuant to ~~resolve~~which ~~unpaid~~the ~~fees~~Company ~~due~~agreed to ~~them~~satisfy ~~for services~~certain ~~rendered~~outstanding ~~during~~obligations ~~the~~to ~~period~~these ofindividuals ~~July~~which, ~~2008~~in ~~through~~aggregate, ~~January 31~~totaled $220,734 ~~2010.~~by Asissuing fully vested options to purchase a total of 167,400 shares of the ~~settlement~~common ~~date,~~stock ~~approximately~~of Alseres ~~$172~~Neurodiagnostics,~~000~~ ~~had~~Inc. ~~been~~(a ~~accrued~~subsidiary ~~for~~of ~~directors~~the ~~fees~~Company) ~~owed~~presently toowned by the ~~two~~Company ~~board~~at ~~members~~a ~~who~~purchase ~~agreed~~price to abe ~~reduced~~established ~~payment~~by ~~totaling~~the ~~$22~~Company coincident with the closing of an equity financing for Alseres Neurodiagnostics,~~400~~ Inc. AsThe options must abe ~~result~~exercised, ofif ~~these~~at ~~transactions~~all, ~~approximately~~in ~~$149~~whole or in part,~~000~~ ~~was~~on ~~recognized~~or asbefore ~~forgiveness~~February 28, of2018. ~~debt~~The ~~and~~common astock ~~corresponding~~of ~~reduction~~Alseres inNeurodiagnostics, ~~accrued~~Inc. ~~expenses~~to ~~was~~be ~~recognized~~issued inpursuant to the ~~Consolidated~~options ~~Balance~~will ~~Sheet~~bear asall appropriate restrictive legends regarding disposition or resale of ~~December 31,~~the ~~2011~~common stock.

As of December 31, 2011, fees earned, but unpaid for 2011 and the remainder of 2010 to the two directors totaled approximately $163,000. As of December 31, 2011, the number of shares underlying options held by Michael J. Mullen and William Guinness was 125,417 and 80,000, respectively.

In July 2011, John Preston, Henry Brem, Gary Frashier and Robert Langer signed settlement agreements to resolve unpaid fees due to them for services rendered during the period of July 2008 through January 2010. As of the settlement date, a total of $358,500 had been accrued for director and consulting fees. Per the agreements, each former board member was issued one share of stock for each dollar owed. The Company stock closed at $.08 per share on the effective date of the agreements. As a result of these transactions a total of 358,500 shares of Company stock were issued. The issuance of these shares and the forgiveness of approximately $328,000 in debt resulted in approximately $356,000 in reduction to accrued expenses.

Item 12.

Security ownership of certain beneficial owners and management and related stockholder matters

Security Ownership

The following table sets forth information, as of December 31, ~~2011~~2012, regarding the beneficial ownership of our common stock by:

•

each person or “group,” as that term is defined in Section 13(d)(3) of the Exchange Act, that beneficially owns more than 5% of our outstanding common stock based on currently available Schedules 13D and 13G filed with the Securities and Exchange Commission;

•

each of our directors;

•

each of the Named Executive Officers; and

•

all directors and executive officers as a group.

Beneficial ownership shown is determined in accordance with the rules of the Securities and Exchange Commission and, as a result, includes voting and investment power with respect to shares.

5% Beneficial Owners of Common Stock	Amount ofBeneficial Ownership		Percent ofClass (2)
Robert L. Gipson (3)c/o Ingalls & Snyder LLC, 61 Broadway, New York, NY 10006		18,544,970		43.0
Thomas L. Gipson (4)c/o Ingalls & Snyder LLC, 61 Broadway, New York, NY 10006		5,318,073		12.3
Ingalls & Snyder Value Partners, LP (5)61 Broadway, New York, NY 10006		6,791,674		15.7
Ingalls & Snyder LLC (6)61 Broadway, New York, NY 10006		2,891,674		6.7
Arthur Koenig (7)c/o Duferco Steel Inc., Matawan Rd., Suite 400, Matawan, NJ 07747		3,285,000		7.6

Directors and Named Executive Officers	Amount of BeneficialOwnership		Percent ofClass (2)
Peter G. Savas (8)Chairman of the Board and Chief Executive Officer		1,161,212		2.7
Kenneth L. Rice, Jr., J.D., L.L.M., M.B.A. (9)Executive Vice President Finance and Administration, Chief Financial Officer and Secretary		379,485		*
Michael J. Mullen, C.P.A. (10)Director		125,617		*
William Guinness (11)Director		80,000		*
All directors and executive officers as a group (4 persons)		1,746,314		4.0

* Represents less than 1% of the outstanding shares.

Unless otherwise indicated above, the address for each listed director and executive officer is c/o Alseres Pharmaceuticals, Inc., 239 South Street, Hopkinton, Massachusetts 01748.

(1)

Except as set forth in the footnotes to this table and subject to applicable community property law, the persons and entities named in the table have sole voting and investment power with respect to all shares.

(2) Applicable percentage ownership for each holder is based on 30,635,720 shares of common stock outstanding on December 31, ~~2011~~2012, plus common stock issuable upon conversion of any outstanding convertible promissory notes, Series F Convertible Preferred Stock, and any common stock equivalents and presently exercisable stock options or warrants held by each such holder.

(3) Information is based on a Schedule 13 D/A filed on December 27, 2011 with the SEC. Consists of ~~(i)~~ 15,676,004 shares of common stock currently issued and outstanding~~, (ii) 2,868,966 shares of common stock into which our promissory notes in the aggregate principal amount of $7,172,415 were convertible as of December 31, 2011~~. As of December 31, ~~2011~~2012, Mr. Gipson held 100% of the issued and outstanding Series F Preferred.

(4) Information is based on a Schedule 13 D/A filed on December 27, 2011 with the SEC. Consists of ~~(i)~~ 4,656,004 shares of common stock currently issued and outstanding ~~and (ii) 662,069 shares of common stock into which our promissory notes in the aggregate principal amount of $1,655,172 were convertible as of December 31, 2011~~.

~~(5)~~Item ~~Information is based on a Schedule~~ 13 ~~G/A filed on February 9, 2011 with the SEC~~. ~~Consists~~Certain ofRelationships ~~(i) 2,791,674 shares of common stock currently issued~~ and ~~outstanding~~Related ~~and (ii) 4,000,000 shares of common stock into which our promissory notes in the aggregate principal amount of $10,000,000 were convertible as of December 31, 2011.~~Transactions

~~(6)~~We ~~Information~~have isentered ~~based~~into onindemnity aagreements ~~Schedule~~with ~~13G/A~~each ~~filed~~of ~~February~~our ~~10,~~directors ~~2011~~and ~~with~~executive ~~the~~officers ~~SEC.~~containing ~~Ingalls~~provisions &that ~~Snyder~~may ~~LLC~~require ~~beneficially~~us, ~~owns~~among 2other things,~~891,674~~ ~~shares~~to ofindemnify ~~common~~those ~~stock~~directors and ~~has~~officers ~~shared~~against liabilities ~~power~~that tomay ~~dispose~~arise orby ~~direct~~reason ~~the~~of ~~disposition~~their ofstatus ~~2,891,674~~or ~~shares~~service as directors and officers. ~~Securities~~The ~~reported~~agreements ~~under~~also ~~shared~~provide ~~dispositive~~for ~~power~~us ~~include~~to ~~securities~~advance ~~owned~~to bythe ~~clients~~directors ofand ~~Ingalls~~officers &expenses ~~Snyder~~that ~~LLC,~~they expect to incur as a ~~registered~~result ~~broker~~of ~~dealer~~any proceeding against them related to their service as directors and aofficers. ~~registered~~For ~~investment~~information ~~advisor,~~regarding inrelated ~~accounts~~party ~~managed~~transactions ~~under~~see ~~investment~~Note ~~advisory~~14 ~~contracts~~of these Consolidated Financial Statements. ~~Such~~For ~~clients~~information ~~include~~relating ~~Ingalls~~to &our ~~Snyder~~employment ~~Value~~and ~~Partners~~severance arrangements with our Named Executive Officers, LPsee “Executive Compensation — Potential Payments upon Termination or Change-in-Control.”

(7) Information is based on a Schedule 13G/A filed February 9, 2011 with the SEC. Consists of 2,085,000 shares of our common stock currently issued and outstanding and (ii) 1,200,000 shares of common stock into which our promissory notes in the aggregate principal amount of $3,000,000 were convertible as of December 31, 2011.

(8) Includes 11,212 shares of common stock owned outright and 1,150,000 shares of common stock issuable upon exercise of options.

(9) Includes 4,485 shares of common stock owned outright and 375,000 shares of common stock issuable upon exercise of options.

(10) Consists of 125,417 shares of common stock issuable upon exercise of options and 200 shares of common stock held by a revocable trust of which Mr. Mullen is the trustee.

(11) Consists of 80,000 shares of common stock issuable upon exercise of options.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

We have entered into indemnity agreements with each of our directors and executive officers containing provisions that may require us, among other things, to indemnify those directors and officers against liabilities that may arise by reason of their status or service as directors and officers. The agreements also provide for us to advance to the directors and officers expenses that they expect to incur as a result of any proceeding against them related to their service as directors and officers.

For information regarding related party transactions see Note 13 of these Consolidated Financial Statements. For information relating to our employment and severance arrangements with our Named Executive Officers, see “Executive Compensation — Potential Payments upon Termination or Change-in-Control.”

Item 14.

Principal Accountant Fees and Services

Independent Registered Public Accounting Firm’s Fees and Other Matters

The following table summarizes the fees billed to us for professional services rendered by McGladrey ~~& Pullen,~~ LLP, our independent registered public accounting firm, ~~RSM~~and ~~McGladrey, Inc.,~~ our tax advisors and preparers, ~~and PricewaterhouseCoopers LLP, our prior independent registered public accounting firm,~~ for ~~each of~~ the last two years:

Fee Category	~~2011~~2012		~~2010~~2011
Audit Fees	$	82,000	$	8982,~~060~~000
Audit-Related Fees		—		7,800
Tax Fees		25,000		25,000
Tax Fees		25,000		30,000
Total Fees	$	107,000	$	107,000
Total Fees	$	107,000	$	126,860

Audit Fees

Audit fees consist of fees for the audit of our consolidated annual financial statements, the review of the interim consolidated financial statements included in our quarterly reports on Form 10-Q and other professional services provided in connection with statutory and regulatory filings or engagements paid to McGladrey, LLP.

~~Audit-Related~~18 ~~Fees~~

Tax Fees

Tax fees consist of fees related to tax return preparation and tax compliance.

Policy on Audit Committee Pre-approval of Audit and Permissible Non-audit Services of Independent Registered Public Accounting Firm

Consistent with policies of the SEC regarding independent registered public accounting firm independence and our Audit Committee Charter, our Audit Committee has the responsibility for appointing, retaining, setting compensation and overseeing the work of the independent registered public accounting firm. Our Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. Our Audit Committee presently pre-approves particular services on a case-by-case basis. In assessing requests for services by the independent registered public accounting firm, our Audit Committee considers whether such services are consistent with the independent registered public accounting firm’s independence, whether the independent registered public accounting firm is likely to provide the most effective and efficient service based upon their familiarity with us, and whether the service could enhance our ability to manage or control risk or improve audit quality.

All of the audit-related, tax and other services provided by McGladrey ~~& Pullen,~~ LLP in ~~2011~~2012 were approved in advance by our Audit Committee. None of the services or fees was approved using the “de-minimis” exception under SEC rules.

Our Audit Committee believes that the provision of the non-audit services above is compatible with maintaining the independent registered public accounting firm’s independence.

1719

PART IV

Item 15.

Exhibits and Financial Statement Schedules

The following documents are included as part of this Annual Report on Form 10-K.

1. Financial Statements:

Consolidated Financial Statements of the Company:
Consolidated Balance Sheets at December 31, 2011 and 2010			20
Consolidated Balance Sheets at December 31, 2012 and 2011			22
Consolidated Statements of Operations for the fiscal years ended December 31, 2011 and 2010 and for the period from inception (October 16, 1992) through December 31, 2011			21
Consolidated Statements of Comprehensive Loss for the fiscal years ended December 31, 2012 and 2011 and for the period from inception (October 16, 1992) through December 31, 2012			23
Consolidated Statements of Convertible Redeemable Preferred Stock, Comprehensive Gain (Loss) and Stockholders’ (Deficit) Equity for the fiscal years ended December 31, 2011 and 2010 and for the period from inception (October 16, 1992) through December 31, 2011			22
Consolidated Statements of Stockholders’ (Deficit) Equity for the fiscal years ended December 31, 2012 and 2011 and for the period from inception (October 16, 1992) through December 31, 2012			24
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2011 and 2010 and for the period from inception (October 16, 1992) through December 31, 2011			26
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2012 and 2011 and for the period from inception (October 16, 1992) through December 31, 2012			28
Notes to Consolidated Financial Statements			2830

2. Financial Statement Schedules:

Schedules are omitted since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements or Notes thereto.

3. Exhibits:

The Exhibits listed in the Exhibit Index immediately preceding the Exhibits are filed as a part of this Annual Report on Form 10-K.

1820

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Alseres Pharmaceuticals, Inc.

We have audited the accompanying consolidated balance sheets of Alseres Pharmaceuticals, Inc. and Subsidiaries (the “Company”) as of December 31, ~~2011~~2012 and ~~2010~~2011, and the related consolidated statements of ~~operations,~~ comprehensive loss, ~~and~~ stockholders’ (deficit) equity, and cash flows for the years then ended and for the period from October 16, 1992 (Inception) to December 31, ~~2011~~2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements for the period from October 16, 1992 (Inception) to December 31, 2006 were audited by other auditors and our opinion, insofar as it relates to cumulative amounts include for such prior periods, is based solely on the reports of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our ~~audit~~audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, ~~based on our audits and~~ the ~~reports~~ ~~of other auditors, the~~ consolidated financial statements referred to above present fairly, in all material respects, the financial position of Alseres Pharmaceuticals, Inc. and Subsidiaries as of December 31, ~~2011~~2012 and ~~2010~~2011, and the results of its operations and its cash flows for the years then ended and for the period from October 16, 1992 (Inception) to December 31, ~~2011~~2012, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations, its total liabilities exceed its total assets, and it has determined that it will need to raise additional capital. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ McGladrey ~~& Pullen,~~ LLP

Boston, Massachusetts

~~March~~April 291, ~~2012~~2013

1921

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

CONSOLIDATED BALANCE SHEETS

	December 31, 2011			December 31, 2010
	December 31,2012			December 31,2011
ASSETS
Current assets:
Cash and cash equivalents	$	~~135~~16,~~843~~528		$	98135,~~514~~843
Short-term investments		27838,~~446~~309			—27,446
Security deposits		—			96,163
Restricted marketable securities		42,450			—
Prepaid expenses and other current assets		42,~~965~~720			144,~~073~~965
Total current assets		~~168~~900,~~254~~007			~~208~~168,~~750~~254
Property and equipment, net		21,~~475~~186			472,~~674~~475
Indemnity fund		—			115,568
Deferred charges		64,514			—
Security deposits		—			88,600
Total assets	$	965,707		$	170,729
Total assets	$	170,729		$	460,592
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	2,~~210~~278,~~229~~398		$	32,~~576~~210,~~809~~229
Convertible notes payable		~~21,827,588~~—			2921,~~000~~827,~~000~~588
Notes payable		56,~~900~~410,000			45,~~660~~900,000
Accrued interest payable on convertible notes		—			4,714,722
Accrued interest on notes payable		919,526			486,691
Accrued interest payable on notes payable		486,691			270,759
Other current liabilities		60,126			—
Accrued lease		—			65,922
Advances from related party		325,000
Total current liabilities		30,424,508			42,288,212
Deferred revenue		73,730			—
Accrued lease, excluding current portion		—			30,503
Total current liabilities		10,066,780			30,424,508
Total liabilities		30,424,508			42,318,715
Contingent royalty		16,000,000			—
Commitments and contingencies (Note 12)
Deferred revenue, net of current portion		1,216,547			—
Series F convertible redeemable preferred stock, $.01 par value; 200,000 shares designated; 12,000 and 196,000 shares issued and outstanding at December 31, 2011 and 2010, respectively (liquidation preference of $300,000 at December 31, 2011)		348,444			5,428,158
Other long-term liabilities		33,750			—
Total liabilities		27,317,077			30,424,508
Commitments and contingencies (see note 13)
Series F convertible redeemable preferred stock, $.01 par value; 200,000 shares designated; 12,000 shares issued and outstanding at December 31, 2012 and 2011 (liquidation preference of $300,000 at December 31, 2012)		369,501			348,444
Stockholders’ deficit:
Preferred stock, $.01 par value; 1,000,000 shares authorized; 25,000 shares designated Convertible Series A, 500,000 shares designated Convertible Series D, and 800 shares designated Convertible Series E; no shares issued and outstanding at December 31, 2011 and 2010		—			—
Preferred stock, $.01 par value; 1,000,000 shares authorized; 25,000 shares designated Convertible Series A, 500,000 shares designated Convertible Series D and 800 shares designated Convertible Series E; no shares issued and outstanding at December 31, 2012 and 2011		—			—
Common stock, $.01 par value; 80,000,000 shares authorized at December 31, 2011 and 2010, 30,635,720 and 26,785,645 shares issued and outstanding at December 31, 2011 and 2010, respectively		306,357			267,856
Common stock, $.01 par value; 80,000,000 shares authorized at December 31, 2012 and 2011; 30,635,720 issued and outstanding at December 31, 2012 and 2011		306,357			306,357
Additional paid-in capital		~~166~~171,~~170~~975,~~855~~520			~~146~~166,~~611~~170,~~717~~855
Accumulated other comprehensive loss		(31309,~~367~~204	)		—(31,367	)
Deficit accumulated during development stage		(~~197~~198,~~048~~693,~~068~~544	)		(~~194~~197,~~165~~048,~~854~~068	)
Total stockholders’ deficit		(3026,~~602~~720,~~223~~871	)		(4730,~~286~~602,~~281~~223	)
Total liabilities and stockholders’ deficit	$	~~170~~965,~~729~~707		$	~~460~~170,~~592~~729

The accompanying notes are an integral part of the consolidated financial statements.

2022

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE LOSS

	For the Year Ended						From Inception(October 16, 1992 to
	For the Year EndedDecember 31,						Period fromOctober 16, 1992(inception) toDecember 31,2012
	December 31, 2011			December 31, 2010			December 31, 2011)
	2012			2011
Revenues	$	—530,720		$	—		$	~~900~~1,~~000~~430,720
Operating expenses:
Research and development		93,319			465,449			116,041,598
General and administrative		1,665,605			2,032,946			70,413,744
General and administrative		2,032,946			2,657,488			68,814,888
Research and development		50,750			93,319			116,092,348
Sublicense and option fees		26,536			—			26,536
Purchased in-process research and development		—			—			12,146,544
Operating expenses before accrual reversal		21,~~126~~742,~~265~~891			32,~~122~~126,~~937~~265			~~197~~198,~~003~~745,~~030~~921
Accrual reversal		~~(561,195~~—	)		—(561,195	)		(561,195	)
Total operating expenses		1,~~565~~742,~~070~~891			31,~~122~~565,~~937~~070			~~196~~198,~~441~~184,~~835~~726
Loss from operations		(1,~~565~~212,~~070~~171	)		(31,~~122~~565,~~937~~070	)		(~~195~~196,~~541~~754,~~835~~006	)
Gain on early extinguishment of debt		—			6,277,100			6,277,100
Interest expense		(434,551	)		(1,838,484	)		(14,923,661	)
Other income (expense), net		43,814			—			(1,474,064	)
Investment income		341			689			7,705,345
Forgiveness of debt		476,837			—			476,837
Other income (expense), net		905			43,814			(1,473,159	)
Interest expense, net		(1,838,484	)		(2,643,630	)		(14,489,110	)
Gain on early extinguishment of debt		—			—			6,277,100
Investment income		689			1,886			7,705,004
Forgiveness of debt		—			476,837			476,837
Net income (loss)		(2,882,214	)		512,419			(197,046,068	)
Net loss		(1,645,476	)		(2,882,214	)		(198,691,544	)
Preferred stock beneficial conversion feature		—			—			(8,062,712	)
Accrual of preferred stock dividends and modification of warrants held by preferred stock stockholders		—			—			(1,229,589	)
Net income (loss) applicable to common stockholders	$	(2,882,214	)	$	512,419		$	(206,338,369	)
Net loss attributable to common stockholders		(1,645,476	)		(2,882,214	)		(207,983,845	)
Net income (loss) attributable to common stockholders, basic and diluted	$	(2,882,214	)	$	143,137
Other comprehensive income
Net income (loss) per share, basic	$	(0.10	)	$	0.01
Net change in unrealized loss on marketable securities		(277,837	)		(31,367	)		309,204
Net income (loss) per share, diluted	$	(0.10	)	$	0.00
Comprehensive loss	$	(1,923,313	)	$	(2,913,581	)	$	208,293,049
Weighted average common shares, basic		29,626,072			26,686,933
Basic and diluted net loss attributable to common stockholders per share	$	(0.06	)	$	(0.10	)
Weighted average common shares, diluted		29,626,072			31,586,933
Weighted average common shares outstanding		30,635,720			29,626,072

The accompanying notes are an integral part of the consolidated financial statements.

