The two men accused of theft of an iPhone 4 prototype last year have pleaded not guilty to the charges. The iPhone 4 in question was left in a bar by Apple employee Robert Gray Powell in Redwood City, California. The two men, Brian Hogan (pictured above) and Robert Sage Wallover will face charges of midemeanors rather than felonies.

At an arraignment here this morning, lawyers for Brian Hogan, the man who allegedly found the prototype in a bar after it was left there by an Apple engineer, and Robert Sage Wallower, who is accused of that charge as well as possessing stolen property, entered their pleas before Superior Court Judge Jonathan Karesh.

Gizmodo subsequently bought the iPhone 4 prototype from the two men and the rest as they say is history. No charges were ever filed against Gizmodo however, under California law, any person that finds lost property and is aware who the owner is likely to be and “appropriates such property for his own use”, is guilty of theft. Also any person who knowingly receives property that has been received illegally can face prison for up to one year.

Anyone have strong feelings one way or the other how this one will end up?