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<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Overview</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VistaGen Therapeutics, Inc. (NASDAQ: VTGN),
a Nevada corporation, is a clinical-stage biopharmaceutical company focused on developing new generation medicines for depression
and other central nervous system (<i>CNS</i>) disorders.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">AV-101 is our oral CNS product candidate in
Phase 2 clinical development in the United States, initially as a new generation adjunctive treatment for Major Depressive Disorder
(<i>MDD</i>) in patients with an inadequate response to standard antidepressants approved by the U.S. Food and Drug Administration
(<i>FDA</i>).  AV-101’s mechanism of action (<i>MOA</i>) involves both NMDA (N-methyl-D-aspartate) and AMPA (alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic
acid) receptors in the brain responsible for fast excitatory synaptic activity throughout the CNS.  AV-101’s MOA is
fundamentally different from all standard FDA-approved antidepressants, as well as all atypical antipsychotics, such as aripiprazole,
often used adjunctively with standard antidepressants. We believe AV-101 also has potential to treat several additional CNS indications
<font style="color: #333333; background-color: white">where modulation of the NMDA receptors, activation of AMPA pathways and/or
key active metabolites of AV-101 may achieve therapeutic benefit</font>, including, among others, as a non-opioid alternative for
neuropathic pain and for Parkinson’s disease levodopa -induced dyskinesia (<i>PD LID</i>).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Clinical studies conducted at the U.S. National
Institute of Mental Health (<i>NIMH</i>), part of the U.S. National Institutes of Health (<i>NIH</i>), by Dr. Carlos Zarate, Jr.,
Chief of the NIMH’s Experimental Therapeutics & Pathophysiology Branch and its Section on Neurobiology and Treatment
of Mood and Anxiety Disorders, have focused on the antidepressant effects of ketamine hydrochloride injection (<i>ketamine</i>),
an ion-channel blocking NMDA receptor antagonist approved by the FDA as an anesthetic, in MDD patients with inadequate responses
to multiple standard antidepressants. These NIMH studies, as well as clinical research at Yale University and other academic institutions
in the U.S., have demonstrated ketamine’s robust antidepressant effects in treatment-resistant MDD patients within twenty-four
hours of a single sub-anesthetic dose administered by intravenous (<i>IV</i>) injection.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We believe orally administered AV-101 may have
potential to deliver ketamine-like antidepressant effects, without ketamine’s psychological side effects and other safety
concerns, and without the need for IV administration. As published in the October 2015 issue of the peer-reviewed, <i>Journal
of Pharmacology and Experimental Therapeutics, </i>in an article titled, <i>The prodrug 4-chlorokynurenine causes ketamine-like
antidepressant effects, but not side effects, by NMDA/glycineB-site inhibition,</i> using well-established preclinical models
of depression, AV-101 was shown to induce fast-acting, dose-dependent, persistent and statistically significant antidepressant-like
responses following a single treatment. These responses were equivalent to those seen with a single sub-anesthetic control dose
of ketamine. In addition, these studies confirmed that the fast-acting antidepressant effects of AV-101 were mediated through both
inhibiting the glycine binding (<i>GlyB</i>) site of the NMDA receptor and activating the AMPA receptor pathway in the brain.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In October 2017, we received FDA authorization
to launch our 180-patient Phase 2 multi-center, multi-dose, double blind, placebo-controlled efficacy and safety study of AV-101
as a new generation adjunctive treatment for MDD patients with an inadequate therapeutic response to standard, FDA-approved antidepressants
(the <i>AV-101 MDD Phase 2 Adjunctive Treatment Study</i>), and in December 2017 the FDA granted Fast Track Designation to AV-101 for development as a potential
adjunctive treatment for MDD. We intend to launch the AV-101 MDD Phase 2 Adjunctive Treatment
Study in the first quarter of 2018 with Dr. Maurizio Fava, Professor of Psychiatry at Harvard Medical School and Director, Division
of Clinical Research, Massachusetts General Hospital (<i>MGH</i>) Research Institute, as the Principal Investigator. Dr. Fava
was the co-Principal Investigator with Dr. A. John Rush of the STAR*D study, the largest clinical trial conducted in depression
to date, whose findings were published in journals such as the <i>New England Journal of Medicine</i> (<i>NEJM</i>) and the <i>Journal
of the American Medical Association</i> (<i>JAMA</i>). We expect top line results of the AV-101 MDD Phase 2 Adjunctive Treatment
Study to be available in the first half of 2019. In addition, pursuant to our Cooperative Research and Development Agreement
(<i>CRADA</i>) with the NIMH, the NIMH is currently funding, and Dr. Zarate, as Principal Investigator, and his team are currently
conducting, a small Phase 2 clinical study of AV-101 as a monotherapy in subjects with treatment-resistant MDD (the <i>NIMH
AV-101 MDD Phase 2 Monotherapy Study</i>).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VistaStem Therapeutics (<i>VistaStem</i>) is
our wholly owned subsidiary focused on applying human pluripotent stem cell (<i>hPSC</i>) technology to discover, rescue, develop
and commercialize (i) proprietary new chemical entities (<i>NCEs</i>) for CNS and other diseases and (ii) regenerative medicine
(<i>RM</i>) involving hPSC-derived blood, cartilage, heart and liver cells.  Our internal drug rescue programs are designed
to utilize <i>CardioSafe 3D</i>, our customized cardiac bioassay system, to develop small molecule NCEs for our pipeline. 