2123

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

Consolidated Statements of ~~Convertible Redeemable Preferred Stock, Comprehensive Gain (Loss) and~~ Stockholders’ (Deficit) Equity

For the Period from inception (October 16, 1992) to December 31, ~~2011~~2012

	Preferred Stock						Common Stock				AdditionalPaid-InCapital			DeferredCompensation	~~AccumulatedOther~~AccumulatedOtherComprehensive Income (Loss)	~~DeficitAccumulatedDuring~~DeficitAccumulatedDuringDevelopment Stage	TotalStockholders’(Deficit)Equity ~~and~~andPreferredStock
	Number ofshares			Amount			Number ofshares		~~Par Value~~ParValue		~~Additional Paid-In Capital~~			~~DeferredCompensation~~	~~ComprehensiveIncome (Loss)~~	~~DevelopmentStage~~	~~PreferredStock~~
Issuance of common stock to founders								304,009	$	3,040	$	45,685					$	48,725
Exercise of warrants and stock options								1,185,039		11,850		7,584,589						7,596,439
Issuance of common stock and warrants, net of issuance costs of $1,928,421								11,516,790		115,168		56,343,378						56,458,546
Issuance of common stock and warrants, net of issuance costs								11,516,790		115,168		56,343,378						56,458,546
Issuance of common stock and warrants upon Merger								723,947		7,239		14,596,709						14,603,948
Conversion of convertible debentures								31,321		313		988,278						988,591
Issuance of warrants in connection with debentures, net of issuance costs of $392,958												3,632,632						3,632,632
Issuance of warrants related to debentures, net of issuance costs												3,632,632						3,632,632
Issuance of warrants in connection with preferred series C stock issuance and related beneficial conversion feature, net of issuance costs of $590,890												3,736,789						3,736,789
Issuance of warrants related to preferred series C stock and BCF, net of issuance costs												3,736,789						3,736,789
Accretion of preferred series C stock												(4,327,679	)					(4,327,679	)
Accretion preferred series C stock												(4,327,679	)					(4,327,679	)
Preferred stock, net of issuance costs of $4,078,821		240,711		$	2,296,355							23,288,101						25,584,456
Preferred stock, net of issuance costs		240,711		$	2,296,355							23,288,101						25,584,456
Conversion of Preferred Stock K and payment of interest, net of issuance costs of $27,664		(240,149.7	)		(1,491,474	)		1,553,749		15,538		7,655,122						6,179,186
Conversion of Preferred Stock K and payment of interest, net of issuance costs		(240,149.7	)		(1,491,474	)		1,553,749		15,538		7,655,122						6,179,186

2224

ALSERES PHARMACEUTICALS, INC.

(Continued)

Consolidated Statements of ~~Convertible Redeemable Preferred Stock, Comprehensive Gain (Loss) and~~ Stockholders’ (Deficit) Equity

For the Period from inception (October 16, 1992) to December 31, ~~2011~~2012

	Preferred Stock						Common Stock				AdditionalPaid-In Capital			DeferredCompensation			~~AccumulatedOther~~AccumulatedOtherComprehensiveIncome (Loss)	DeficitAccumulatedDuring DevelopmentStage			TotalStockholders’(Deficit) Equity ~~and~~andPreferredStock
	Number ofshares			Amount			Number ofshares		Par Value		~~Additional Paid-In Capital~~			~~DeferredCompensation~~			~~ComprehensiveIncome (Loss)~~	~~DevelopmentStage~~			~~PreferredStock~~
Conversion of debentures and payment of interest, net of issuance costs of $307,265								317,083		3,171		4,844,249										4,847,420
Conversion of debentures and payment of interest, net of issuance costs								317,083		3,171		4,844,249										4,847,420
Conversion of preferred stock and modification of warrants		(561.3	)		(3,501,539	)		900,646		9,006		3,492,533										—
Preferred stock conversion inducement												(600,564	)									(600,564	)
Amortization of preferred stock Series E beneficial conversion feature					2,696,658							(2,696,658	)									—
Amortization of preferred stock Series E BCF					2,696,658							(2,696,658	)									—
Issuance of warrants in connection with Series E Stock, net of issuance costs of $278,426												2,049,297										2,049,297
Issuance of warrants related to Series E Stock, net of issuance costs												2,049,297										2,049,297
Issuance of common stock in connection with cancellation of warrants								42,667		427		(427	)									—
Issuance of common stock and cancellation of warrants								42,667		427		(427	)									—
Accrual of dividends on preferred Series E stock												(573,597	)									(573,597	)
Dividend accrual preferred Series E												(573,597	)									(573,597	)
BCF on 10% convertible secured promissory notes												558,000										558,000
BCF on convertible secured promissory notes												558,000										558,000
Deferred compensation related to stock options and warrants granted												804,607			(804,607	)						—
Deferred compensation- stock options and warrants												804,607			(804,607	)						—
Share-based compensation												3,470,199			804,607							4,274,806
Modification of options and warrants												1,804,694										1,804,694
Other								783		8		69,925										69,933
Comprehensive loss:
Net loss (Inception October 16, 1992 to December 31, 2006)																		$	(143,503,529	)	$	(143,503,529	)
Net loss from inception (October 16, 1992 to December 31, 2006)																		$	(143,503,529	)	$	(143,503,529	)

2325

Consolidated Statements of ~~Convertible Redeemable Preferred Stock, Comprehensive Gain (Loss) and~~ Stockholders’ (Deficit) Equity

(Continued)

For the Period from inception (October 16, 1992) to December 31, ~~2011~~2012

	Preferred Stock				Common Stock				Additional Paid-In Capital			DeferredCompensation		~~AccumulatedOther~~AccumulatedOtherComprehensive Income (Loss)			DeficitAccumulatedDuring DevelopmentStage			TotalStockholders’(Deficit) Equity ~~and~~andPreferredStock
	Number ofshares		Amount		Number ofshares		~~Par Value~~ParValue		~~Additional Paid-In Capital~~			~~DeferredCompensation~~		~~ComprehensiveIncome (Loss)~~			~~DevelopmentStage~~			~~PreferredStock~~
Exercise of warrants and options						202,183		2,022		143,683											145,705
Conversion of notes payable						4,000,000		40,000		9,960,000											10,000,000
BCF on convertible notes payable										1,880,000											1,880,000
Share-based compensation										1,665,155											1,665,155
Modification of stock options										5,614											5,614
Unrealized gain on marketable securities															9,310						9,310
Net loss																		(19,548,348	)		(19,548,348	)
Comprehensive loss																					(19,539,038	)
Balance at December 31, 2007		—	$	—		20,778,217	$	207,782	$	140,420,314		$	—	$	9,310		$	(163,051,877	)	$	(22,414,471	)
Exercise of stock options						1,100		11		2,530											2,541
Conversion of notes payable						48,000		480		119,520											120,000
BCF on convertible notes payable										380,000											380,000
Share-based compensation										1,670,063											1,670,063
Issuance of common stock						571,806		5,718		1,079,557											1,085,275
Comprehensive loss:
Unrealized loss on marketable securities															(9,310	)					(9,310	)
Net loss																		(20,847,459	)		(20,847,459	)
Comprehensive loss																					(20,856,769	)
Balance at December 31, 2008		—	$	—		21,399,123	$	213,991	$	143,671,984		$	—	$	—		$	(183,899,336	)	$	(40,013,361	)
Share-based compensation										1,473,083											1,473,083
Issuance of common stock						4,156,522		41,565		1,960,435											2,002,000
Issuance of preferred stock		196,000	$	5,066,919						(192,107	)							(2,000	)		4,872,812
Accretion of convertible redeemable preferred stock										(192,107	)							(2,000	)		(194,107	)
Net Loss																		(10,776,937	)		(10,776,937	)
Comprehensive loss																					(10,776,937	)
Balance at December 31, 2009		—	$	—		25,555,645	$	255,556	$	146,913,395		$	—	$	—		$	(194,678,273	)	$	(47,509,322	)
Balance at December 31, 2009		196,000	$	5,066,919		25,555,645	$	255,556	$	146,913,395		$	—	$	—		$	(194,678,273	)	$	(42,442,403	)

2426

Consolidated Statements of ~~Convertible Redeemable Preferred Stock, Comprehensive Gain (Loss) and~~ Stockholders’ (Deficit) Equity

(Continued)

For the Period from inception (October 16, 1992) to December 31, ~~2011~~2012

	Preferred Stock						Common Stock						AdditionalPaid- In Capital			DeferredCompensation		AccumulatedOther ComprehensiveIncome (Loss)			~~DeficitAccumulatedDuring~~DeficitAccumulated DuringDevelopmentStage			TotalStockholders’ (Deficit) Equity ~~and~~andPreferredStock
	Number ofshares			Amount			Number ofshares			Par Value			~~Additional Paid-In Capital~~			~~DeferredCompensation~~		~~ComprehensiveIncome (Loss)~~			~~DevelopmentStage~~			~~PreferredStock~~
Share-based compensation														61,722											61,722
Issuance of common stock								1,500,000			15,000			(15,000	)										—0
Buyback of common stock								(270,000	)		(2,700	)		(5,400	)										(8,100	)
Amortization of legal expenses					18,239																				18,239
Accretion of preferred stock														(343,000	)										(343,000	)
Accretion of preferred stock					343,000									(343,000	)										—
Net income (loss)																						512,419			512,419
Comprehensive income (loss)																									512,419
Balance at December 31, 2010		—		$	—			26,785,645		$	267,856		$	146,611,717		$	—	$	—		$	(194,165,854	)	$	(47,286,281	)
Balance at December 31, 2010		196,000		$	5,428,158			26,785,645		$	267,856		$	146,611,717		$	—	$	—		$	(194,165,854	)	$	(41,858,123	)*
Share-based compensation														834											834
Issuance of common stock-debt forgiveness								358,500			3,585			25,095											28,680
Conversion of notes payable to common stock								2,868,965			28,690			7,143,722											7,172,412
Buyback of common stock at $.0025 per share								(2,868,965	)		(28,690	)		21,518											(7,172	)
Buyback of common stock								(1,108,425	)		(11,084	)													(11,084	)
Forgiveness of accrued interest on convertible debt														6,132,499											6,132,499
Conversion of Series F Preferred to common stock		~~(184,000~~	)		~~(4,600,000~~	)		4,600,000			46,000			4,554,000											—
Forgiveness of accrued interest on note payable-Neurobiologics														195,807											195,807
Forgiveness of accrued interest on note payable														195,807											195,807
Settlement of Neurobiologics note payable														999,000											999,000
Settlement of note payable														999,000											999,000
Amortization of legal expenses					6,949																				6,949
Accretion of preferred stock														486,663											486,663
Accretion of preferred stock					(486,663	)								486,663											—
Net income (loss)																						(2,882,214	)		(2,882,214	)
Unrealized loss on marketable securities																			(31,367	)					(31,367	)
Comprehensive loss																									(2,913,581	)
Balance at December 31, 2011		—		$	—			30,635,720		$	306,357		$	166,170,855		$	—	$	(31,367	)	$	(197,048,068	)	$	(30,602,223	)
Balance at December 31, 2011		12,000		$	348,444			30,635,720		$	306,357		$	166,170,855		$	—	$	(31,367	)	$	(197,048,068	)	$	(30,253,779	)*
Conversion of notes payable to common stock								2,331,035			23,311			5,804,277											5,827,588
* Reconciliation to consolidated balance sheet:
Buyback of common stock at $.0008 per share								(2,331,035	)		(23,311	)		21,445											(1,866	)
	2011			2010
Accretion of preferred stock														(21,057	)										(21,057	)
Total	$	(30,253,779	)	$	(41,858,123	)
Net income (loss)																						(1,645,476	)		(1,645,476	)
Preferred stock		(348,444	)		(5,428,158	)
Unrealized loss on marketable securities																			(277,837	)					(277,837	)
	$	(30,602,223	)	$	(47,286,281	)
Balance at December 31, 2012		—		$	—			30,635,720		$	306,357		$	171,975,520		$	—	$	(309,204	)	$	(198,693,544	)	$	(26,720,871	)

2527

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended						~~From Inception~~
	December 31,2011			December 31,2010			(October 16, 1992 toDecember 31, 2011)
	December 31,2012			December 31,2011			From Inception(October 16, 1992) toDecember 31, 2012
Cash flows from operating activities:
Net income (loss)	$	(2,882,214	)	$	512,419		$	(197,046,068	)
Net loss	$	(1,645,476	)	$	(2,882,214	)	$	(198,6,91,544	)
Adjustments to reconcile net loss to net cash used for operating activities:
Purchased in-process research and development		—			—			12,146,544
Write-off of acquired technology		—			—			3,500,000
Loss on disposition of assets		~~3,391~~—			—3,391			3,391
Interest expense settled through issuance of notes payable		—			—			350,500
Expenses satisfied with the issuance of stock		~~28,680~~—			—28,680			28,680
Forgiveness of debt		~~(476,837~~—	)		—(476,837	)		(476,837	)
Gain on early extinguishment of debt		—			~~(6,277,100~~—	)		(6,277,100	)
Non-cash gain on restricted stock valuation		~~(58,814~~—	)		—(58,814	)		(58,814	)
Non-cash interest expense		—			~~741,471~~—			3,966,394
Non-cash charges for options, warrants and common stock		834			61,722			11,115,437
Non-cash charges related to options, warrants and common stock		—			834			11,115,437
Amortization of financing costs		~~6,949~~—			186,~~239~~949			25,188
Amortization and depreciation		401,~~751~~289			5840,~~598~~751			2,~~890~~891,~~666~~955
Changes in current assets and liabilities:
Changes in operating assets and liabilities:
Decrease in prepaid expenses and other current assets		92,~~108~~245			39,~~055~~108			~~700~~502,~~498~~608
(Decrease) increase in accounts payable and accrued expenses		(889,742	)		116,966			1,914,402
Increase in deferred charges		(64,514	)		—			(64,514	)
Increase in accrued interest payable		1,829,516			1,865,457			7,814,797
(Decrease) increase in accounts payable and accrued expenses		68,169			(889,742	)		1,982,571
Decrease in accrued lease		(96,425	)		(51,494	)		—
Increase in accrued interest payable		432,835			1,829,516			8,247,632
Net cash used for operating activities		(2,484,803	)		(2,950,667	)		(159,402,322	)
Increase in deferred revenue		201,577			—			201,577
Increase in current liabilities		17,676			—			17,676
Increase in other long-term liabilities		33,750			—			33,750
Decrease in accrued lease		—			(96,425	)		—
Net cash used for operating activities		(952,449	)		(2,484,803	)		(160,554,906	)
Cash flows from investing activities:
Cash acquired through merger		—			—			1,758,037
Cash acquired through Merger		—			—			1,758,037
Purchases of property and equipment		~~(2,373~~—	)		—(2,373	)		(1,654,487	)
Proceeds from the sale of property and equipment		~~3,430~~—			—3,430			3,430
Decrease (increase) in security deposits and other assets		184,763			34,865			(200,135	)
Decrease in security deposits and other assets		—			184,763			—
Decrease in indemnity fund		~~115,568~~—			~~152~~115,568			—
Purchases of marketable securities		—			—			(132,004,923	)
Sales and maturities of marketable securities		—			—			132,004,923
Net cash provided by (used for) investing activities		301,388			35,017			(93,155	)
Net cash provided by investing activities		—			301,388			106,980
Cash flows from financing activities:
Proceeds from issuance of common stock		—			—			66,731,339
Funds used to buyback common stock		(18,256	)		(8,100	)		(26,356	)
Proceeds from issuance of preferred stock		—			—			39,922,170
Preferred stock conversion inducement		—			—			(600,564	)
Proceeds from issuance of promissory notes		2,240,000			3,310,000			58,485,000
Proceeds from issuance of convertible debentures		—			—			9,000,000
Principal payments of notes payable/repurchase of debt		(1,000	)		(602,700	)		(7,750,667	)
Dividend payments Series E Cumulative Convertible Preferred Stock		—			—			(516,747	)
Payments related to financing costs		—			—			(5,612,855	)
Net cash provided by financing activities		2,220,744			2,699,200			159,631,320

2628

ALSERES PHARMACEUTICALS, INC.

(continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended						~~From Inception~~
	December 31,2011			December 31,2010			(October 16, 1992 toDecember 31, 2011)
	December 31,2012			December 31,2011			From Inception(October 16, 1992) toDecember 31, 2012
Net increase (decrease) in cash and cash equivalents		37,329			(216,450	)		135,843
Cash flows from financing activities:
Cash and cash equivalents, beginning of period		98,514			314,964			—
Proceeds from issuance of common stock		—			—			66,731,339
Cash and cash equivalents, end of period	$	135,843		$	98,514		$	135,843
Buyback of common stock		(1,866	)		(18,256	)		(28,222	)
Advances from related party		325,000			—			325,000
Proceeds from issuance of preferred stock		—			—			39,922,170
Preferred stock conversion inducement		—			—			(600,564	)
Proceeds from issuance of promissory notes		510,000			2,240,000			58,995,000
Proceeds from issuance of convertible debentures		—			—			9,000,000
Principal payments of notes payable/repurchase of debt		—			(1,000	)		(7,750,667	)
Dividend payments on Series E Cumulative Convertible Preferred Stock		—			—			(516,747	)
Payments of financing costs		—			—			(5,612,855	)
Net cash provided by financing activities		833134			2,220,744			160,464,454
Net (decrease) increase in cash and cash equivalents		(119,315	)		(37,329	)		16,528
Cash and cash equivalents, beginning of period		135,843			98,514			—
Cash and cash equivalents, end of period	$	16,528		$	135,843		$	16,528
Supplemental cash flow disclosures:
Cash paid for interest	$	—		$	—		$	628,406
Supplemental disclosure of non-cash financing activity:
Supplemental disclosure of non-cash investing and financing activity:
Conversion of notes payable to common stock	$	75,~~172~~827,~~412~~588		$	—7,172,412		$	713,~~172~~000,~~412~~000
Capital contribution related to forgiveness of accrued interest	$	~~6,328,306~~—		$	—6,328,306		$	6,328,306
Accrued interest reclassified in connection with conversion of Series F convertible redeemable preferred stock to common stock	$	~~640,874~~—		$	—640,874		$	640,874
Supplemental disclosure of other non-cash transactions:
Receipt of marketable securities as payment for license agreement	$	1,146,000		$	—		$	1,146,000
Conversion of notes payable to future royalties	$	16,000,000		$	—		$	16,000,000

The accompanying notes are an integral part of the consolidated financial statements.