To advance potential RM applications of our cardiac stem cell technology, in December 2016, we exclusively sublicensed to BlueRock
Therapeutics LP, a next generation RM company established by Bayer AG and Versant Ventures (<i>BlueRock Therapeutics</i>), rights
to certain proprietary technologies relating to the production of cardiac stem cells for the treatment of heart disease (the <i>BlueRock
Agreement</i>). In a manner similar to our exclusive sublicense agreement with BlueRock Therapeutics, we may pursue additional
RM collaborations or out-licensing transactions involving blood, cartilage, and/or liver cells derived from hPSCs for (A) cell-based
therapy, (B) cell repair therapy, and/or (C) tissue engineering.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Subsidiaries</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As noted above, VistaStem is our wholly-owned
subsidiary. Our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q (<i>Report</i>) also include
the accounts of VistaStem’s two wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation, and
VistaStem Canada, Inc., a corporation organized under the laws of Ontario, Canada.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (<i>U.S.
GAAP</i>) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly,
they do not contain all of the information and footnotes required for complete consolidated financial statements. In the opinion
of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly our interim financial information. The accompanying Condensed Consolidated
Balance Sheet at March 31, 2017 has been derived from our audited consolidated financial statements at that date but does not include
all disclosures required by U.S. GAAP.  The operating results for the three and nine months ended December 31, 2017 are not
necessarily indicative of the operating results to be expected for our fiscal year ending March 31, 2018, or for any other future
interim or other period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements and notes to Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated
Financial Statements for our fiscal year ended March 31, 2017 contained in our Annual Report on Form 10-K, as filed with the Securities
and Exchange Commission (<i>SEC</i>) on June 29, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared assuming we will continue as a going concern. As a company having not yet developed commercial
products or achieved sustainable revenues, we have experienced recurring losses and negative cash flows from operations resulting
in a deficit of $152.5 million accumulated from inception (May 1998) through December 31, 2017. We expect losses and negative cash
flows from operations to continue for the foreseeable future as we engage in further development of AV-101, initially as an adjunctive
treatment for MDD, and subsequently as a potential new treatment alternative for other CNS-related conditions, as well as exploring
and potentially executing drug rescue and development opportunities using <i>CardioSafe</i> 3D.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">From our inception through December 31, 2017,
we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and debt securities
for cash proceeds of approximately $61.4 million, as well as from an aggregate of approximately $17.6 million of government research
grant awards, strategic collaboration payments, intellectual property sublicensing and other revenues. We have also issued equity
securities with an approximate value at issuance of $33.6 million in non-cash settlements of certain liabilities, including liabilities
for professional services rendered to us or as compensation for such services. Additionally, pursuant to our February 2015 CRADA
with the NIH, substantial ongoing Phase 2 clinical development activities relating to the NIMH AV-101 MDD Phase 2 Monotherapy
Study are being sponsored in full, at no cost to us other than supplying clinical trial material, by the NIMH under the direction
of Dr. Carlos Zarate Jr. as Principal Investigator.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At December 31, 2017, we had a cash and
cash equivalents balance of $13.0 million. We believe this amount is sufficient to enable us to fund our planned operations for
at least 12 months following the issuance of the financial statements included in this Report.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In December 2017, we completed an underwritten
public offering of shares of our common stock and warrants to purchase shares of our common stock at a combined public offering
price of $1.50 per share and related warrant under our Registration Statement on Form S-1 (Registration No. 333-221009), resulting
in gross proceeds of $15.0 million (the <i>December 2017 Public Offering</i>). In September 2017, we completed an underwritten
public offering pursuant to which we offered and sold shares of our common stock and warrants resulting in gross proceeds of approximately
$2.4 million (the <i>September 2017 Public Offering</i>) under our Registration Statement on Form S-3 (Registration No. 333-215671)
(the <i>S-3 Registration Statement</i>). (See Note 7, <i>Capital Stock,</i> for additional information regarding the December 2017
Public Offering and the September 2017 Public Offering.) Subject to certain restrictions, the S-3 Registration Statement remains
available for future sales of our equity securities in one or more public offerings from time to time. While we may make additional
sales of our equity securities under the S-3 Registration Statement, we do not have an obligation to do so. As we have been in
the past, we expect that, if necessary, we will be successful in raising additional capital from the sale of our equity
securities either in one or more public offerings or in one or more private placement transactions with individual accredited investors
or institutions.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to the sale of our equity securities,
we may also seek to enter additional research and development collaborations that could generate revenue or provide substantial
funding for development of AV-101 and additional product candidates. We may also seek additional government grant awards or agreements
similar to our current CRADA with the NIMH, which provides for the NIMH to fully fund the NIMH AV-101 MDD Phase 2 Monotherapy Study.
Such strategic collaborations may provide non-dilutive resources to advance our strategic initiatives while reducing a portion
of our future cash outlays and working capital requirements. In a manner similar to the BlueRock Agreement, we may also pursue
similar arrangements with third-parties covering other of our intellectual property. Although we may seek additional collaborations
with the U.S. government or other third-parties that could generate revenue and/or non-dilutive funding for development of AV-101
and other product candidates and technologies, as well as new government grant awards and/or agreements similar to our CRADA with
NIMH, no assurance can be provided that any such collaborations, awards or agreements will occur in the future.  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our future working capital requirements will
depend on many factors, including, without limitation, the scope and nature of opportunities related to our success and the success
of certain other companies in clinical trials, including our development and commercialization of AV-101, initially as an adjunctive
treatment for MDD, and as a potential treatment option for other CNS conditions, as well as various potential applications of our
stem cell technology platform, the availability of, and our ability to obtain, government grant awards and agreements, and our
ability to enter into collaborations on terms acceptable to us. To further advance the clinical development of AV-101 and opportunities
related to our stem cell technology platform, as well as support our operating activities, we plan to continue to carefully manage
our routine operating costs, including our employee headcount and related expenses, as well as costs relating to regulatory consulting,
contract research and development, investor relations and corporate development, legal, acquisition and protection of intellectual
property, public company compliance and other professional services and operating costs. </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notwithstanding the foregoing, there can be
no assurance that, if needed, future financing will be available in sufficient amounts, in a timely manner, or on terms acceptable
to us, if at all. If we are unable to obtain substantial additional financing on a timely basis when needed, our business, financial
condition, and results of operations may be harmed, the price of our stock may decline, we may be required to reduce, defer, or
discontinue certain of our research and development activities and we may not be able to continue as a going concern.  As
noted above, these Condensed Consolidated Financial Statements do not include any adjustments that might result from the negative
outcome of this uncertainty.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Use of Estimates</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the 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 from those estimates.  Significant estimates include
those relating to share-based compensation, and assumptions that have been used historically to value warrants and warrant modifications.