2729

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company and Summary of Significant Accounting Policies

Alseres Pharmaceuticals, Inc. and its subsidiaries (the “Company”) is a biotechnology company engaged in the development of ~~therapeutic and~~ diagnostic products primarily for disorders in the central nervous system. The Company was founded in 1992 and merged with a publicly held company in 1995 (the “Merger”) whereby the Company changed its name to Boston Life Sciences, Inc. Effective June 7, 2007, the Company changed its name to Alseres Pharmaceuticals, Inc. During the period from inception through December 31, ~~2011~~2012, the Company has devoted substantially all of its efforts to business planning, ~~raising~~ raising financing, furthering the research and development of its technologies, and corporate partnering efforts. Accordingly, the Company is considered to be a “development stage enterprise” as defined in ASC 915, Development Stage Entities and will continue to be so until the commencement of commercial operations. The development stage is from October 16, 1992 (inception) through December 31, ~~2011~~2012.

The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The uncertainty inherent in the need to raise additional capital and the Company’s recurring losses from operations raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company is taking a number of steps to address the issues regarding our ability to continue as a going concern until such time as routine royalty income from the Navidea transaction is realized by the Company. We are continuing to tightly control our monthly expenses through further staff reductions and elimination of discretionary spending. We are engaged in fundraising efforts that could include one or more of the following: a debt financing or equity offering, or a collaboration, merger, acquisition or other transaction with one or more pharmaceutical or biotechnology companies. There can be no assurances that any of these efforts will be successful and we may still be forced to curtail operations in such event.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of its ~~six~~seven subsidiaries where all of the Company’s operations are conducted. During 2012 the Company organized its seventh subsidiary, Alseres Neurodiagnostics, Inc. as a Delaware corporation. As of December 31, ~~2011~~2012 all of the subsidiaries were wholly-owned. All significant intercompany transactions and balances have been eliminated.

Reclassifications

Certain reclassifications have been made to the prior year’s consolidated balance sheet and accompanying notes to conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.

Cash and Cash Equivalents

~~The~~Cash ~~Company considers~~equivalents ~~all~~are short-term, highly liquid ~~marketable~~financial ~~securities~~instruments ~~purchased~~that ~~with~~are anreadily ~~original~~convertible ~~maturity~~to cash and have maturities of ~~three~~90 ~~months~~days or less tofrom bethe ~~cash~~date ~~equivalents~~of purchase. As of December 31, ~~2011~~2012 and 2011, ~~2010~~ cash equivalents consisted of ~~money~~overnight ~~market~~sweep ~~funds~~account balances.

Short-term Investments

The Company ~~considers~~ ~~all~~has ~~marketable~~designated securities with maturities greater than three months and less than one year at the time of acquisition or purchase to be short-term investments. The Company determines the appropriate classification of its marketable securities ~~at the time of acquisition or purchase and evaluates such designation~~ as of each balance sheet date. ~~As of December 31, 2011, our short-term investments are classified~~ as available-for-sale securities and ~~are~~accounts ~~carried~~for onthem ~~the~~at ~~balance~~their ~~sheet~~respective at fair ~~value~~values. ~~The~~Marketable ~~unrealized losses related to these marketable~~ securities ~~have~~are classified ~~been~~as ~~determined~~short-term ~~to be temporary and therefore have been included in other comprehensive loss a component of stockholders’ deficit.~~

~~Fair~~30 ~~Value Measurements~~

The carrying amounts of the Company’s cash and cash equivalents, other current assets, accounts payable and accrued expenses approximate their fair values as of December 31, 2011 and 2010 due to their short-term nature. Short-term investments are considered available-for-sale as of December 31, 2011 and are carried at fair value. It is not practicable to estimate the fair value of the Company’s convertible debt. However, it is likely that the fair value of the debt would be materially less than the carrying value of the debt because the conversion price of $2.50 is higher than the Company’s stock price of $0.24 as of December 31, 2011 and the Company currently does not have the resources to repay the convertible debt.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

or long-term investments based on the nature of these securities and the availability of these securities to meet current operating requirements. Marketable securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as a component of current assets in the accompanying consolidated balance sheets. The Company reviews all available-for-sale securities at each period end to determine if they remain available-for-sale based on the Company’s then current intent and ability to sell the security if it is required to do so. As of December 31, 2012, the Company’s short-term investments included 285,000 shares of common stock in Navidea Biopharmaceutical, Inc. (“NAVB”) and 39,209 shares of FluoroPharma Medical, Inc. common stock (“FPMI”). The unrealized loss associated with these marketable securities has been determined to be temporary and therefore has been included in other comprehensive loss as a component of stockholders’ deficit.

Fair Value of Financial Instruments

The carrying amounts of the Company’s cash and cash equivalents, prepaid expenses, trade payables, accrued expenses and notes payable approximate their fair value due to the short-term nature of these instruments. Short-term investments consist of available-for-sale-securities as of December 31, 2012 and 2011 and are carried at fair value as disclosed in Note 10.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. ~~Leasehold improvements were recorded at cost and amortized using the straight-line method over the term of the lease which expired on September 30, 2011.~~

~~The Company~~Revenue ~~periodically~~Recognition assesses the impairment of long-lived assets in accordance with Accounting Standards Codification 360, Property, Plant, and Equipment (ASC 360). The Company reviews long-lived assets, including property and equipment, for impairment whenever changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. For the years ended December 31, 2011 and 2010 the Company did not record any impairment losses.

~~Reporting~~The ~~Comprehensive~~Company ~~Income~~evaluates multiple element revenue arrangements under FASB ASC 605-25, Multiple-Element Arrangements (~~Loss~~as amended by ASU No. 2009-13). In addition to the form of the arrangement, the substance of the arrangement is also considered in determining whether separate agreements entered into, at or near the same time, that include elements that are interrelated or interdependent should be treated as one multiple-element arrangement. If the Company concludes that separate agreements represent one arrangement, then all the elements in the separate agreements are combined into one multiple-element arrangement for accounting purposes.

~~Accounting~~Revenues ~~Standards~~from ~~Codification~~non-refundable ~~220,~~license ~~Comprehensive~~fees ~~Income~~are ~~(ASC~~recognized ~~220),~~upon ~~establishes~~receipt ~~standards for the reporting and display~~ of ~~comprehensive income (loss) and its components in~~ the ~~financial~~payment ~~statements.~~if ~~Comprehensive income (loss) is~~ the ~~total~~license ofhas ~~net income (loss) and all other non~~stand-~~owner~~alone ~~changes~~value, inwe ~~equity~~do ~~including~~not ~~such~~have ~~items~~ongoing involvement asor ~~unrealized holding gains/losses on securities~~obligations, ~~foreign~~ ~~currency translation adjustments~~ and ~~minimum~~we ~~pension~~have ~~liability~~determined ~~adjustments. For~~ the ~~year~~best ~~ended~~estimate ~~December 31,~~of ~~2011,~~ the ~~Company~~selling ~~reported~~price afor ~~net~~any ~~loss~~undelivered ofitems. ~~$2,882,214~~When ~~and~~non-refundable alicense ~~comprehensive~~fees ~~loss~~do ofnot ~~$2,913,581~~meet asall ~~a result~~ of ~~the~~these ~~unrealized loss of $31~~criteria,~~367~~ ~~associated with~~ the ~~FluoroPharma~~license ~~Medical,~~revenues ~~Inc.~~are ~~shares.~~recognized ~~For~~over the ~~year~~expected ~~ended~~period ~~December 31, 2010, the Company had no such items and as a result, comprehensive income was the same as reported net income~~ of ~~$512,419~~ performance.

~~Beneficial~~We ~~Conversion~~periodically ~~Feature~~review our expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license fees. When applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement. We could accelerate revenue recognition for non-refundable upfront payments or license fees in the event of an early termination of the agreements. Alternatively, we could decelerate such revenue recognition if our period of involvement is extended. While changes to such estimates have no impact on our reported cash flows, our reported revenue is significantly influenced by our estimates of the period over which our obligations are expected to be performed and, therefore, over which revenue will be recognized.

In31 prior periods, the Company issued preferred stock and notes which are convertible into common stock at a discount from the common stock market price at the date of issuance. The amount of the discount associated with such conversion rights represents an incremental yield, i.e. a “beneficial conversion feature”, that is recorded when the consideration allocated to the convertible security, divided by the number of common shares into which the security converts, is below the fair value of the common stock at the date of issuance of the convertible instrument.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Comprehensive Loss

On January 1, 2012, the Company adopted the new presentation requirements under ASU 2011-05, “Presentation of Comprehensive Income”. ASU 2011-05 requires companies to present the components of net income and the components of other comprehensive income either as one continuous statement or as two consecutive statements. Other than a change in presentation, the implementation of ASU 2011-05 did not have a material impact on our financial statements.

Convertible Redeemable Shares

In accordance with Accounting Standards Codification 480, Distinguishing Liabilities from Equity (ASC 480-10-S99) the Company determined that since the Series F shares are mandatorily redeemable for cash or for a variable, uncapped, number of common shares, they do not qualify for equity classification.

Income Taxes

The Company accounts for income taxes under the liability method. Under the liability method, deferred income taxes are determined based on differences between the financial reporting and tax bases of assets and liabilities. They are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company is required to adjust its deferred tax liabilities in the period when tax rates or the provisions of the income tax laws change. Valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized.

~~Recent~~2. ~~Accounting~~Restricted ~~Pronouncements~~Marketable Securities

InUnder ~~June 2011,~~ the ~~Financial~~terms ~~Accounting~~of ~~Standard~~the ~~Board~~Amended ~~(“FASB”)~~and ~~issued~~Restated ~~ASU~~License ~~No. 2011-05,~~Agreement ~~“Presentation~~with ~~of Comprehensive Income.” ASU 2011-05 eliminates~~ the ~~option~~President ~~to report other comprehensive income~~ and ~~its~~Fellows ~~components~~of inHarvard ~~the~~College ~~statement~~(“Harvard”) entered ofinto ~~changes~~on inJuly 31, ~~stockholders’~~2012, ~~equity~~the ~~and~~Company ~~requires~~had an ~~entity~~obligation to ~~present~~transfer ~~the~~15,000 ~~total~~shares of ~~comprehensive income,~~ the ~~components of~~Navidea ~~net~~stock ~~income~~received ~~and~~from the ~~components~~Navidea ofsublicense ~~other~~agreement ~~comprehensive~~to ~~income either in a single continuous statement or in two separate but consecutive statements~~Harvard. ~~This~~The ~~pronouncement~~market isvalue ~~effective~~of ~~for~~the ~~fiscal~~shares ~~years~~on December 31, ~~and~~2012 ~~interim~~was ~~periods within those years~~$42,450. ~~beginning~~The ~~after~~Company ~~December 15,~~completed ~~2011. We believe~~ the ~~adoption~~transfer of the ~~guidance~~15,000 ~~contained~~shares inof ~~ASU~~NAVB ~~2011-05~~common ~~concerns~~stock ~~presentation~~to ~~and~~Harvard ~~disclosure~~during ~~only~~January ~~and will not have an impact on our consolidated financial position or results of operations~~2013.

23. ~~Short-term~~Property ~~Investments~~and Equipment, net

The Company accounts for short-term investments in accordance with Accounting Standards Codification 320, Investments – Debt and Equity Securities (ASC 320). The Company determines the appropriate classification of all short-term investments as held-to-maturity, available-for-sale or trading at the time of purchase or acquisition and re-evaluates such classification as of each balance sheet date.


	December 31,
	2012		2011
Computer equipment	$	26,539	$	26,539
Office furniture and equipment		6,738		6,738

		33,277		33,277
Less accumulated amortization and depreciation		32,091		30,802

	$	1,186	$	2,475

In32 2005 the Company acquired 25,000 shares of FluoroPharma Series A Preferred Stock that were converted into 25,000 shares of common stock in February 2006. FluoroPharma Medical, Inc. was privately held through 2010 so the Company had been accounting for this investment under the cost method and as such, had ascribed no value to these shares in the Consolidated Balance Sheet as of December 31, 2010.

As a result of FluoroPharma Medical, Inc. starting to trade its shares on a public exchange in September 2011, the Company determined that the shares of FluoroPharma Medical, Inc. acquired in September 2011 in exchange for the 25,000 shares of common stock received in February 2006 should be classified as available-for-sale. These shares are reported at fair value in the Consolidated Balance Sheet as of December 31, 2011 and the unrealized loss of $31,367 associated with these shares is included in other comprehensive loss a component of stockholders’ deficit.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

InDepreciation ~~May~~expense ~~2011~~for ~~FluoroPharma Medical, Inc. stock began trading on~~ the ~~OTC~~year ~~Bulletin~~ended ~~Board (“OTCBB”) under the symbol FPMI.OB. In September 2011~~December 31, ~~the~~2012 ~~Company~~ was ~~issued~~approximately ~~39,209 restricted shares of FluoroPharma Medical, Inc. common stock with a closing price of~~ $1~~.88 on September 30~~, ~~2011~~300. ~~Although the shares were restricted under Rule 144 and~~Amortization ~~had very light trading volume, they were trading on a public exchange~~ and ~~could~~depreciation noexpense ~~longer be accounted~~ for ~~under~~ the ~~cost~~year ~~method.~~ended ~~Taking into consideration the shares trading restrictions and light trading volume, the shares were recorded in the Condensed Consolidated Balance Sheet as of September~~December 3031, 2011 atwas aapproximately ~~20% discount or~~ $141,000.50 ~~per~~Amortization ~~share.~~and ~~The~~depreciation ~~change~~expense ~~in method~~ for ~~valuing~~the ~~these~~period ~~shares~~ from ~~the~~inception ~~cost~~through ~~method to the fair value method resulted in the recognition of a gain of $58,814. The closing price per share for these shares as of~~ December 3031, ~~2011~~2012 ~~was~~totaled ~~$.70~~approximately ~~or an aggregate value of~~ $272,~~446~~891,955.

34. ~~Property~~Accounts Payable and ~~Equipment,~~Accrued ~~net~~Expenses

	December 31,
	2011		2010
Leasehold improvements	$	—	$	132,170
Computer equipment		26,539		88,985
Office furniture and equipment		6,738		78,403
		33,277		299,558
Less accumulated amortization and depreciation		30,802		251,884
	$	2,475	$	47,674

The Company’s management is required to estimate accrued expenses as part of the process of preparing financial statements. Accrued expenses include professional service fees for legal services, accounting and tax services and regulatory reporting services.

Amortization and depreciation expense for the years ended December 31, 2011 and 2010 was approximately $41,000 and $59,000, respectively, and $1,653,000 for the period from inception through December 31, 2011.


	December 31, 2012		December 31, 2011
Research and development expenses	$	1,339,851	$	1,316,095
Professional fees		735,990		715,672
General and administrative expenses		121,554		99,746
Compensation related expenses		81,003		78,716

	$	2,278,398	$	2,210,229

45. ~~Net~~Deferred ~~Income~~charges ~~(Loss) per share~~

~~The~~Under ~~Company~~the ~~reports~~terms ~~earnings~~of ~~per~~the ~~share~~Amended ~~in accordance with Accounting Standards Codification 260, Earnings Per Share (ASC 260), which establishes standards for computing~~ and ~~presenting~~Restated ~~earnings~~License ~~per~~Agreement ~~share. Basic and diluted net income (loss) per share is presented in conformity~~ with ~~the~~Harvard, ~~two-class~~total ~~method~~license ~~required~~fees ~~for~~of ~~participating securities. Under the two-class method~~$66,050 ~~basic~~are ~~net~~due ~~income (loss) per share is computed by dividing the net income (loss) attributable~~ to ~~common~~Harvard ~~stockholders~~related by to the ~~weighted-average~~cash ~~number of common shares outstanding during the period. Net income (loss) attributable to common stockholders is determined by allocating undistributed earnings between holders of common~~ and ~~convertible preferred~~ stock, ~~based~~consideration onreceived from the ~~contractual~~sublicense ~~dividend rights contained in our preferred stock~~ agreement. ~~No preferred~~with ~~dividends~~Navidea ~~have~~The ~~been~~Company ~~declared and, as such, preferred dividends have not affected our computation of net income available to common stockholders. Diluted net income (loss) per share~~ is ~~computed~~amortizing bythose ~~dividing~~license ~~net~~fees ~~income~~on ~~(loss) by~~a ~~the~~straight-line ~~sum of~~basis ~~the~~over ~~weighted average number of common shares and~~ the ~~number~~estimated ofperformance ~~dilutive~~period ~~potential~~which ~~common~~is ~~share equivalents outstanding during~~ the ~~period.~~effective ~~Dilutive~~date ~~common share equivalents consist~~ of the ~~incremental~~agreements ~~common~~on July 31, ~~shares~~2012 ~~issuable~~through ~~upon~~ the ~~conversion~~patent ~~of the~~expiration ~~Series F~~date ~~convertible~~in ~~preferred stock to common shares~~June 2030.

~~In computing diluted earnings per share, common stock equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common stock equivalents would be anti-dilutive~~6. AsNet ~~a result, there is no difference between the Company’s basic and diluted loss~~ Loss per share ~~for the year ended December 31, 2011.~~

Basic and diluted net income (loss) per share	December 31,
	2011			2010
Net income (loss)	$	(2,882,214	)	$	512,419
Less: Accretion of Preferred stock		—			(343,000	)
Less: Income allocated to convertible preferred shares		—			(26,282	)
Income (loss) available to common stockholders for the purpose of calculating basic & diluted EPS		(2,882,214	)		143,137
Weighted average common shares, basic		29,626,072			26,686,933
Dilutive effect of Series F preferred share conversion		—			4,900,000
Weighted average common shares, diluted		29,626,072			31,586,933
Net income (loss) per share, basic	$	(0.10	)	$	0.01
Net income (loss) per share, diluted	$	(0.10	)	$	0.00

Basic and diluted net loss per share attributable to common stockholders has been calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. All potentially dilutive common shares have been excluded from the calculation of weighted average common shares outstanding since their inclusion would be anti-dilutive.

30Stock options to purchase approximately 3.0 million shares of common stock were outstanding at December 31, 2012, but were not included in the computation of diluted net loss per common share because they were anti-dilutive. Stock options and warrants to purchase approximately 3.6 million shares of common stock were outstanding at December 31, 2011, but were not included in the computation of diluted net loss per common share because they were anti-dilutive. In computing diluted earnings per share, common stock equivalents in the

form of convertible redeemable preferred stock were not included in the calculation of net loss per share as their inclusion would be anti-dilutive. The exercise of stock options outstanding at December 31, 2012 could potentially dilute earnings per share in the future.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Stock~~7. ~~options~~Notes Payable and ~~warrants~~Debt to purchase 3,652,443 shares of common stock were outstanding as of December 31, 2010, but were not included in the computation of diluted net loss per common share because the exercise prices were greater than the average market price for the period, making them anti-dilutive.

Shares of common stock reserved for issuance upon conversion of the 5% Convertible Promissory Notes were 8,731,035 and 13,485,889 as of December 31, 2011 and 2010, respectively, but were not included in the computation of diluted net income (loss) per share because they would have been anti-dilutive. The conversion of the 5% convertible promissory notes outstanding as of December 31, 2011 could potentially dilute earnings per share in the future.


	December 31,
Convertible Notes Payable to Significant Stockholders	2012		2011
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010	$	—	$	4,655,173
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010		—		10,000,000
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010		—		2,172,415
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010		—		5,000,000

Aggregate carrying value	$	—	$	21,827,588

5No interest expense was incurred related to the convertible notes payable for the year ended December 31, 2012. ~~Accounts~~Interest ~~Payable~~expense totaling $1,417,776 was incurred related to the convertible notes payable for the year ended December 31, 2011. In December 2011 the Company entered into the Fifth Amendment to Convertible Note Purchase Agreement (“Amendment”) with the Purchasers of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in March, 2007. The Amendment provided that each Purchaser would waive their respective right to be paid any and ~~Accrued~~all interest ~~Expenses~~accrued or to be accrued pursuant to the promissory notes issued under the Note Purchase Agreement. This transaction resulted in a reduction of $6,132,499 in accrued interest expense. The Amendment related to convertible promissory notes held by the Company’s majority shareholder, therefore the reversal of this accrual was recorded as a contribution to capital.

Major components	December 31,
	2011		2010
Research and development expenses	$	1,316,095	$	2,058,782
Professional fees		715,672		1,140,044
General and administrative expenses		99,746		270,920
Compensation related expenses		78,716		107,063
	$	2,210,229	$	3,576,809

In December 2012, Arthur Koenig and Ingalls & Snyder Value Partners LLP elected to convert the remaining $5,827,588 of their convertible notes payable into common stock of the Company. Effective July 31, 2012, Arthur Koenig and Ingalls & Snyder Value Partners LLP had executed the Sixth Amendment to Convertible Note Purchase Agreement. The sixth amendment provides that the two lenders waive any and all rights to convert the $5,827,588 of principal still outstanding under the promissory notes into royalty on future sales of the Company’s Altropane product, while retaining their right to convert all or any portion of the remaining convertible debt to common stock of the Company at $2.50 per share.

6Effective July 31, 2012, Robert Gipson, Thomas Gipson, Arthur Koenig and Ingalls & Snyder Value Partners LLP, all lenders to the Company under a Convertible Note Purchase Agreement originally executed in 2007, elected to convert $16,000,000 of principal outstanding under the promissory notes to a royalty on future net sales of the Company’s Altropane product (see Note 8). ~~Notes~~All ~~Payable~~other rights under the Convertible Note Purchase Agreement related to the $16,000,000 of principal were waived by the lenders. As of December 31, 2012, the contingent royalty liability resulting from the conversion is classified as a Level 3 liability and ~~Debt~~is reflected in the consolidated balance sheet at its fair value as a long-term liability.

Convertible Notes Payable to Significant Stockholders		December 31,
		2011		2010
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010		$	4,655,173	$	9,000,000
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010	BCF		10,000,000		10,000,000
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010	BCF		2,172,415		5,000,000
Unsecured convertible promissory note; interest rate of 5%; due December 31, 2010			5,000,000		5,000,000
Aggregate carrying value		$	21,827,588	$	29,000,000

The Company has demonstrated financial difficulties. Further, the intent of the above convertible debt conversion and modifications was to allow for continued product development and was considered to be the most viable option for the Company. Based on these factors, these transactions were considered to be concessions and were accounted for as a troubled debt restructuring under the guidance of ASC 470-60-55. As prescribed in ASC 470-60-35-11, when estimates are used relating to the maximum future cash payments as is this case, no gain shall be recognized until the estimated maximum future cash payments fall below the carrying value of the debt before restructuring. As a result of applying this guidance the company has determined that the carrying value of the obligation remains $16,000,000 at December 31, 2012.

~~Interest~~34 ~~expense totaling $1,417,776 and $1,657,432 was incurred related to the convertible notes payable for the years ended December 31, 2011 and 2010, respectively.~~

In December 2011 the Company entered into the Fifth Amendment to Convertible Note Purchase Agreement (“Amendment”) with the Purchasers of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in March, 2007. The Amendment provided that each Purchaser would waive their respective right to be paid any and all interest accrued or to be accrued pursuant to the promissory notes issued under the Note Purchase Agreement. This transaction resulted in the reduction of $6,132,499 in accrued interest expense. The Amendment further provided that two of the Purchasers would convert a portion of the amounts owed to them into common stock of the Company at $2.50 per share as provided in the Note Purchase Agreement. Robert Gipson converted $5,827,585 of debt into 2,331,034 shares of common stock and Thomas Gipson converted $1,344,827 of debt into 537,931 shares of common stock. As a result of this transaction, $28,690 was recorded to the common stock account and $7,143,722 was recorded to additional paid-in-capital a component of Stockholders’ deficit.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company considered the guidance offered under Accounting Standards Codification ASC 470-50-40-2 and ASC 470-50-40-3, “Debt – Modifications and Extinguishments – Derecognition”. The Company determined that the extinguishment of the debt more closely represented a capital transaction. The $6,132,499 in forgiven accrued interest occurred with a related party and was therefore classified as a capital transaction and recorded to additional paid-in capital a component of stockholders’ deficit.

The remaining unsecured convertible promissory notes may be converted, at the option of the Purchasers, into (i) shares of the Company’s common stock at a conversion price per share of $2.50, (ii) the right to receive future payments related to the Company’s molecular imaging products (including Altropane and FLUORATEC) in amounts equal to 2% of the Company’s pre-commercial revenue related to such products plus 0.5% of future net sales of such products for each $1,000,000 of outstanding principal and interest that a Purchaser elects to convert into future payments, or (iii) a combination of (i) and (ii). Any outstanding notes that are not converted into the Company’s common stock or into the right to receive future payments became due and payable on December 31, 2010. However, each Purchaser is prohibited from effecting a conversion into common stock if at the time of such conversion the common stock issuable to such Purchaser, when taken together with all shares of common stock then held or otherwise beneficially owned by such Purchaser exceeds 19.9%, or 9.99% ISVP, of the total number of issued and outstanding shares of the Company’s common stock immediately prior to such conversion unless and until the Company’s stockholders approve the conversion of all of the shares of common stock issuable there under. There has been no demand for amounts due and the classification remains current.

The Company is subject to certain debt covenants pursuant to the March 2008 Amended Purchase Agreement and the June 2008 Purchase Agreement (the “Purchase Agreements”). If the Company (i) fails to pay the principal or interest due under the Purchase Agreements, (ii) files a petition for action for relief under any bankruptcy or similar law or (iii) an involuntary petition is filed against the Company, all amounts borrowed under the Purchase Agreements may become immediately due and payable by the Company. In addition, without the consent of the Purchasers, the Company may not (i) create, incur or otherwise, permit to be outstanding any indebtedness for money borrowed, (ii) declare or pay any cash dividend, or make a distribution on, repurchase, or redeem, any class of the Company’s stock, subject to certain exceptions or sell, lease, transfer or otherwise dispose of any of the Company’s material assets or property or (iii) dissolve or liquidate.

Beneficial Conversion Feature (BCF)

Three of the unsecured promissory notes were issued with a conversion price of $2.50 which was below the market price of the Company’s common stock on the dates the agreements were entered into and resulted in the recording of a beneficial conversion feature. The Company recorded a BCF of $1,400,000 on (the “ISVP”) note and a BCF of $380,000 on (the “2008 RG”) note which was recognized as a decrease in the carrying value and an increase to additional paid-in capital. The BCF was recognized as interest expense using the effective interest method through December 31, 2010. The Company recorded interest expense related to the BCF of approximately $724,000 for the year ended December 31, 2010.

Promissory Notes

Notes Payable to Significant Stockholder	December 31,
	December 31,
	2011		2010
Notes Payable to Significant Stockholder	2012		2011
Unsecured demand note payable; interest rate of 7% to Neurobiologics, Inc. (a subsidiary of the Company)	$	—	$	1,000,000
Unsecured demand note payable; interest rate of 7%: issued December 2009	$	350,000	$	350,000
Unsecured demand note payable; interest rate of 7%: issued December 2009		350,000		350,000
Unsecured demand notes payable; interest rate of 7%: issued January 2010 — December 2010		3,310,000		3,310,000
Unsecured demand notes payable; interest rate of 7%: issued January 2010 - December 2010		3,310,000		3,310,000
Unsecured demand notes payable; interest rate of 7%: issued January 2011 — December 2011		2,240,000		2,240,000
Unsecured demand notes payable; interest rate of 7%: issued January 2011 - December 2011		2,240,000		—
Unsecured demand notes payable; interest rate of 7%: issued January 2012 — September 2012		510,000		—
		5,900,000		4,660,000
		6,410,000		5,900,000
Accrued interest		~~486~~919,~~691~~526		~~270~~486,~~759~~691
Aggregate carrying value	$	67,~~386~~329,~~691~~526	$	46,~~930~~386,~~759~~691

Interest expense totaling $~~411~~432,~~741~~835 and $~~208~~411,~~018~~741 was incurred related to the notes payable for the years ended December 31, ~~2011~~ 2012 and ~~2010~~2011, respectively.

InAccording ~~November~~to ~~2011~~a Schedule D/A filed with the SEC on December 27, 2011 Robert Gipson beneficially owned approximately 50.1% of the outstanding common stock of the Company ~~purchased~~as ~~from~~of ~~Robert~~that Ldate. Robert Gipson, (who serves as a Senior Director of Ingalls & Snyder and a General Partner of ISVP, served as a director of the ~~“Holder”)~~Company anfrom June 15, ~~unsecured~~2004 ~~promissory~~until ~~note~~October 28, ~~pursuant~~2004. According to ~~which~~a Schedule D/A filed with the ~~Company’s~~SEC ~~wholly~~on ~~owned~~December 27, ~~subsidiary~~2011, ~~Neurobiologics~~Thomas ~~Inc~~Gipson beneficially owned approximately 15.,2% ~~had~~of ~~borrowed~~the anoutstanding ~~aggregate~~common ~~principal~~stock ~~amount~~of the Company as of ~~$1,000,000~~that (“date. According to a Schedule 13G/A filed with the ~~Note”)~~SEC ~~dated~~on ~~February~~June 117, ~~2009.~~2011, AtArthur Koenig beneficially owned approximately 7% of the ~~time~~outstanding common stock of the ~~purchase~~Company on June 1, 2011. According to a Schedule 13G/A filed with the SEC on ~~$195~~February 2,~~807~~ 2012, ISVP owned approximately 9.99% of ~~interest~~the ~~had~~outstanding ~~accrued~~common onstock of the ~~Note~~Company as of December 31, 2011. ~~The~~According ~~purchase~~to ~~price~~a ~~for~~Schedule 13G/A filed with the ~~Note~~SEC ~~and~~on ~~all~~February 7, ~~accrued~~2012, ~~interest~~Ingalls & ~~was~~Snyder ~~$1,000.~~LLC beneficially ~~This~~owned ~~transaction~~approximately ~~resulted~~9.99% inof athe ~~reduction~~outstanding common stock of ~~$195,807~~the inCompany ~~accrued~~on ~~interest~~December 31, ~~expense~~2011.

~~The Company considered the guidance offered under Accounting Standards Codification ASC 470-50-40-2 and ASC 470-50-40-3, “Debt – Modifications and Extinguishments – Derecognition”~~8. ~~The~~Contingent ~~Company~~Royalty ~~determined~~Liability that the extinguishment of the debt more closely represented a capital transaction. The $195,807 in forgiven accrued interest and the gain of $999,000 due to the difference between the purchase price of $1,000 and the carrying value of the extinguished debt of $1,000,000 occurred with a related party and was therefore classified as a capital transaction and recorded to additional paid-in capital a component of stockholders’ deficit.

32Effective July 31, 2012, Robert Gipson, Thomas Gipson, Arthur Koenig and Ingalls & Snyder Value Partners LLP, all lenders to the Company under a Convertible Note Purchase Agreement originally executed in 2007, elected to convert $16,000,000 of principal outstanding under the promissory notes to a royalty on future net sales of the Company’s Altropane product. See Note 7 for full disclosure of this transaction.

9. Revenue Recognition

Our revenues have been generated primarily through sublicense and option agreements related to our Altropane product. The terms of these agreements generally contain multiple elements, or deliverables, which have included (i) licenses or options to obtain licenses to our technology; (ii) technology transfer obligations related to the licenses and (iii) research, development, regulatory and commercialization activities to be performed on our behalf. Payments to the Company under these arrangements typically include one or more of the following: non-refundable, up-front license fees; option exercise fees; milestone payments; and royalties on future product sales.

The Company evaluates multiple element revenue arrangements under FASB ASC 605-25, Multiple-Element Arrangements (as amended by ASU No. 2009-13) as described in Note 1.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7We considered a variety of factors in determining the appropriate method of accounting for our licensing agreements, including whether the various elements had fair value on a standalone basis and could be separated and accounted for individually as separate units of accounting. ~~Forgiveness~~Where there are multiple deliverables identified within the licensing agreement that are combined into a single unit of ~~debt~~accounting, ~~Accrual~~revenues ~~Reversal~~are deferred and ~~Other~~recognized ~~Income~~over the expected period of performance. The specific methodology for the recognition of the revenue is determined on a case-by-case basis according to the facts and circumstances of the applicable agreement.

~~Forgiveness~~Option ofAgreement ~~debt~~with ~~totaling~~Navidea $476,837 was recognized for the year ended December 31, 2011 as compared to $0 for the year ended December 31, 2010. In July 2011, John Preston, Henry Brem, Gary Frashier and Robert Langer signed settlement agreements to resolve unpaid fees due to them for services rendered during the period of July 2008 through January 2010. As of the settlement date a total of $358,500 had been accrued for director and consulting fees. Per the agreements, each former board member was issued one share of stock for each dollar owed. The Company stock closed at $.08 per share on the effective date of the agreements. As a result of these transactions $327,570 was recognized as forgiveness of debt.

InOn ~~July~~January 19, ~~2011~~2012 the Company entered into an Option Agreement with Navidea to license [123I]-E-IAFCT Injection (also referred to as Altropane), ~~Michael~~an Iodine-123 ~~Mullen~~radio labeled imaging agent being developed as an aid in the diagnosis of Parkinson’s disease and ~~William Guinness~~movement ~~our~~disorders. ~~current~~Under ~~board~~the ~~members~~terms of the option agreement, ~~signed~~Navidea ~~settlement~~paid ~~agreements~~the toCompany ~~resolve~~a ~~unpaid~~non-refundable ~~fees~~option ~~due~~fee of $500,000 upon signing the exclusive right to ~~them~~negotiate ~~for~~a ~~services~~definitive ~~rendered~~license ~~during~~agreement ~~the~~by ~~period~~June 30, 2012 with a no-fee extension of ~~July~~the ~~2008~~diligence period through ~~January~~July 31, ~~2010~~2012 available to Navidea. AsThe ofoption agreement provided Navidea with exclusive rights to license the ~~settlement~~asset ~~date~~and ~~approximately~~complete ~~$172,000~~further ~~had~~diligence ~~been~~and ~~accrued~~ prepare the documentation necessary to enter into a definitive license agreement for ~~directors~~Altropane. ~~fees~~Our ~~owed~~deliverables through June 30, 2012 were to provide assistance to Navidea with regards to meetings and communications with the ~~two~~Food ~~board~~and ~~members~~Drug ~~who~~Administration ~~agreed~~(“FDA”) to allow Navidea to evaluate a ~~reduced~~path ~~payment~~to ~~totaling~~commercialization and the feasibility of exercising the license option. As such we determined that the $22500,~~400~~000 non-refundable option fee received from Navidea represented a unit of accounting separate from scheduled milestone payments that would be receivable should the license option be exercised. AsTherefore the Company recognized the non-refundable option fee received from Navidea ratably over the option period which ended June 30, 2012 as the Company had continuing performance obligations through that date. Regulatory feedback received in June caused Navidea to extend their diligence review through July 31, 2012 which they elected to do ahead of executing a ~~result~~license on July 31, 2012. The extension of ~~these~~diligence ~~transactions~~in ~~approximately~~to ~~$149~~July created no additional obligations on Alseres beyond those completed by June 30,~~000~~ so no adjustment to revenue was ~~recognized~~required as ~~forgiveness~~a result of ~~debt~~the extension by Navidea.

AnSublicense ~~accrual~~Agreement ~~reversal of $561,195 was recorded for the year ended December 31, 2011. The reversal related to a potential dispute~~ with aNavidea ~~contract manufacturer that had been accrued for in 2009 as a research and development expense.~~

~~Other~~Effective ~~income of $43~~July 31,~~814~~ ~~was~~2012 ~~primarily attributable to~~ the ~~issuance to the~~ Company ofentered ~~39,209~~into ~~restricted~~an ~~shares of FluoroPharma Medical~~exclusive, ~~Inc.~~worldwide ~~common~~sublicense ~~stock~~agreement with aNavidea ~~closing price of $1.88 on September 30~~Biopharmaceuticals, ~~2011~~Inc. ~~Although the shares were restricted under Rule 144 and had very light trading~~ ~~volume,~~(“Navidea”) ~~they were trading on a public exchange and could no longer be accounted~~ for ~~under~~ the ~~cost~~research, ~~method.~~development ~~Taking into consideration the shares trading restrictions~~ and ~~light~~commercialization ~~trading volume, the shares were recorded in the Condensed Consolidated Balance Sheet as~~ of ~~September 30, 2011 at a 20% discount or $1~~Altropane.50 ~~per~~Altropane ~~share.~~is ~~The~~an ~~change~~iodine-123 inradiolabeled ~~method~~imaging ~~for~~agent ~~valuing~~which ~~these~~is ~~shares~~being ~~form~~developed ~~the~~as ~~cost~~an ~~method~~aid ~~to the fair value method resulted~~ in the ~~recognition~~diagnosis of aParkinson’s ~~gain~~disease ofand ~~$58,814.~~movement ~~This transaction is described in greater detail in Note 2 of these Consolidated Financial Statements~~disorders.

8The Company concluded that the Sublicense Agreement entered into with Navidea and the Amended and Restated License Agreement entered into with Harvard effective July 31, 2012, should be accounted for as a single unit of accounting in accordance with the rules set forth in FASB ASC 605-25. ~~Exit~~These ~~Activities~~transactions are described in greater detail in Note 13 of these Consolidated Financial Statements.

InThe ~~September 2005,~~Company’s deliverables under the ~~Company~~Sublicense ~~relocated~~Agreement ~~its~~with ~~headquarters~~Navidea ~~from~~include ~~Boston~~granting toa ~~Hopkinton,~~license ~~Massachusetts.~~of ~~The~~rights ~~Company~~and transferring ~~amended~~technology ~~its~~(“know-how”) ~~lease dated~~related ~~January 28,~~to ~~2002~~Altropane ~~with~~and ~~Brentwood~~an ~~Properties,~~affirmative ~~Inc.~~obligation ~~(the~~to ~~“Landlord”)~~ensure ~~for~~that the ~~property~~Harvard ~~located~~agreement onremains ~~Newbury~~in ~~Street~~full inforce ~~Boston~~and effect. InUnder ~~May 2011,~~the terms of the ~~landlord~~Amended ~~agreed~~and toRestated ~~the~~License ~~termination~~Agreement ofwith ~~the~~Harvard, the Company’s ~~lease~~deliverables ~~obligation~~included on(i) the ~~Newbury Street~~use ~~which~~of ~~was~~reasonable ~~scheduled~~efforts to ~~expire~~effect onintroduction ~~May 31,~~of ~~2012.~~the Inlicensed ~~consideration~~products ~~for~~into the ~~early~~commercial ~~termination~~market as soon as practicable, consistent with sound and reasonable business practices and judgment and (ii) until expiration of the ~~lease~~agreement, the Company ~~waived~~shall ~~all~~endeavor ~~rights~~to ~~under~~keep licensed product reasonably available to the ~~Lease~~public. ~~Agreement~~The Company determined that pursuant to the ~~security~~accounting ~~deposit~~guidance ~~and~~governing ~~accrued~~revenue ~~interest~~recognition on multiple element arrangements, the granting of ~~approximately~~a ~~$89~~license of rights,~~200.~~ the transfer of technology

As36 a result of the Company’s relocation, an expense had been recorded for the cost associated with the exit activity at its fair value in the period in which the liability was incurred. The liability recorded was calculated by discounting the estimated cash flows for the two sublease agreements and the Lease Agreement using an estimated credit-adjusted risk-free rate of 15%. As of the early termination date, the remaining accrual balance of approximately $76,100 was written-off resulting in net expense of $13,100 included in general and administrative expense in the accompanying Consolidated Statements of Operations.