With the exception of the $1.25 million of sublicense revenue recorded in the quarter ended December 31, 2016 under the BlueRock
Agreement, we do not currently have, nor have we had during the periods covered by this report, any arrangements requiring the
recognition of revenue.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Research and Development Expenses</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses are composed
of both internal and external costs. Internal costs include salaries and employment-related expenses of our scientific personnel
and direct project costs. External research and development expenses consist primarily of costs associated with nonclinical and
clinical development of AV-101, now in Phase 2 clinical development, initially for MDD, stem cell technology-related research and
development costs, and costs related to the filing, maintenance and prosecution of patents and patent applications, technology
licenses and protection of other intellectual property. All such costs are charged to expense as incurred.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Stock-Based Compensation</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We recognize compensation cost for all stock-based
awards to employees or consultants based on the grant date fair value of the award. Non-cash stock-based compensation expense is
recognized over the period during which the employee or consultant is required to perform services in exchange for the award, which
generally represents the scheduled vesting period. We have no awards with market or performance conditions. For equity awards to
non-employees, we re-measure the fair value of the awards as they vest and the resulting change in value is recognized as an expense
during the period over which the services are performed.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine
months ended December 31, 2017 and 2016.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Three
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31, </b></font></p></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Nine
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31,</b></font></p></td>
<td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">689,300</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">267,200</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,386,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">573,900</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2017, our Board approved the grant
of options to purchase an aggregate of 880,000 shares of our common stock at an exercise price of $1.96 per share to the independent
members of our Board, our officers and our employees. In September 2017, our stockholders approved an amendment to our 2016 Amended
and Restated Stock Incentive Plan (the <i>2016 Plan</i>) to increase the number of shares issuable thereunder from 3.0 million
shares to 10.0 million shares. Following that approval, our Board authorized the grant of options to purchase an aggregate of 770,000
shares of our common stock at an exercise price of $1.56 per share to the independent members of our Board, our officers, employees
and certain consultants. We valued the options granted in April 2017 and September 2017 using the Black-Scholes Option Pricing
Model and the following weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">April 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.02</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.99</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.48</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.70</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.24</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">92.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">880,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">770,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.42</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.20</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, our Board approved the grant of
options to purchase an aggregate of 655,000 shares of our common stock at an exercise price of $3.49 per share to the independent
members of our Board and to our officers, including our then-newly-hired Chief Medical Officer. In September 2016, the Board approved
the grant of an option to purchase 125,000 shares of our common stock at an exercise price of $4.27 per share to another then-newly-hired
officer. We valued the options granted in June 2016 and September 2016 using the Black-Scholes Option Pricing Model and the following
weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">June 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.34</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.68</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.25</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">81.69</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.26</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">655,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">125,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>2.50</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>3.05</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2017, there were stock options
outstanding to purchase 3,279,871 shares of our common stock at a weighted average exercise price of $3.23 per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 9, <i>Subsequent Events</i>, for information
regarding option grants made during February 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Comprehensive Loss</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have no components of other comprehensive
loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Income (Loss) per Common Share</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic net income (loss) per share of common
stock excludes the effect of dilution and is computed by dividing net income (loss) by the weighted-average number of shares of
common stock outstanding for the period. Diluted net income (loss) per share of common stock reflects the potential dilution that
could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common
stock.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for the periods
presented, potentially dilutive securities were excluded from the computation of net loss per share, as their effect would be antidilutive.
For the three and nine-month periods ended December 31, 2017 and 2016, the accrual for dividends on our Series B 10% Convertible
Preferred Stock (<i>Series B Preferred</i>) is treated as a deduction from our net loss to arrive at net loss attributable to common
stockholders for those periods. Additionally, in 2017, the deemed dividend attributable to the trigger of the down round provision
feature, and, in 2016, the deemed dividend attributable to our sale and issuance of Series B Preferred Units, each consisting of
one share of Series B Preferred and a five-year warrant to purchase one share of our common stock for $7.00, each represent further
deductions from our net loss to arrive at net loss attributable to common stockholders for those periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Potentially dilutive securities excluded in
determining diluted net loss attributable to common stockholders per common share are as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of December 31,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3,279,871</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,659,324</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,918,292</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,550,370</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">24,426,415</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">10,437,946</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Fair Value Measurements</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We do not use derivative instruments for hedging
of market risks or for trading or speculative purposes. We carried no assets or liabilities at fair value at December 31, 2017
or March 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Recent Accounting Pronouncements</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Except as described below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2017, as compared
to the recent accounting pronouncements described in our Form 10-K for the fiscal year ended March 31, 2017, that are of significance
or potential significance to us.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2017, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 2017-11, “Earnings Per Share (Topic 260); Distinguishing
Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Part I: Accounting for Certain Financial Instruments
with Down Round Features; Part II: Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain
Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (<i>ASU 2017-11</i>).