	December 31,2010		Cash payments, net ofsublease receipts		December 31,2011
Lease Amendment	$	96,425	$	96,425	$	—
Short-term portion of lease accrual		65,922				—
Long-term portion of lease accrual	$	30,503			$	—

~~For~~ALSERES ~~the years ended December 31~~PHARMACEUTICALS, 2011 and 2010, the Company recorded approximately $17,300 and $19,000, respectively of expense related to the imputed cost of the lease expense accrual included in general and administrative expense in the accompanying Consolidated Statements of OperationsINC.

9.(A ~~Stockholders’~~Development ~~Deficit~~Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(“know-how”) related to Altropane and our continuing obligations to Harvard set forth in the Amended and Restated License Agreement were not separable and, accordingly, are being treated as a single unit of accounting. The Company applied the guidance in ASC 605 Revenue Recognition, to determine the appropriate revenue recognition period for the upfront sublicense execution payment received from Navidea. Advance payments received in excess of amounts earned are classified as deferred revenue until earned. The upfront sublicense execution payment of $175,000 in cash and the market value of $1,146,000 for the 300,000 shares of Navidea common stock as of July 31, 2012 were recorded as deferred revenue. Revenue will be recognized ratably from the date the sublicense agreement became effective on July 31, 2012, through the expected life of the last to expire issued and sublicensed U.S. patent for Altropane in June 2030.

The sublicense agreement also provides for contingent milestone payments to the Company of up to $2.9 million and the issuance of up to an additional 1.15 million shares of Navidea common stock. Milestone payments of $2.5 million and the issuance of 550,000 shares of Navidea common stock will occur at the time of product registration. The Company will be issued an additional 400,000 shares of Navidea common stock when certain cumulative net sales of the approved product are achieved. In addition, the license terms anticipate royalties on yearly net sales of the approved product which are consistent with industry-standard terms and certain license extension fees, payable in cash and shares of common stock, in the event certain milestones are not met.

The following summarizes the Company’s revenue generating transactions for the year ended December 31, 2012:


	Total Revenue Generated		Revenue Recognized		Deferred Revenue
Option agreement	$	500,000	$	500,000	$	—
Sublicense agreement		1,320,997		30,720		1,290,277

Total	$	1,820,997	$	530,720	$	1,290,277

Unearned revenue of $73,730 is reflected as a current liability and $1,216,547 is classified as a long-term liability in the consolidated balance sheet.

10. Stockholders’ Deficit

Common Stock

~~In July~~On ~~2011~~December 31, ~~John~~2012 ~~Preston,~~the ~~Henry~~Company ~~Brem,~~agreed ~~Gary Frashier and Robert Langer signed settlement agreements~~ to ~~resolve~~purchase ~~unpaid~~537,931 ~~fees~~shares ~~due to them for services rendered during the period~~ of ~~July~~common ~~2008~~stock ~~through~~held ~~January~~by ~~2010.~~Arthur AtKoenig ~~the~~and ~~time of the agreements~~1,793,104 ashares ~~total~~ of ~~$358,500~~ ~~had~~common ~~been~~stock ~~accrued~~held ~~for~~by ~~director~~ISVP ~~and~~Partners ~~consulting~~at ~~fees.~~a ~~Per~~purchase ~~the~~price ~~agreements,~~per ~~each former board member was issued one~~ share of ~~stock~~$0.0008 for ~~each~~total ~~dollar~~proceeds ~~owed~~of $1,864. The closing price for the Company’s stock ~~closed~~on atDecember 27th was $0.08 per share ~~on the effective date of the agreements~~. ~~As a result of these transactions a total of 358,500 shares of Company stock were issued.~~

OnFor the year ended December 1631, ~~2011~~2012, the Company ~~purchased~~had repurchased a total of 12,~~108~~331,~~425~~035 shares of ~~the~~its ~~Company’s~~ common stock ~~held~~and byapplied ~~certain shareholders of~~ the ~~Company~~constructive atretirement ~~$0.01~~method ~~per~~to ~~share~~these ~~or a total of $11,084~~shares. The ~~Company~~constructive ~~purchased~~retirement ~~60,000~~method ~~shares~~was ~~from~~applied ~~Robert~~to ~~Gipson,~~these ~~530,000~~ shares ~~from~~as ~~Thomas~~management ~~Gipson,~~does ~~100,000~~not ~~shares from~~intend ~~Ingalls~~to ~~and~~reissue ~~Snyder~~the ~~Value Partners, 50,000~~ shares ~~from~~within ~~Arthur~~a reasonable ~~Koenig~~period ~~and~~of ~~218,425 shares from Nikos Monoyios~~time. ~~An additional 150,000 shares were purchased from other holders.~~ The ~~closing~~aggregate ~~price~~value ~~for~~of the ~~Company’s~~shares ~~stock~~reacquired onin ~~December 16th~~2012 was $023,310.14 ~~per~~This ~~share.~~amount ~~The~~has ~~price~~been ~~per~~charged ~~share paid by the Company~~ to the ~~sellers~~common ~~represented~~stock ~~a 93% discount to the market price for the shares~~account.

In ~~December~~ July 2011, ~~the~~John ~~Company~~Preston, ~~entered~~Henry into the Fifth Amendment to Convertible Note Purchase Agreement (“Amendment”) with the Purchasers of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in MarchBrem, ~~2007.~~Gary ~~The~~Frashier ~~Amendment~~and ~~provided~~Robert ~~that~~Langer ~~each~~signed ~~Purchaser~~settlement ~~would~~agreements ~~waive their respective right~~ to beresolve ~~paid~~unpaid ~~any~~fees ~~and~~due ~~all interest accrued or~~ to bethem ~~accrued~~for ~~pursuant~~services torendered ~~the~~during ~~promissory notes issued under~~ the ~~Note~~period ~~Purchase Agreement. The Amendment further provided that two~~ of ~~the~~July ~~Purchasers~~2008 ~~would~~through ~~convert~~January 2010. aAt ~~portion of~~ the ~~amounts~~time ~~owed to them into common stock~~ of the ~~Company at $2.50 per share as provided in the Note Purchase Agreement. Robert Gipson converted $5~~agreements,~~827,585~~ ofa ~~debt~~total ~~into 2,331,034 shares~~ of ~~common stock and Thomas Gipson converted~~ $1358,~~344,827~~500 ofhad ~~debt~~been ~~into~~accrued ~~537,931~~for ~~shares~~director ofand ~~common~~consulting ~~stock~~fees. AsPer ~~a result of this transaction, $28,690 was recorded to~~ the ~~common stock account and $7,143,722 was recorded to additional paid-in-capital a component of Stockholders’ deficit.~~

3337

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

agreements, each former board member was issued one share of stock for each dollar owed. The Company stock closed at $.08 per share on the effective date of the agreements. As a result of these transactions a total of 358,500 shares of Company stock were issued.

On December 16, 2011 the Company purchased a total of 1,108,425 shares of the Company’s common stock held by certain shareholders of the Company at $0.01 per share or a total of $11,084. The Company purchased 60,000 shares from Robert Gipson, 530,000 shares from Thomas Gipson, 100,000 shares from Ingalls and Snyder Value Partners, 50,000 shares from Arthur Koenig and 218,425 shares from Nikos Monoyios. An additional 150,000 shares were purchased from other holders. The closing price for the Company’s stock on December 16th was $0.14 per share. The price per share paid by the Company to the sellers represented a 93% discount to the market price for the shares.

For the year ended December 31, 2011, the Company had repurchased a total of 3,977,390 shares of its common stock and applied the constructive retirement method to these shares. The constructive retirement method was applied to these shares as management does not intend to reissue the shares within a reasonable period of time. The aggregate value of the shares reacquired in 2011 was $18,256. This amount has been charged to the common stock account.

For the year ended December 31, 2010, the Company had repurchased 270,000 common shares from Robert Gipson at $.03 per share for a total of $8,125. The closing price for the Company’s stock on December 28th was $0.15 per share. The constructive retirement method was applied to those shares as management did not intend to reissue the shares within a reasonable period of time. The price per share paid by the Company to Mr. Gipson represented an 80% discount to the market price for the shares.

Preferred Stock

The Company authorized 1,000,000 shares of preferred stock of which 25,000 shares have been designated as Series A Convertible Preferred Stock, 500,000 shares have been designated as Series D Convertible Preferred Stock, and 800 shares have been designated as Series E Cumulative Convertible Preferred Stock (the “Series E Stock”). In March 2009, the Company designated 200,000 shares as Series F Convertible Preferred Stock (“Series F Stock”). The remaining authorized shares have not been designated.

Convertible Preferred Stock

In 2009 the Company issued a total of 196,000 shares of Series F convertible preferred stock to Robert Gipson and received gross proceeds of $4,900,000. On June 1, 2011 the Company issued to Robert L. Gipson 4,600,000 shares of its common stock in exchange for the conversion by Mr. Gipson of 184,000 shares of the Company’s Series F Convertible, Redeemable Preferred Stock (“Series F Stock”). Each share of the Series F Stock was converted into 25 shares of common stock pursuant to the conversion terms of the Series F Stock contained in the Certificate of Designation for the Series F Stock. The cumulative accrued interest at the date of conversion of $640,874 was reclassified to additional paid-in capital since the shares were no longer redeemable. As of December 31, ~~2011~~2012 there remained 12,000 shares of Series F Stock outstanding and held by Mr. Gipson.

The key terms of the Series F Stock are summarized below:

Dividend: The Series F Stock is entitled to receive any dividend that is paid to holders of our common stock. Any subdivisions, combinations, consolidations or reclassifications to the common stock must also be made accordingly to Series F Stock, respectively.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Liquidation Preference: In the event of our liquidation, dissolution or winding up, before any payments are made to holders of our common stock or any other class or series of our capital stock ranking junior as to liquidation rights to the Series F Stock, the holders of the Series F Stock will be entitled to receive the greater of (i) $25.00 per share (subject to adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares) plus any outstanding and unpaid dividends thereon and (ii) such amount per share as would have been payable had each share been converted into common stock. After such payment to the holders of Series F Stock and the holders of shares of any other series of our preferred stock ranking senior to the common stock as to distributions upon liquidation, the remaining our assets will be distributed pro rata to the holders of our common stock.

Voting Rights: Each share of Series F Stock shall entitle its holder to a number of votes equal to the number of shares of our common stock into which such share of Series F Stock is convertible.

Conversion: Each share of Series F Stock is convertible at the option of the holder thereof at any time. Each share of Series F Stock is initially convertible into 25 shares of common stock, subject to adjustment in the event of certain dividends, stock splits or stock combinations affecting the Series F Stock or the common stock, and subject to adjustment on a weighted-average basis in the event of certain issuances by us of securities for a price less than the then-current price at which the Series F Stock converts into common stock.

Redemption: At any time after September 1, 2011, any holder of Series F Stock may elect to have some or all of such shares redeemed by us at a price equal to the aggregate of (i) $25 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), or the Original Issue Price, plus (ii) all declared but unpaid dividends thereon, plus (iii) an amount computed at a rate per annum of 7% of the Original Issue Price from March 19, 2009 until the redemption date. No redemption demand has been made as of December 31, ~~2011~~2012.

Accretion: The terms of the Series F Stock contain provisions that may require redemption in circumstances that are beyond the Company’s control. Therefore, the shares have been recorded, net of issuance costs of approximately $25,000, as convertible, redeemable stock outside of permanent equity. The Series F Stock was recorded at fair value on the date of issuance. As of December 31, ~~2011~~2012, the Company recorded approximately $~~486~~21,~~000~~057 in accretion on the outstanding Series F Stock.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Options and Warrants

Stock Option Plans

The Company can issue both nonqualified and incentive stock options to employees, officers, consultants and scientific advisors of the Company under the Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). At December 31, 2009, the 2005 Plan provided for the issuance of options, restricted stock, restricted stock units, stock appreciation rights or other stock-based awards to purchase 3,050,000 shares of the Company’s common stock. The 2005 Plan contains a provision that allows for an annual increase in the number of shares available for issuance under the 2005 Plan on the first day of each of the Company’s fiscal years during the period beginning in fiscal year 2006 and ending on the second day of fiscal year 2014. The annual increase in the number of shares shall be equal to the lowest of 400,000 shares; 4% of the Company’s outstanding shares on the first day of the fiscal year; and an amount determined by the Board of Directors. No adjustment to the 2005 Plan was made on January 1, 2011.

At December 31, 2009, the 2005 Plan provided for the issuance of options, restricted stock, restricted stock units, stock appreciation rights or other stock-based awards to purchase 3,050,000 shares of the Company’s common stock. The 2005 Plan contains a provision that allows for an annual increase in the number of shares available for issuance under the 2005 Plan on the first day of each of the Company’s fiscal years during the period beginning in fiscal year 2006 and ending on the second day of fiscal year 2014. The annual increase in the number of shares shall be equal to the lowest of 400,000 shares; 4% of the Company’s outstanding shares on the first day of the fiscal year; and an amount determined by the Board of Directors. No adjustment to the 2005 Plan was made on January 1, 2012.

The Company also has outstanding stock options in three other stock option plans, the 1998 Omnibus Plan, the Amended and Restated Omnibus Stock Option Plan and the Amended and Restated 1990 Non-Employee Directors’ Non-Qualified Stock Option Plan. All plans have expired and no future issuance of awards is permissible.

~~Stock-based~~39 employee compensation expense recorded for the years ended December 31, 2011 and 2010 was $834 and $61,722, respectively. The $834 in stock-based compensation expense recognized during 2011 represented the remaining costs related to non-vested stock options.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock-based employee compensation expense recorded for the years ended December 31, 2012 and 2011 was $0 and $834, respectively. The $834 in stock-based compensation expense recognized during 2011 represented the remaining costs related to non-vested stock options.

We use the Black-Scholes option-pricing model to calculate the fair value of each option grant on the date of grant. No stock options were granted during the years ended December 31, 2012 and 2011.

Stock Options

The following ~~table~~ table summarizes the options issued and outstanding as of December 31, ~~2011~~2012:

	Shares			Weighted-AverageExercise Price
Outstanding stock options at the beginning of year		3,~~650~~636,~~443~~480		$	1.5955
Granted		—			—
Exercised		—			—
Forfeited and expired		(13625,~~963~~500	)		121.2075
Outstanding and exercisable stock options at year end		3,~~636~~010,~~480~~980		$	1.5551

The following table summarizes information about the stock options outstanding and exercisable as of December 31, ~~2011:~~ 2012:

Range of Exercise Prices	Number Outstanding		~~Weighed~~Weighted Average remainingContractual Life		~~Weighted AverageExercise Price~~		Weighted AverageExercise Price
$1.15 — $1.36		2,713,000	2.4 years		$	1.15
$1.15 – $1.36		2,287,500		1.4 years			$	1.15
$2.00 — $3.00		639,980	3.7 years			2.33
$2.00 – $3.00		539,980		2.7 years				2.33
$3.10 — $4.65		255,000	4.7 years			3.40
$3.10 – $4.65		155,000		4.8 years				3.17
$4.99 — $6.96		28,500	2.0 years			5.47
$4.99 – $6.96		28,500		1.0 years				5.47
		3,636,480	2.8 years		$	1.55
		3,010,980		1.8 years			$	1.51

There was no intrinsic value of outstanding options and exercisable options as of December 31, ~~2011~~2012. As of December 31, ~~2011 384~~2012, 809,172 shares were available for grant under the 2005 Plan. As of December 31, ~~2011~~2012, the Company had reserved 43,~~020~~820,~~652~~152 shares of common stock to meet its option obligation.

~~Rights~~11. ~~Agreement~~Fair Value Measurements

On September 11, 2001, the Company entered into a Rights Agreement (the “Rights Plan”) dated as of September 11, 2001, with Continental Stock Transfer & Trust Company, as rights agent (the “Rights Agent”), and declared a dividend of one right (a “Right”) to purchase from the Company one-thousandth of a share of its Series D Preferred Stock at an exercise price of $25 for each outstanding share of the Company’s common stock at the close of business on September 13, 2001. All Rights under this agreement had expired as of September 11, 2011.

10. Fair Value Measurements

The fair value hierarchy prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1: ~~Observable~~— ~~inputs~~unadjusted ~~such as~~ quoted prices ~~(unadjusted)~~ in active markets for identical securities. ;

Level 2: ~~Inputs~~— ~~other~~unadjusted ~~than~~ quoted prices ~~that may be observable for similar securities. These may include quoted prices for similar securities~~ in ~~active or~~ markets that are not active. ,

Level 3: ~~Unobservable~~— ~~inputs~~significant ~~that~~unobservable ~~reflect~~inputs, ~~the~~including ~~reporting~~our ~~entity’s~~ own assumptions in determining fair value

3540

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the financial assets that we measured at fair value as of ~~December 31,~~: ~~2011 and 2010.~~

	2011		Input Level		2010				Input Level
	December 31, 2012
Cash and money market funds	$	135,843	Level 1		$	98,514			Level 1
	Level 1		Level 2				Level 3			Total
Indemnity fund-restricted money market funds		—	Level 1			115,568			Level 1
Available for sale securities	$	838,309	$	—			$	—		$	838,309
Short-term investments		27,446	Level 2			—			Level 2
Total assets	$	838,309	$	—			$	—		$	838,309
	$	163,289			$	214,082
Contingent royalty	$	—	$	—			$	16,000,000		$	16,000,000
Total liabilities	$	—	$	—			$	16,000,000		$	16,000,000
	December 31, 2011
	Level 1		Level 2				Level 3			Total
Available for sale securities	$	—	$	27,446			$	—		$	27,446
Total assets	$	—	$	27,446			$	—		$	27,446

~~The~~As ~~Company~~of ~~did not have any non-financial assets or liabilities that were measured or disclosed at fair value for the years ended~~ December 31, ~~2011~~2012, ~~and~~the ~~2010.~~Company’s ~~No transfers occurred between~~ Level ~~1and~~1 ~~Level~~assets 2are ~~assets~~comprised ~~for~~of ~~the~~285,000 ~~years~~shares ~~ended~~of ~~December 31~~Navidea Biopharmaceuticals, ~~2011~~Inc. common ~~and 2010~~stock. ItThese isshares ~~not~~are ~~practicable~~traded toon ~~estimate~~ the ~~fair~~NYSE ~~value~~under of the ~~Company’s~~symbol ~~convertible debt~~NAVB. ~~However,~~ itAlso isincluded ~~likely~~in ~~that~~Level ~~the~~1 ~~fair~~assets ~~value~~as of ~~the~~December 31, ~~debt~~2012 ~~would~~are be39,209 ~~materially~~shares ~~less than the carrying value~~ of ~~the~~FluoroPharma ~~debt~~Medical, ~~because~~Inc. ~~the~~common ~~conversion~~stock ~~price~~which ofare ~~$2.50~~traded ison ~~higher than~~ the ~~Company’s~~OTC ~~stock~~Bulletin ~~price~~Board (“OTCBB”) ofunder ~~$0.24~~the assymbol ~~of December 31, 2011~~FPMI.

11As of December 31, 2011, the Company’s Level 2 available for sale securities consisted of 39,209 shares of FluoroPharma Medical, Inc. ~~Income~~stock. ~~Taxes~~These shares were subject to Rule 144 restrictions and traded on very thin volume in the open market. Based on those two factors the Company previously classified the shares as a Level 2 asset. As of September 30, 2012, the Company determined that the FluoroPharma Medical, Inc. common stock should be reclassified to Level 1 based on the increased liquidity of the shares due to more stable trading volume in the open market.

AsA ofcontingent ~~December 31,~~royalty ~~2011,~~liability which resulted from the ~~Company~~election ~~had~~by ~~federal~~certain ~~and~~purchasers ~~state~~of ~~net~~the ~~operating~~Company’s ~~loss~~Convertible Promissory Note Purchase Agreement (the “~~NOL~~Note Purchase Agreement”) ~~carryforwards~~to ofconvert ~~approximately $82,855,000~~a ~~and~~total of $4416,~~981,~~000,000 ~~respectively~~in ~~and~~debt ~~federal~~obligation ~~and~~into ~~Massachusetts~~a ~~state~~right ~~research~~to ~~and~~receive ~~development~~future ~~(“R&D”)~~royalties ~~credit~~on ~~carryforwards~~net sales of ~~approximately~~the $1Company’s Molecular Imaging Products. The Company obtained a third party fair value valuation for its contingent royalty liability as of December 31,~~578,000~~ ~~and~~2012. $1The fair value measurement is based on significant inputs not observable in the market,~~110,000,~~ ~~respectively~~which ~~subject~~require it to ~~limitation,~~be ~~may~~reported as a Level 3 asset within the fair value hierarchy. The valuation uses assumptions that the Company believes would be ~~available~~made by a market participant. In particular, the valuation analysis employed the Income Approach based on the sum of the economic income that an asset is anticipated to ~~offset~~produce in the future. ~~federal~~In ~~and~~this ~~state~~case that asset is the potential royalty income ~~tax~~to ~~liabilities~~be ~~through~~paid ~~2031~~to the Company by Navidea as a result of the license agreement for Altropane. The Discounted Cash Flow method of the Income Approach was chosen

Deferred tax assets consisted of the following as of December 31:	2011			2010
Net operating loss carryforward	$	31,338,000		$	31,534,000
Capitalized research and development expenses		10,402,000			12,977,000
License fees		325,000			617,000
Stock-based compensation expense		2,264,000			2,264,000
Other		737,000			2,754,000
Gross deferred tax assets		45,066,000			50,146,000
Valuation allowance		(45,066,000	)		(50,146,000	)
Net deferred tax assets	$	—		$	—

as the method best suited to valuing the contingent royalty liability. Changes in the fair value of the contingent royalty liability will be reflected in the consolidated statements of comprehensive income in the period they become known. The actual calculated fair value of the liability was $16.6 million, however, as described in Note 7 the accounting guidance does not provide for an increase in the liability in a troubled debt restructuring.

12. Income Taxes

As of December 31, 2012, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $71,662,000 and $40,373,000, respectively and federal and Massachusetts state research and

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

development (“R&D”) credit carryforwards of approximately $1,578,000 and $1,110,000, respectively subject to limitation, may be available to offset future federal and state income tax liabilities through 2031.


Deferred tax assets consisted of the following as of December 31:	2012			2011
Net operating loss carryforward	$	27,181,000		$	31,338,000
Capitalized research and development expenses		8,115,000			10,402,000
License fees		349,000			325,000
Stock-based compensation expense		2,264,000			2,264,000
Other		917,000			737,000

Gross deferred tax assets		38,826,000			45,066,000
Valuation allowance		(38,826,000	)		(45,066,000	)

Net deferred tax assets	$	—		$	—

A reconciliation of the amount of reported tax benefit and the amount computed using the U.S. federal statutory rate of 35% for the years ended December 31 is as follows:

	2011			2010
	2012			2011
(Benefit)/provision at statutory rate	$	(1,009,000	)	$	179,000
Tax benefit at statutory rate	$	(576,000	)	$	(1,009,000	)
State taxes, net of federal benefit		~~267~~251,000			32267,000
Expiring state net operating loss carryforward		~~455~~978,~~000~~454			~~178~~455,000
Gain on forgiven interest and cancellation of debt and other		2,~~567~~042,000			32,567,000
Decrease in valuation allowance		(56,~~080~~240,000	)		(~~392~~5,080,000	)
NOL attribute reduction on debt cancellation		23,~~800~~544,~~000~~545			—2,800,000
	$	—		$	—

For the years ended December 31, ~~2011~~2012 and ~~2010~~2011, the Company did not record any federal or state tax expense given its continued net operating loss position. The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets, which are comprised principally of net operating losses (“NOL”) and capitalized research and development expenditures. Management has determined that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result, a full valuation allowance has been recorded.

Income tax benefit for the years ended December 31:	~~2011~~2012			~~2010~~2011
Federal	$	(2348,~~737,000~~366	)	$	(12,~~560~~737,000	)
State		(~~645~~82,~~000~~115	)		(~~389~~645,000	)
		(3,382,000	)		(1,949,000	)
		(430,481	)		(1,949,000	)
Valuation allowance		3430,~~382,000~~481			1,949,000
	$	—		$	—

3642

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation of the unrecognized tax benefits recorded for the years ended December 31 is as follows:

	2011		2010
	2012		2011
Balance at January 1	$	2,822,531	$	2,~~798~~822,~~199~~531
Additions based on tax positions related to the current year		—		~~24,332~~—
Balance at December 31	$	2,822,531	$	2,822,531

The balance of unrecognized tax benefits as of December 31, ~~2011~~2012 of approximately $2,822,531 are tax benefits that, if recognized, would not affect the Company’s effective tax rate since they are subject to a full valuation allowance.

The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company has no accrual for interest and penalties as of December 31, ~~2011~~2012.

The Company is subject to both federal and state income tax for the jurisdiction within which it operates. Within these jurisdictions, the Company is open to examination for tax years ended December 31, 2009 through December 31, ~~2011~~2012. The U.S. Internal Revenue Service (IRS) had completed an audit of tax years 2007 and 2008 and had informed us that no adjustments to the federal tax returns as filed would be proposed as a result of the audit. However, because we are carrying forward income tax attributes such as the NOL from 2006, these attributes can still be audited when utilized on returns filed in the future.

1213. Commitments and Contingencies

The Company’s ~~corporate office lease expired on September 30, 2011. The Company~~ is currently a tenant at will occupying approximately 4,500 square feet of office space. ~~The~~Total ~~Company’s~~rent ~~former~~expense ~~corporate office lease~~ was approximately ~~subleased~~$71,500 and ~~scheduled~~$220,000 tofor ~~expire~~the inyears ~~May~~ended December 31, 2012 and 2011, ~~but~~respectively ~~was~~and ~~terminated~~approximately ~~early~~$4115,500 infor ~~May~~the ~~2011~~period from inception (~~Note~~October 16, 81992) through December 31, 2012. The Company received approximately $102,000 for the year ended December 31, 2011, related to the sublease of the premises and no income from subleasing in 2012.

~~Total~~On ~~rent expense was approximately $220~~March 13,~~000~~ ~~and~~2012 ~~$270,000 for~~ the ~~years~~Company ~~ended~~received ~~December 31,~~notice ~~2011~~that ~~and~~Children’s ~~2010,~~Hospital ~~respectively~~Boston and ~~approximately~~Children’s ~~$4,044,000 for~~Medical ~~the~~Center ~~period~~Corporation ~~from~~had ~~inception~~filed ~~(October 16,~~a ~~1992) through~~lawsuit ~~December 31,~~in ~~2011.~~Middlesex ~~The~~Superior ~~Company received approximately $102~~Court,~~000~~ ~~and~~Middlesex ~~$244~~County,~~000~~ Massachusetts ~~for~~seeking ~~the~~to ~~years~~recover ~~ended~~amounts ~~December 31,~~alleged ~~2011~~to ~~and~~be ~~2010,~~owed ~~respectively,~~by ~~related to~~ the ~~sublease~~Company ofto the ~~premises~~ plaintiffs.

On ~~March~~February 131, ~~2012~~2013 the Company ~~received~~entered into ~~notice~~a ~~that~~Settlement Agreement and Release with Boston Children’s Hospital ~~Boston~~(BCH) and Children’s Medical Center Corporation ~~had~~(CMCC) ~~filed~~in afull ~~lawsuit~~settlement inof ~~Middlesex~~the ~~Superior~~lawsuit ~~Court,~~filed ~~Middlesex~~by ~~County,~~BCH ~~Massachusetts~~and CMCC seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $642,906 plus costs. The ~~Company~~amount ~~does~~of ~~not~~$642,906 ~~agree~~is ~~that~~included ~~the total amounts claimed~~ in ~~the~~accrued ~~lawsuit~~expenses ~~are~~at inDecember ~~fact~~31, ~~owed~~2012 and ~~will~~2011, ~~pursue~~but ~~all~~was ~~legal~~incurred ~~remedies~~and ~~available~~expensed toprior it to ~~defend~~January ~~this~~1, ~~claim~~2011.

~~License~~In ~~Agreements~~settlement of all claims by BCH and CMCC, the Company agreed to pay a lump sum of One Hundred Eighty five Thousand dollars ($185,000) to the plaintiffs. In addition to the lump sum payment, the Company agreed to pay to the plaintiffs an additional sum equal to the then cash value of 20,000 shares of the common stock of Navidea BioPharmaceuticals, Inc. upon the occurrence of the first milestone described in Section 4.2 of the sublicense agreement dated as of July 31, 2012 between Navidea BioPharmaceuticals, Inc. and the Company. This second payment is only due upon the occurrence of the first milestone unless the Company declares bankruptcy or alters its agreement with Navidea in a manner that results in the delay or cancellation of said milestone payment.

~~The~~43 Company has entered into license agreements (the “Harvard License Agreements”) with Harvard University and its affiliated hospitals (“Harvard and its Affiliates”) to acquire the exclusive worldwide rights to certain technologies within its molecular imaging and neurodegenerative disease programs. The Harvard License Agreements obligate the Company to pay up to an aggregate of approximately $850,000 in milestone payments in the future. The future milestone payments are generally payable only upon achievement of certain regulatory milestones. The Company’s license agreements with Harvard and its Affiliates generally provide for royalty payments equal to specified percentages of product sales, annual license maintenance fees and continuing patent prosecution costs.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Guarantor Arrangements

The Company has entered into agreements to indemnify its executive officers and directors for certain events or occurrences while the officer or director is, or was serving, at the Company’s request in such capacity. The indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits the Company’s exposure and enables the Company to recover a portion of any future amounts paid. As a result of the Company’s insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal.

S14. ~~David~~Related ~~Hillson~~Party ~~our~~Transactions former Chairman of the Board and Chief Executive Officer requested that the Company create an indemnity trust for his benefit and fund the trust in the amount of $100,000. On June 15, 2004, the Company entered into a directors and officers indemnity trust agreement with Mr. Hillson and Boston Private Bank & Trust Company, as trustee (the “Indemnity Trust Agreement”), and funded the trust with $100,000. In December 2011, Mr. Hillson signed a blanket release of the indemnity trust funds. As of December 31, 2011 those funds have been reclassified to cash and cash equivalents in the Consolidated Balance Sheet.

~~The~~During ~~Company~~the ~~enters~~last ~~into~~4 ~~arrangements~~months ~~with~~of ~~service providers to perform research~~2012, ~~development,~~Robert ~~and~~Gipson ~~clinical services.~~provided ~~The~~a ~~Company~~total ~~enters~~of ~~into standard indemnification agreements with those service providers~~$325,000 ~~whereby~~to the Company ~~indemnifies~~as ~~them~~an ~~for~~advance ~~any~~against ~~liability~~his ~~associated~~planned ~~with~~purchase of ~~their~~stock ~~use~~in ofAlseres ~~the~~Neurodiagnostics, ~~Company’s technologies~~Inc. ~~The~~to ~~maximum~~occur ~~potential~~in ~~amount~~2013. ~~of future~~These ~~payments~~funds ~~the~~were ~~Company~~available ~~would be required~~ to ~~make under these indemnification agreements is unlimited; however,~~ the Company ~~has~~for ~~product~~use ~~liability~~during 2012 and ~~general liability policies that enable~~ the ~~Company~~advance tois ~~recover~~reflected aas ~~portion~~advances offrom ~~any~~related ~~amounts~~parties ~~paid.~~on ~~As a result of~~ the ~~Company’s~~consolidated ~~insurance~~balance ~~policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal~~sheet.

37Additional Related Party Transactions during 2012 are disclosed in footnotes 8 and 10.

15. Subsequent Events

Settlement Agreement and Release with Boston Children’s Hospital (BCH) and Children’s Medical Center Corporation (CMCC)

In settlement of all claims by BCH and CMCC, the Company agreed to pay a lump sum of One Hundred Eighty five Thousand dollars $185,000 to the plaintiffs. In addition to the lump sum payment, the Company agreed to pay to the plaintiffs an additional sum equal to the then cash value of 20,000 shares of the common stock of Navidea BioPharmaceuticals, Inc. upon the occurrence of the first milestone described in Section 4.2 of the sublicense agreement dated as of July 31, 2012 between Navidea BioPharmaceuticals, Inc. and the Company. This second payment is only due upon the occurrence of the first milestone unless the Company declares bankruptcy or alters its agreement with Navidea in a manner that results in the delay or cancellation of said milestone payment in which case CMCC and BCH could bring additional claims against the Company for additional consideration.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage ~~Enterprise~~Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~13.~~Settlement ~~Related~~with ~~Party~~Board ~~Transactions~~of Directors

InOn ~~July~~February 15, ~~2011~~2013, Alseres Pharmaceuticals, Inc. (the “Company”), entered into Settlement Agreements with Michael Mullen and William Guinness, ~~our~~both ~~current~~members ~~board~~of ~~members,~~the ~~signed~~Board ~~settlement~~of ~~agreements~~Directors of the Company pursuant to ~~resolve~~which ~~unpaid~~the ~~fees~~Company ~~due~~agreed to ~~them~~ ~~for~~satisfy ~~services~~certain ~~rendered~~outstanding ~~during~~obligations ~~the~~to ~~period~~these ofindividuals ~~July~~which, ~~2008~~in ~~through~~aggregate, ~~January 31~~totaled $220,734 ~~2010.~~by Asissuing fully vested options to purchase a total of 167,400 shares of the ~~settlement~~common ~~date,~~stock ~~approximately~~of Alseres ~~$172~~Neurodiagnostics,~~000~~ ~~had~~Inc. ~~been~~(a ~~accrued~~subsidiary ~~for~~of ~~directors~~the ~~fees~~Company) ~~owed~~out at a purchase price to be established by the ~~two~~Company ~~board~~coincident ~~members~~with ~~who~~the ~~agreed~~closing toof aan ~~reduced~~equity ~~payment~~financing ~~totaling $22~~for Alseres Neurodiagnostics,~~400~~ Inc. AsThe aoptions ~~result~~must ofbe ~~these~~exercised, ~~transactions~~if ~~approximately~~at ~~$149~~all,~~000~~ ~~was~~in whole ~~recognized~~or asin ~~forgiveness~~part, on or before February 28, 2018. The common stock of ~~debt~~Alseres Neurodiagnostics, Inc. to be issued pursuant to the options will bear all appropriate restrictive legends regarding disposition or resale of the common stock.

~~The~~45 ~~following table summarizes the convertible notes payable due related parties as of December 31, 2011:~~

	Note Date	Principal Balance
Thomas Gipson - (interest rate of 5%; due December 31, 2010)	March 23, 2007	$	1,655,173
Arthur Koenig - (interest rate of 5%; due December 31, 2010)	March 23, 2007		3,000,000
Ingalls & Synder Value Partners - (interest rate of 5%; due December 31, 2010)	August 14, 2007		10,000,000
Thomas Gipson - (interest rate of 5%; due December 31, 2010)	March 20, 2008		2,172,415
Robert L. Gipson - (interest rate of 5%; due December 31, 2010)	June 25, 2008		5,000,000
Aggregate carrying value		$	21,827,588

In December 2011 the Company entered into the Fifth Amendment to Convertible Note Purchase Agreement (“Amendment”) with the Purchasers of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in March, 2007. The Amendment provided that each Purchaser would waive their respective right to be paid any and all interest accrued or to be accrued pursuant to the promissory notes issued under the Note Purchase Agreement. This transaction resulted in a reduction of $6,132,499 in accrued interest expense. The Amendment further provided that two of the Purchasers would convert a portion of the amounts owed to them into common stock of the Company at $2.50 per share as provided in the Note Purchase Agreement. Robert Gipson converted $5,827,585 of debt into 2,331,034 shares of common stock and Thomas Gipson converted $1,344,827 of debt into 537,931 shares of common shares. As a result of this transaction, $28,690 was recorded to the common stock account and $7,143,722 was recorded to additional paid-in-capital a component of Stockholders’ deficit.

The following table summarizes the notes payable due Robert Gipson as of December 31, 2011:

	Principal Balance
Unsecured demand note payable; interest rate of 7%: issued December 2009	$	350,000
Unsecured demand notes payable; interest rate of 7%: issued January 2010 - December 2010		3,310,000
Unsecured demand notes payable; interest rate of 7%: issued January 2011 - December 2011		2,240,000
Aggregate carrying value	$	5,900,000

In November 2011, the Company purchased from Robert L. Gipson (the “Holder”) an unsecured promissory note, pursuant to which the Company’s wholly owned subsidiary, Neurobiologics Inc., had borrowed an aggregate principal amount of $1,000,000 (“the Note”) dated February 11, 2009. At the time of the purchase, $195,807 of interest had accrued on the Note. The purchase price for the Note and all accrued interest was $1,000.

The Company considered the guidance offered under Accounting Standards Codification ASC 470-50-40-2 and ASC 470-50-40-3, “Debt – Modifications and Extinguishments – Derecognition”. The Company determined that the extinguishment of the debt more closely represented a capital transaction. The $195,807 in forgiven accrued interest and the gain of $999,000 due to the difference between the purchase price of $1,000 and the carrying value of the extinguished debt of $1,000,000 occurred in a transaction with a related party and was therefore classified as a capital transaction and recorded to additional paid-in capital a component of stockholders’ deficit.

ALSERES PHARMACEUTICALS, INC.

(A Development Stage Enterprise)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Convertible Preferred Stock transactions

In 2009 the Company issued a total of 196,000 shares of Series F convertible preferred stock to Robert Gipson and received gross proceeds of $4,900,000. On June 1, 2011 the Company issued to Robert L. Gipson 4,600,000 shares of its common stock in exchange for the conversion by Mr. Gipson of 184,000 shares of the Company’s Series F Convertible, Redeemable Preferred Stock (“Series F Stock”). Each share of the Series F Stock was converted into 25 shares of common stock pursuant to the conversion terms of the Series F Stock contained in the Certificate of Designation for the Series F Stock. The cumulative accrued interest at the date of conversion of $640,874 was reclassified to additional paid-in capital since the shares were no longer redeemable. As of December 31, 2011 there remained 12,000 shares of Series F Stock outstanding and held by Mr. Gipson.

Common Stock transactions

On December 16, 2011 the Company purchased at $0.01 per share, 60,000 shares from Robert Gipson, 530,000 shares from Thomas Gipson, 100,000 shares from Ingalls and Snyder Value Partners and 50,000 shares from Arthur Koenig. The closing price for the Company’s stock on December 16th was $0.14 per share. The price per share paid by the Company to these sellers represented a 93% discount to the market price for the shares.

In December 2011 the Company entered into the Fifth Amendment to Convertible Note Purchase Agreement (“Amendment”) with the Purchasers of convertible promissory notes of the Company purchased pursuant to a Promissory Note Purchase Agreement executed in March, 2007. The Amendment provided that each Purchaser would waive their respective right to be paid any and all interest accrued or to be accrued pursuant to the promissory notes issued under the Note Purchase Agreement. This transaction resulted in a reduction of $6,132,499 in accrued interest expense. The Amendment further provided that two of the Purchasers would convert a portion of the amounts owed to them into common stock of the Company at $2.50 per share as provided in the Note Purchase Agreement. Robert Gipson converted $5,827,585 of debt into 2,331,034 shares of common stock and Thomas Gipson converted $1,344,827 of debt into 537,931 shares of common shares. As a result of this transaction, $28,690 was recorded to the common stock account and $7,143,722 was recorded to additional paid-in-capital a component of Stockholders’ deficit.

On December 27, 2011 the Company agreed to purchase 2,331,034 shares of common stock held by Robert Gipson and 537,931 shares of common stock held by Thomas Gipson at a purchase price per share of $0.0025 for a total of $7,172. The closing price for the Company’s stock on December 27th was $0.20 per share. The price per share paid by the Company to the sellers represented a 99% discount to the market price for the shares. The 2,868,965 shares of common stock the Company repurchased were retired under the constructive retirement method. This method was determined to be appropriate as management does not intend to reissue the shares within a reasonable period of time.

In December 2010, the Company had purchased 270,000 common shares from Robert Gipson at $.03 per share for a total of $8,125. The closing price for the Company’s stock on December 28 was $0.15 per share. The price per share paid by the Company to Mr. Gipson represented an 80% discount to the market price for the shares. The 270,000 shares of common stock the Company repurchased were retired under the constructive retirement method. This method was determined to be appropriate as management did not intend to reissue the shares within a reasonable period of time.

14. Employee Benefit Plan

The company maintains a 401(k) savings plan (the “Plan”) but discontinued the employer matching provision in the first quarter of 2009.

15. Subsequent Events

On January 19, 2012 the Company entered into an Option Agreement with Navidea Biopharmaceuticals, Inc., to license [123I]-E-IAFCT Injection (also referred to as Altropane), an Iodine-123 radio labeled imaging agent, being developed as an aid in the diagnosis of Parkinson’s disease and movement disorders. The option agreement provides Navidea with a 6 month period during which it has exclusive rights to license the asset and complete further diligence and the definitive license for [123I]-E-IACFT. Under the terms of the option agreement, Navidea paid Alseres an option fee of $500,000 upon signing the agreement. Navidea can extend the option period from June 30, 2012 to July 31, 2012, for an additional $250,000. If executed, the terms outlined in the option agreement call for contingent late-stage cash milestone payments totaling $3.0 million and up to 1.45 million shares of Navidea stock. In addition, the license terms outlined in the option agreement also call for royalties on net sales of the approved product which are consistent with industry-standard terms.

On March 13, 2012 the Company received notice that Children’s Hospital Boston and Children’s Medical Center Corporation had filed a lawsuit in Middlesex Superior Court, Middlesex County, Massachusetts seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $642,906. The Company does not agree that the total amounts claimed in the lawsuit are in fact owed and will pursue all legal remedies available to it to defend this claim.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the under signed, thereunto duly authorized this ~~29th~~1st day of ~~March~~April, ~~2012~~2013.

ALSERES PHARMACEUTICALS , INC . By: /S/ PETER G. SAVAS Peter G. Savas Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/S/ PETER G. SAVAS	Chairman and Chief Executive Officer (Principal Executive Officer)	March 29, 2012
/S/ PETER G. SAVAS Peter G. Savas	Chairman and Chief Executive Officer (Principal Executive Officer)	April 1, 2013
Peter G. Savas
/S/ KENNETH L. RICE , JR. Kenneth L. Rice, Jr.	Executive Vice President Finance and Administration and Chief Financial Officer (Principal Financial and Accounting Officer)	April 1, 2013
/S/ KENNETH L. RICE, JR.	Executive Vice President Finance and	March 29, 2012
/S/ WILLIAM L.S. GUINNESS William L.S. Guinness	Director	April 1, 2013
Kenneth L. Rice, Jr.	Administration and Chief Financial Officer (Principal Financial and Accounting Officer)
/S/ MICHAEL J. MULLEN Michael J. Mullen	Director	April 1, 2013
/S/ WILLIAM L.S. GUINNESS	Director	March 29, 2012
William L.S. Guinness
/S/ MICHAEL J. MULLEN	Director	March 29, 2012
Michael J. Mullen

4046

EXHIBIT INDEX

Incorporated by Reference to

Exhibit Number

Description

Form

ExhibitNumber

Filing Date

SEC FileNumber

Articles of Incorporation and By-laws

3.1

Amended and Restated Certificate of Incorporation, dated March 28, 1996

10-K/A for12/31/1998

3.1

3/19/1999

~~000-6533~~

000-6533

3.2

Certificate of Amendment of Certificate of Incorporation, dated June 6, 1997

10-K/A for12/31/1998

3.1

3/19/1999

~~000-6533~~

000-6533

3.3

Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated June 28, 1999

10-Q for9/30/1999

3.5

11/15/1999

~~000-6533~~

000-6533

3.4

Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated June 14, 2000

10-K for12/31/2000

3.3

3/29/2001

~~000-6533~~

000-6533

3.5

Certificate of Correction to the Amended and Restated Certificate of Incorporation, dated March 14, 2001

10-K for12/31/2000

3.3

3/29/2001

~~000-6533~~

000-6533

3.6

Form of Certificate of Amendment of Amended and Restated Certificate of Incorporation dated June 11, 2002

ProxyStatement

App. A

5/1/2002

~~000-6533~~

000-6533

3.7

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, dated as of July 9, 2003

10-Q for6/30/2003

3.1

8/13/2003

~~000-6533~~

000-6533

3.8

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, dated as of August 5, 2004

10-Q for6/30/2004

3.1

8/13/2004

~~000-6533~~

000-6533

3.9

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, dated as of February 4, 2005

8-K

3.1

2/7/2005

~~000-6533~~

000-6533

3.10

Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company, dated as of June 7, 2007

8-K

3.1

6/8/2007

~~000-6533~~

000-6533

3.11

Amended and Restated By-Laws, effective as of December 6, 2007

8-K

3.1

12/7/2007

~~000-6533~~

000-6533

Instruments Defining the Rights of Security Holders

4.1

Specimen certificate evidencing shares of common stock, par value $.01 per share

10-Q for6/30/2007

4.1

8/14/2007

~~000-6533~~

000-6533

series D

4.2

Restated Certificate of Designations, Preferences, and Rights of Series D Preferred Stock

8-A/A

Ex. A to3.3

9/13/2001

~~000-6533~~

000-6533

series F

4.3

Certificate of Designations, Preferences, and Rights of Series F Convertible Preferred Stock

8-K

4.1

3/25/2009

~~000-6533~~

000-6533

Rights Agreement

4.4

Rights Agreement, dated as of September 11, 2001, including the form of Certificate of Designation with Respect to the Series D Preferred Stock and the form of Rights Certificate, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (the “Rights Agreement”)

8-A/A

9/13/2001

000-6533

4147

		Incorporated by Reference to
Exhibit Number	Description	Form	ExhibitNumber	Filing Date	SEC FileNumber
4.5	Amendment No. 1 to the Rights Agreement, dated November 13, 2001	8-A/A	2	11/25/2002	000-6533
Rights Agreement
4.6	Amendment No. 2 to the Rights Agreement, dated November 22, 2002	8-A/A	3	11/25/2002	000-6533
4.4	Rights Agreement, dated as of September 11, 2001, including the form of Certificate of Designation with Respect to the Series D Preferred Stock and the form of Rights Certificate, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (the “Rights Agreement”)	8-A/A	1	9/13/2001		000-6533
4.7	Amendment No. 3 to the Rights Agreement, dated March 12, 2003	8-K	99.6	3/13/2003	000-6533
4.5	Amendment No. 1 to the Rights Agreement, dated November 13, 2001	8-A/A	2	11/25/2002		000-6533
4.8	Amendment No. 4 to the Rights Agreement, dated December 23, 2003	8-A/A	5	12/29/2003	000-6533
4.6	Amendment No. 2 to the Rights Agreement, dated November 22, 2002	8-A/A	3	11/25/2002		000-6533
4.9	Amendment No. 5 to the Rights Agreement, dated March 14, 2005	8-K	4.1	3/15/2005	000-6533
4.7	Amendment No. 3 to the Rights Agreement, dated March 12, 2003	8-K	99.6	3/13/2003		000-6533
Miscellaneous
4.8	Amendment No. 4 to the Rights Agreement, dated December 23, 2003	8-A/A	5	12/29/2003		000-6533
4.10	Form of Warrant issued by the Company under the Securities Purchase Agreement dated November 20, 2008	8-K	10.2	11/25/2008	000-6533
4.9	Amendment No. 5 to the Rights Agreement, dated March 14, 2005	8-K	4.1	3/15/2005		000-6533
4.11	Promissory Note dated February 11, 2009 issued by Neurobiologics, Inc. to Robert L. Gipson	8-K	10.1	2/18/2009	000-6533
Miscellaneous
Ingalls
4.10	Form of Warrant issued by the Company under the Securities Purchase Agreement dated November 20, 2008	8-K	10.2	11/25/2008		000-6533
4.12	Amended and Restated Registration Rights Agreement, dated as of March 9, 2005, by and among the Company and Ingalls, Robert L. Gipson and Nickolaos D. Monoyios and other Investors	10-K for12/31/2004	10.42	3/31/2005	000-6533
4.11	Promissory Note dated February 11, 2009 issued by Neurobiologics, Inc. to Robert L. Gipson	8-K	10.1	2/18/2009		000-6533
4.13	Amendment No. 1, dated August 30, 2005, to the Amended and Restated Registration Rights Agreement, dated as of March 9, 2005, by and among the Company and Ingalls, Robert L. Gipson and Nickolaos D. Monoyios and other Investors	10-Q for9/30/2005	10.6	11/14/2005	000-6533
Ingalls
4.14	Common Stock Purchase Agreement, dated March 9, 2005, by and among the Company, Ingalls and other Investors	10-K for12/31/2004	10.41	3/31/2005	000-6533
4.12	Amended and Restated Registration Rights Agreement, dated as of March 9, 2005, by and among the Company and Ingalls, Robert L. Gipson and Nickolaos D. Monoyios and other Investors	10-K for12/31/2004	10.42	3/31/2005		000-6533
4.15	Common Stock Purchase Agreement, dated August 30, 2005, by and among the Company, Ingalls and other Investors	10-Q for9/30/2005	10.5	11/14/2005	000-6533
4.13	Amendment No. 1, dated August 30, 2005, to the Amended and Restated Registration Rights Agreement, dated as of March 9, 2005, by and among the Company and Ingalls, Robert L. Gipson and Nickolaos D. Monoyios and other Investors	10-Q for9/30/2005	10.6	11/14/2005		000-6533
4.16	Mutual Release of Claims, dated as of June 15, 2004, by and among the Company, S. David Hillson, Marc E. Lanser, Robert L. Gipson, Thomas O. Boucher, Jr., Ingalls & Snyder, LLC and Ingalls	8-K	99.3	6/17/2004	000-6533
4.14	Common Stock Purchase Agreement, dated March 9, 2005, by and among the Company, Ingalls and other Investors	10-K for12/31/2004	10.41	3/31/2005		000-6533
Material Contracts — Supply, License, Distribution
4.15	Common Stock Purchase Agreement, dated August 30, 2005, by and among the Company, Ingalls and other Investors	10-Q for9/30/2005	10.5	11/14/2005		000-6533
CMCC
4.16	Mutual Release of Claims, dated as of June 15, 2004, by and among the Company, S. David Hillson, Marc E. Lanser, Robert L. Gipson, Thomas O. Boucher, Jr., Ingalls & Snyder, LLC and Ingalls	8-K	99.3	6/17/2004		000-6533
10.1+	License Agreement between CMCC and the Company dated as of May 10, 2006 (Dr. Larry Benowitz) (relating to INOSINE)	10-Q for6/30/2006	10.1	8/14/2006	000-6533
10.2+	License Agreement between CMCC and the Company dated as of May 10, 2006 (Dr. Zhigang He) (relating to Oncomodulin)	10-Q for6/30/2006	10.2	8/14/2006	000-6533

4248

Incorporated by Reference to

Exhibit Number

Description

Form

ExhibitNumber

Filing Date

SEC FileNumber

Harvard

Material Contracts — Supply, License, Distribution

10.3

License Agreement between President and Fellows of Harvard College (“Harvard”) and NeuroBiologics, Inc. (a subsidiary of the Company) dated as of December 10, 1993 (relating to ALTROPANE)

S-4

10.16

4/12/1995

333-91106

CMCC

10.4

Amendment, dated May 7, 2004, to License Agreement between Harvard and the Company dated as of December 10, 1993 (relating to ALTROPANE)

10-Q for6/30/2005

10.6

8/15/2005

000-6533

10.1+

License Agreement between CMCC and the Company dated as of May 10, 2006 (Dr. Larry Benowitz) (relating to INOSINE)

10-Q for6/30/2006

10.1

8/14/2006

000-6533

10.5

License Agreement between Harvard and the Company dated as of March 15, 2000 (relating to ALTROPANE)

S-3/A

10.11

9/3/2002

333-88726

10.2+

License Agreement between CMCC and the Company dated as of May 10, 2006 (Dr. Zhigang He) (relating to Oncomodulin)

10-Q for6/30/2006

10.2

8/14/2006

000-6533

10.6

Amendment, dated May 11, 2004, to License Agreement between Harvard and the Company dated as of March 15, 2000 (relating to ALTROPANE)

10-Q for6/30/2005

10.4

8/15/2005

000-6533

Harvard

10.7

License Agreement, effective as of October 15, 1996, between Harvard and the Company; as amended on August 22, 2001 and on May 4, 2004 (relating to FLUORATEC)

10-Q for9/30/2005

10.8

11/14/2005

000-6533

10.3

License Agreement between President and Fellows of Harvard College (“Harvard”) and NeuroBiologics, Inc. (a subsidiary of the Company) dated as of December 10, 1993 (relating to ALTROPANE)

S-4

10.16

4/12/1995

333-91106

10.8

Third Amendment, dated April 1, 2007, to License Agreement between Harvard and the Company dated as of October 15, 1996, as amended on August 22, 2001 and on May 4, 2004 (relating to FLUORATEC)

10-Q for3/31/2007

10.2

5/15/2007

000-6533

10.4

Amendment, dated May 7, 2004, to License Agreement between Harvard and the Company dated as of December 10, 1993 (relating to ALTROPANE)

10-Q for6/30/2005

10.6

8/15/2005

000-6533

Nordion

10.5

License Agreement between Harvard and the Company dated as of March 15, 2000 (relating to ALTROPANE)

S-3/A

10.11

9/3/2002

333-88726

10.9+

Manufacturing Agreement dated August 9, 2000 between the Company and MDS Nordion, Inc. (“Nordion Agreement”)

10-K for12/31/2001

10.15

3/29/2002

000-6533

10.6

Amendment, dated May 11, 2004, to License Agreement between Harvard and the Company dated as of March 15, 2000 (relating to ALTROPANE)

10-Q for6/30/2005

10.4

8/15/2005

000-6533

10.10+

Amendment dated August 23, 2001 to Nordion Agreement

10-K for12/31/2001

10.16

3/29/2002

000-6533

10.7

License Agreement, effective as of October 15, 1996, between Harvard and the Company; as amended on August 22, 2001 and on May 4, 2004 (relating to FLUORATEC)

10-Q for9/30/2005

10.8

11/14/2005

000-6533

10.11

Amendment No. 2 dated as of September 18, 2002 to Nordion Agreement

10-K for12/31/2002

10.16

3/31/2003

000-6533

10.8

Third Amendment, dated April 1, 2007, to License Agreement between Harvard and the Company dated as of October 15, 1996, as amended on August 22, 2001 and on May 4, 2004 (relating to FLUORATEC)

10-Q for3/31/2007

10.2

5/15/2007

000-6533

10.12

Amendment No. 3 dated as of November 22, 2003 to Nordion Agreement

10-K for12/31/2003

10.17

3/30/2004

000-6533

Nordion

10.13+

Amendment No. 4 dated as of December 22, 2004 to Nordion Agreement

10-K for12/31/2004

10.48

3/31/2005

000-6533

10.9+

Manufacturing Agreement dated August 9, 2000 between the Company and MDS Nordion, Inc. (“Nordion Agreement”)

10-K for12/31/2001

10.15

3/29/2002

000-6533

10.14+

Amendment No. 5 dated as of January 24, 2005 to Nordion Agreement

10-K for12/31/2004

10.48

3/31/2005

000-6533

10.10+

Amendment dated August 23, 2001 to Nordion Agreement

10-K for12/31/2001

10.16

3/29/2002

000-6533

10.15+

Amendment No. 6 dated as of December 19, 2005 to Nordion Agreement

8-K

99.1

12/19/2005

000-6533

10.11

Amendment No. 2 dated as of September 18, 2002 to Nordion Agreement

10-K for12/31/2002

10.16

3/31/2003

000-6533

10.16+

Amendment No. 7 dated as of December 7, 2006 to Nordion Agreement

8-K

10.1

12/8/2006

000-6533

10.17+

Amendment No. 8 dated as of December 4, 2007 to Nordion Agreement

8-K

10.1

12/7/2007

000-6533

10.18+

Amendment No. 9 dated as of December 3, 2008 to Nordion Agreement

8-K

10.1

12/8/2008

000-6533

4349

		Incorporated by Reference to
Exhibit Number	Description	Form	ExhibitNumber	Filing Date	SEC FileNumber
10.19+	Amendment No. 10 dated as of January 4, 2010 to Nordion Agreement	10-K for12/31/2009	10.19	3/31/2010	000-6533
10.12	Amendment No. 3 dated as of November 22, 2003 to Nordion Agreement	10-K for12/31/2003	10.17	3/30/2004		000-6533
Organix
10.13+	Amendment No. 4 dated as of December 22, 2004 to Nordion Agreement	10-K for12/31/2004	10.48	3/31/2005		000-6533
10.20	License Agreement, effective as of July 1, 2000, between Organix, Inc. and the Company (“Organix Agreement”) (relating to 0-1369)	10-Q for9/30/2005	10.7	11/14/2005	000-6533
10.14+	Amendment No. 5 dated as of January 24, 2005 to Nordion Agreement	10-K for12/31/2004	10.48	3/31/2005		000-6533
10.21	Amendment, dated May 11, 2004, to Organix Agreement (relating to 0-1369)	10-Q for9/30/2005	10.7	11/14/2005	000-6533
10.15+	Amendment No. 6 dated as of December 19, 2005 to Nordion Agreement	8-K	99.1	12/19/2005		000-6533
10.22	Second Amendment, dated April 1, 2007, to Organix Agreement (relating to 0-1369)	10-Q for3/31/2007	10.3	5/15/2007	000-6533
10.16+	Amendment No. 7 dated as of December 7, 2006 to Nordion Agreement	8-K	10.1	12/8/2006		000-6533
BioAxone
10.17+	Amendment No. 8 dated as of December 4, 2007 to Nordion Agreement	8-K	10.1	12/7/2007		000-6533
10.23+	License Agreement, dated December 28, 2006, by and between the Company and BioAxone Therapeutic Inc. (“BioAxone Agreement) (relating to CETHRIN)	8-K	10.1	1/4/2007	000-6533
10.18+	Amendment No. 9 dated as of December 3, 2008 to Nordion Agreement	8-K	10.1	12/8/2008		000-6533
10.24+	First Amendment, dated March 23, 2007, to BioAxone Agreement (relating to CETHRIN)	10-Q for3/31/2007	10.1	5/15/2007	000-6533
10.19+	Amendment No. 10 dated as of January 4, 2010 to Nordion Agreement	10-K for12/31/2009	10.19	3/31/2010		000-6533
10.25	Amendment to BioAxone License Agreement dated as of April 23, 2009	10-K for12/31/2009	10.25	3/31/2010	000-6533
Organix
Material Contracts — Leases
10.20	License Agreement, effective as of July 1, 2000, between Organix, Inc. and the Company (“Organix Agreement”) (relating to 0-1369)	10-Q for9/30/2005	10.7	11/14/2005		000-6533
10.24	Lease Agreement, dated as of January 28, 2002, between the Company and Brentwood Properties, Inc. (“Brentwood”)	10-K for12/31/2004	10.47	3/31/2005	000-6533
10.21	Amendment, dated May 11, 2004, to Organix Agreement (relating to 0-1369)	10-Q for9/30/2005	10.7	11/14/2005		000-6533
10.25	Amendment of Lease, dated September 9, 2005, by and between Brentwood and the Company	10-Q for9/30/2005	10.1	11/14/2005	000-6533
10.22	Second Amendment, dated April 1, 2007, to Organix Agreement (relating to 0-1369)	10-Q for3/31/2007	10.3	5/15/2007		000-6533
10.26	Lease Agreement, dated as of June 9, 2005, by and between Straly Corporation and the Company	10-Q for6/30/2005	10.3	8/15/2005	000-6533
BioAxone
10.27	Sublease, dated September 9, 2005, by and between Small Army, Inc. and the Company	10-Q for9/30/2005	10.2	11/14/2005	000-6533
10.23+	License Agreement, dated December 28, 2006, by and between the Company and BioAxone Therapeutic Inc. (“BioAxone Agreement) (relating to CETHRIN)	8-K	10.1	1/4/2007		000-6533
10.28	Sublease, dated September 9, 2005, by and between Dell Mitchell Architects, Inc. and the Company	10-Q for9/30/2005	10.3	11/14/2005	000-6533
10.24+	First Amendment, dated March 23, 2007, to BioAxone Agreement (relating to CETHRIN)	10-Q for3/31/2007	10.1	5/15/2007		000-6533
Material Contracts — Stock Purchase, Financing and Credit Agreements
10.25	Amendment to BioAxone License Agreement dated as of April 23, 2009	10-K for12/31/2009	10.25	3/31/2010		000-6533
10.29	Third Amended and Restated Convertible Promissory Note Purchase Agreement (unsecured), dated March 18, 2008 by and among the Company and the purchasers listed therein	8-K	10.1	3/20/2008	000-6533
Material Contracts — Leases
10.30	Convertible Promissory Note Purchase Agreement (unsecured) dated June 25, 2008, by and between the Company and Robert L. Gipson	8-K	10.1	6/30/2008	000-6533
10.24	Lease Agreement, dated as of January 28, 2002, between the Company and Brentwood Properties, Inc. (“Brentwood”)	10-K for12/31/2004	10.47	3/31/2005		000-6533
10.31	Securities Purchase Agreement, dated November 20, 2008, by and between the Company and Robert L. Gipson	8-K	10.1	11/25/2008	000-6533
10.25	Amendment of Lease, dated September 9, 2005, by and between Brentwood and the Company	10-Q for9/30/2005	10.1	11/14/2005		000-6533
10.32	Letter Agreement, dated November 20, 2008, by and between the Company and Robert L. Gipson	8-K	10.3	11/25/2008	000-6533
10.26	Lease Agreement, dated as of June 9, 2005, by and between Straly Corporation and the Company	10-Q for6/30/2005	10.3	8/15/2005		000-6533
10.33	Securities Purchase Agreement, dated January 8, 2009, by and between the Company and Robert L. Gipson	10-K for12/31/2009	10.33	3/31/2010	000-6533

4450

		Incorporated by Reference to
Exhibit Number	Description	Form	ExhibitNumber	Filing Date	SEC FileNumber
10.34	Securities Purchase Agreement, dated February 24, 2009, by and between the Company and Cato Holding Company	8-K	10.1	2/27/2009	000-6533
10.27	Sublease, dated September 9, 2005, by and between Small Army, Inc. and the Company	10-Q for9/30/2005	10.2	11/14/2005		000-6533
10.35	Letter Agreement, dated February 24, 2009, by and between the Company and Cato BioVentures	8-K	10.2	2/27/2009	000-6533
10.28	Sublease, dated September 9, 2005, by and between Dell Mitchell Architects, Inc. and the Company	10-Q for9/30/2005	10.3	11/14/2005		000-6533
10.36	Securities Purchase Agreement, dated March 19, 2009, by and between the Company and Robert L. Gipson	8-K	10.1	3/25/2009	000-6533
Material Contracts — Stock Purchase, Financing and Credit Agreements
10.37	Securities Purchase Agreement, dated April 16, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	4/22/2009	000-6533
10.29	Third Amended and Restated Convertible Promissory Note Purchase Agreement (unsecured), dated March 18, 2008 by and among the Company and the purchasers listed therein	8-K	10.1	3/20/2008		000-6533
10.38	Securities Purchase Agreement, dated May 12, 2009, by and between the Company and Robert L. Gipson	10-Q	10.2	8/14/2009	000-6533
10.30	Convertible Promissory Note Purchase Agreement (unsecured) dated June 25, 2008, by and between the Company and Robert L. Gipson	8-K	10.1	6/30/2008		000-6533
10.39	Securities Purchase Agreement, dated June 10, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	6/22/2009	000-6533
10.31	Securities Purchase Agreement, dated November 20, 2008, by and between the Company and Robert L. Gipson	8-K	10.1	11/25/2008		000-6533
10.40	Securities Purchase Agreement, dated July 9, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	7/13/2009	000-6533
10.32	Letter Agreement, dated November 20, 2008, by and between the Company and Robert L. Gipson	8-K	10.3	11/25/2008		000-6533
10.41	Securities Purchase Agreement, dated July 23, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	7/29/2009	000-6533
10.33	Securities Purchase Agreement, dated January 8, 2009, by and between the Company and Robert L. Gipson	10-K for12/31/2009	10.33	3/31/2010		000-6533
10.42	Securities Purchase Agreement, dated August 11, 2009, by and between the Company and Robert L. Gipson	10-K for12/31/2009	10.42	3/31/2010	000-6533
10.34	Securities Purchase Agreement, dated February 24, 2009, by and between the Company and Cato Holding Company	8-K	10.1	2/27/2009		000-6533
10.43	Securities Purchase Agreement, dated August 26, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	9/1/2009	000-6533
10.35	Letter Agreement, dated February 24, 2009, by and between the Company and Cato BioVentures	8-K	10.2	2/27/2009		000-6533
10.44	Securities Purchase Agreement, dated September 10, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	9/16/2009	000-6533
10.36	Securities Purchase Agreement, dated March 19, 2009, by and between the Company and Robert L. Gipson	8-K	10.1	3/25/2009		000-6533
10.45	Securities Purchase Agreement, dated September 28, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	10/2/2009	000-6533
10.37	Securities Purchase Agreement, dated April 16, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	4/22/2009		000-6533
10.46	Securities Purchase Agreement, dated November 4, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	11/10/2009	000-6533
10.38	Securities Purchase Agreement, dated May 12, 2009, by and between the Company and Robert L. Gipson	10-Q	10.2	8/14/2009		000-6533
10.47	Promissory Note issued by the Company to Robert Gipson dated December 23, 2009	8-K	10.7	12/28/2009	000-6533
10.39	Securities Purchase Agreement, dated June 10, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	6/22/2009		000-6533
10.48	Promissory Note issued by the Company to Robert Gipson dated January 28, 2010	8-K	10.7	1/28/2010	000-6533
10.40	Securities Purchase Agreement, dated July 9, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	7/13/2009		000-6533
10.49	Promissory Note issued by the Company to Robert Gipson dated February 10, 2010	10-K for12/31/2009	10.49	3/31/2010	000-6533
10.41	Securities Purchase Agreement, dated July 23, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	7/29/2009		000-6533
10.50	Promissory Note issued by the Company to Robert Gipson dated February 26, 2010	8-K	10.7	3/4/2010	000-6533
10.51	Promissory Note issued by the Company to Robert Gipson dated March 9, 2010	10-K for12/31/2009	10.51	3/31/2010	000-6533

4551

		Incorporated by Reference to
Exhibit Number	Description	Form	ExhibitNumber	Filing Date	SEC FileNumber
10.52	Promissory Note issued by the Company to Robert Gipson dated March 25, 2010	10-K for12/31/2009	10.52	3/31/2010	000-6533
10.42	Securities Purchase Agreement, dated August 11, 2009, by and between the Company and Robert L. Gipson	10-K for12/31/2009	10.42	3/31/2010		000-6533
10.53	Promissory Note issued by the Company to Robert Gipson dated April 20, 2010	8-K	10.7	4/21/2010	000-6533
10.43	Securities Purchase Agreement, dated August 26, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	9/1/2009		000-6533
10.54	Promissory Note issued by the Company to Robert Gipson dated May 24, 2010	10-K for12/31/2011	10.54	3/31/2011	000-6533
10.44	Securities Purchase Agreement, dated September 10, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	9/16/2009		000-6533
10.55	Promissory Note issued by the Company to Robert Gipson dated June 10, 2010	8-K	10.7	6/11/2010	000-6533
10.45	Securities Purchase Agreement, dated September 28, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	10/2/2009		000-6533
10.56	Promissory Note issued by the Company to Robert Gipson dated July 1, 2010	8-K	10.7	7/8/2010	000-6533
10.46	Securities Purchase Agreement, dated November 4, 2009, by and between the Company and Robert L. Gipson	8-K	10.7	11/10/2009		000-6533
10.57	Promissory Note issued by the Company to Robert Gipson dated August 2, 2010	8-K	10.7	8/3/2010	000-6533
10.47	Promissory Note issued by the Company to Robert Gipson dated December 23, 2009	8-K	10.7	12/28/2009		000-6533
10.58	Promissory Note issued by the Company to Robert Gipson dated September 7, 2010	8-K	10.7	9/8/2010	000-6533
10.48	Promissory Note issued by the Company to Robert Gipson dated January 28, 2010	8-K	10.7	1/28/2010		000-6533
10.59	Promissory Note issued by the Company to Robert Gipson dated September 13, 2010	8-K	10.8	9/16/2010	000-6533
10.49	Promissory Note issued by the Company to Robert Gipson dated February 10, 2010	10-K for12/31/2009	10.49	3/31/2010		000-6533
10.60	Promissory Note issued by the Company to Robert Gipson dated September 20, 2010	10-K for12/31/2011	10.60	3/31/2011	000-6533
10.50	Promissory Note issued by the Company to Robert Gipson dated February 26, 2010	8-K	10.7	3/4/2010		000-6533
10.61	Promissory Note issued by the Company to Robert Gipson dated October 18, 2010	10-K for12/31/2011	10.61	3/31/2011	000-6533
10.51	Promissory Note issued by the Company to Robert Gipson dated March 9, 2010	10-K for12/31/2009	10.51	3/31/2010		000-6533
10.62	Note purchase Agreement with Highbridge International LLC dated September 10, 2010	8-K	10.7	9/16/2010	000-6533
10.52	Promissory Note issued by the Company to Robert Gipson dated March 25, 2010	10-K for12/31/2009	10.52	3/31/2010		000-6533
10.63	Promissory Note issued by the Company to Robert Gipson dated November 4, 2010	8-K	10.7	11/5/2010	000-6533
10.53	Promissory Note issued by the Company to Robert Gipson dated April 20, 2010	8-K	10.7	4/21/2010		000-6533
10.64	Promissory Note issued by the Company to Robert Gipson dated December 9, 2010	8-K	10.7	12/10/2010	000-6533
10.54	Promissory Note issued by the Company to Robert Gipson dated May 24, 2010	10-K for12/31/2011	10.54	3/31/2011		000-6533
10.65	Promissory Note issued by the Company to Robert Gipson dated January 7, 2011	8-K	10.7	1/13/2011	000-6533
10.55	Promissory Note issued by the Company to Robert Gipson dated June 10, 2010	8-K	10.7	6/11/2010		000-6533
10.66	Stock Repurchase Agreement with Robert Gipson dated December 28, 2010	8-K	1.01	1/3/2011	000-6533
10.56	Promissory Note issued by the Company to Robert Gipson dated July 1, 2010	8-K	10.7	7/8/2010		000-6533
10.67	Promissory Note issued by the Company to Robert Gipson dated February 8, 2011	8-K	10.7	2/9/2011	000-6533
10.57	Promissory Note issued by the Company to Robert Gipson dated August 2, 2010	8-K	10.7	8/3/2010		000-6533
10.68	Promissory Note issued by the Company to Robert Gipson dated March 4, 2011	8-K	10.7	3/10/2011	000-6533
10.58	Promissory Note issued by the Company to Robert Gipson dated September 7, 2010	8-K	10.7	9/8/2010		000-6533
10.69	Promissory Note issued by the Company to Robert Gipson dated March 16, 2011	8-K	10.7	3/22/2011	000-6533
10.59	Promissory Note issued by the Company to Robert Gipson dated September 13, 2010	8-K	10.8	9/16/2010		000-6533

4652

Incorporated by Reference to

Exhibit Number

Description

Form

ExhibitNumber

Filing Date

SEC FileNumber

Management Contract or Compensatory Plan or Arrangement

10.60

Promissory Note issued by the Company to Robert Gipson dated September 20, 2010

10-K for12/31/2011

10.60

3/31/2011

000-6533

10.70#

Form of Indemnity for Directors and Executive Officers

10-K for12/31/2003

10.32

3/30/2004

000-6533

10.61

Promissory Note issued by the Company to Robert Gipson dated October 18, 2010

10-K for12/31/2011

10.61

3/31/2011

000-6533

10.71#

Form of Incentive Stock Option Agreement, as amended

10-Q for3/31/2005

10.1

5/16/2005

000-6533

10.62

Note purchase Agreement with Highbridge International LLC dated September 10, 2010

8-K

10.7

9/16/2010

000-6533

10.72#

Form of Non-Statutory Stock Option Agreement, as amended

10-Q for3/31/2005

10.2

5/16/2005

000-6533

10.63

Promissory Note issued by the Company to Robert Gipson dated November 4, 2010

8-K

10.7

11/5/2010

000-6533

10.73#

Form of Incentive Stock Option Agreement for 2005 Stock Incentive Plan

10-K for12/31/2005

10.54

3/31/2006

000-6533

10.64

Promissory Note issued by the Company to Robert Gipson dated December 9, 2010

8-K

10.7

12/10/2010

000-6533

10.74#

Form of Non-Statutory Stock Option Agreement for 2005 Stock Incentive Plan

10-K for12/31/2005

10.55

3/31/2006

000-6533

10.65

Promissory Note issued by the Company to Robert Gipson dated January 7, 2011

8-K

10.7

1/13/2011

000-6533

10.75#

Amended and Restated 1990 Non-Employee Directors’ Non Qualified Stock Option Plan, as amended

10-K for12/31/2008

10.44

3/31/2009

000.6533

10.66

Stock Repurchase Agreement with Robert Gipson dated December 28, 2010

8-K

1.01

1/3/2011

000-6533

10.76#

Amended and Restated Omnibus Stock Option Plan

10-K for12/31/2008

10.45

3/31/2009

000.6533

10.67

Promissory Note issued by the Company to Robert Gipson dated February 8, 2011

8-K

10.7

2/9/2011

000-6533

10.77#

Amended and Restated 1998 Omnibus Stock Option Plan

10-K for12/31/2008

10.46

3/31/2009

000.6533

10.68

Promissory Note issued by the Company to Robert Gipson dated March 4, 2011

8-K

10.7

3/10/2011

000-6533

10.78#

Amended and Restated 2005 Stock Incentive Plan

10-K for12/31/2008

10.47

3/31/2009

000.6533

10.69

Promissory Note issued by the Company to Robert Gipson dated March 16, 2011

8-K

10.7

3/22/2011

000-6533

10.79#

Director and Officer Indemnity Trust Agreement, dated June 15, 2004, between S. David Hillson, Boston Private Bank & Trust Company and the Company

8-K

99.6

6/17/2004

000-6533

Management Contract or Compensatory Plan or Arrangement

10.80#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Peter G. Savas

8-K

10.1

1/6/2009

000-6533

10.70#

Form of Indemnity for Directors and Executive Officers

10-K for12/31/2003

10.32

3/30/2004

000-6533

10.81#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Mark J. Pykett

8-K

10.2

1/6/2009

000-6533

10.71#

Form of Incentive Stock Option Agreement, as amended

10-Q for3/31/2005

10.1

5/16/2005

000-6533

10.82#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Kenneth L. Rice, Jr.

8-K

10.3

1/6/2009

000-6533

10.72#

Form of Non-Statutory Stock Option Agreement, as amended

10-Q for3/31/2005

10.2

5/16/2005

000-6533

10.83#

Consulting Agreement dated September 29, 2006, by and between the Company and Robert S. Langer, Jr.

8-K

10.1

10/4/2006

000-6533

10.73#

Form of Incentive Stock Option Agreement for 2005 Stock Incentive Plan

10-K for12/31/2005

10.54

3/31/2006

000-6533

10.74#

Form of Non-Statutory Stock Option Agreement for 2005 Stock Incentive Plan

10-K for12/31/2005

10.55

3/31/2006

000-6533

10.75#

Amended and Restated 1990 Non-Employee Directors’ Non Qualified Stock Option Plan, as amended

10-K for12/31/2008

10.44

3/31/2009

000.6533

10.76#

Amended and Restated Omnibus Stock Option Plan

10-K for12/31/2008

10.45

3/31/2009

000.6533

10.77#

Amended and Restated 1998 Omnibus Stock Option Plan

10-K for12/31/2008

10.46

3/31/2009

000.6533

10.78#

Amended and Restated 2005 Stock Incentive Plan

10-K for12/31/2008

10.47

3/31/2009

000.6533

10.79#

Director and Officer Indemnity Trust Agreement, dated June 15, 2004, between S. David Hillson, Boston Private Bank & Trust Company and the Company

8-K

99.6

6/17/2004

000-6533

4753

Incorporated by Reference to

Exhibit Number

Description

Form

ExhibitNumber

~~FilingDate~~Filing Date

SEC FileNumber

Additional Exhibits

10.80#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Peter G. Savas

8-K

10.1

1/6/2009

000-6533

Subsidiaries of the Registrant

10.81#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Mark J. Pykett

8-K

10.2

1/6/2009

000-6533

23.1

Consent of McGladrey & Pullen, LLP

10.82#

Amended and Restated Employment Agreement, dated December 31, 2008, between the Company and Kenneth L. Rice, Jr.

8-K

10.3

1/6/2009

000-6533

31.1

Certification of Chief Executive Officer pursuant to Rule 13a- 14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

10.83#

Consulting Agreement dated September 29, 2006, by and between the Company and Robert S. Langer, Jr.

8-K

10.1

10/4/2006

000-6533

31.2

Certification of Chief Financial Officer pursuant to Rule 13a- 14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

Additional Exhibits

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Subsidiaries of the Registrant

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

23.1

Consent of McGladrey LLP

101.INS**

XBRL Instance Document

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

101.SCH**

XBRL Taxonomy Extension Schema Document

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.LAB**

XBRL Taxonomy Extension Label Linkbase Document

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.PRE**

XBRL Taxonomy Presentation Linkbase Document

101.INS**

XBRL Instance Document

101.DEF**

XBRL Taxonomy Definition Linkbase Document

101.SCH**

XBRL Taxonomy Extension Schema Document

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB**

XBRL Taxonomy Extension Label Linkbase Document

101.PRE**

XBRL Taxonomy Presentation Linkbase Document

101.DEF**

XBRL Taxonomy Definition Linkbase Document

*	Filed herewith.

In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposed of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

(#)	Management contract or compensatory plan or arrangement filed as an exhibit to this Form pursuant to Item 15(b) of Form 10-K.

(+)	Confidential treatment has been requested as to certain portions, which portions have been filed separately with the Securities and Exchange Commission.

4854

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Filing Compare · ALSERES PHARMACEUTICALS INC /DE