Part I of this ASU provides that an entity will no longer have to consider “down round” features (i.e., a provision
in an equity-linked financial instrument, such as a free-standing warrant, or an embedded feature, such as a conversion option
in a convertible instrument, that reduces the exercise price of such instrument if the entity subsequently sells stock for a lower
price or issues an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial
instruments or embedded features are indexed to its own stock. The definition of a down round feature in ASU 2017-11 excludes standard
anti-dilution provisions related to changes in an entity’s capital structure. Accounting Standards Codification Topic 815-40,
“Derivatives and Hedging–Contracts in Entity’s Own Equity” (<i>ASC 815-40</i>) requires that a freestanding
equity-linked financial instrument be indexed to the issuer’s own stock to be classified as equity. An equity-linked embedded
feature that meets the definition of a derivative may avoid bifurcation and derivative accounting if it is indexed to the issuer’s
own stock. Under the terms of prior guidance, a freestanding financial instrument or embedded feature was not considered indexed
to the issuer’s own stock if it had a down round provision. Consequently, the freestanding financial instrument was classified
as a liability (or asset), and if it met the definition of a derivative, was measured at fair value with changes in fair value
recorded through earnings. Similarly, an embedded feature was bifurcated and separately accounted for as a derivative if it met
all other criteria for bifurcation under ASC 815-40. The bifurcated embedded feature was also measured at fair value through earnings.
Under the provisions of ASU 2017-11, an entity that presents earnings per share (<i>EPS</i>) under Accounting Standards Codification
Topic 260, “Earnings Per Share” will recognize the effect of a down round feature in a freestanding equity-classified
financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a
reduction to income available to common shareholders in basic EPS. The new guidance requires new disclosures for financial instruments
with down round features and other terms that change conversion or exercise prices. Part I of ASU 2017-11 is effective for fiscal
years beginning after December 15, 2018, and interim periods therein, however early adoption is permitted. We early-adopted ASU
2017-11 effective with our quarter ended September 30, 2017 and applied its guidance to certain of the warrants issued in the September
2017 Public Offering, as described more completely in Note 7, <i>Capital Stock</i>. No retrospective adjustments to our financial
statements were required as a result of our adoption of ASU 2017-11.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-2,
“Leases.” This ASU requires substantially all leases, including operating leases, to be recognized by lessees on their
balance sheet as a right-of-use asset and corresponding lease liability. This ASU is effective for our interim and annual reporting
periods beginning April 1, 2019 and early adoption is permitted. We are currently evaluating the impact that the adoption of this
ASU will have on our financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No. 2016-09,
“Improvements to Employee Share-Based Payment Accounting,” which simplified several aspects of the accounting for share-based
payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold
to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting
policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and
clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer
withholds shares for tax-withholding purposes. This ASU became effective for our interim and annual reporting periods beginning
April 1, 2017, and the adoption of this standard did not have a material impact on our financial statements. Pursuant to our adoption
of this standard, we elected to account for the impact of option forfeitures as they occur.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Prepaid expenses and other current assets are composed of the following
at December 31, 2017 and March 31, 2017:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> December 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">770,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">352,800</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Insurance</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">72,300</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">85,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">48,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">11,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">23,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">940,400</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">456,600</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Accrued expenses are composed of the following at December 31, 2017
and March 31, 2017:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> December 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">565,700</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">402,400</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">37,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued compensation</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">105,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">770,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">443,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">The following table summarizes our unsecured promissory notes at
December 31, 2017 and March 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">  <b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>March 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Balance</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Balance</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">7.95% and 8.25% Notes payable to insurance</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 40%"><font style="font-size: 8pt">premium financing company (current)</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total notes payable to unrelated parties</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(43,700</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(43,700</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(54,800</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(54,800</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Net non-current portion</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2017, we executed a 7.95% promissory
note in the principal amount of $142,400 in connection with insurance policy premiums. The note is payable in monthly installments
of $14,800, including principal and interest, through March 2018, and had a remaining outstanding balance of $43,700 at December
31, 2017. In February 2017, we executed a promissory note in the principal amount of $60,700 in connection with other insurance
policy premiums. That note was payable in monthly installments of $6,300, including principal and interest, and was paid in full
at December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At our Annual Meeting of Stockholders on September
15, 2017, as approved by and recommended to our stockholders by our Board of Directors, our stockholders approved an amendment
to our Restated and Amended Articles of Incorporation to increase the authorized number of shares of common stock that we may issue
from 30.0 million shares to 100.0 million shares. The amendment became effective on September 15, 2017, upon our filing of a certificate
of amendment with the Nevada Secretary of State.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in December
2017 Underwritten</i></b> <b><i>Public Offering</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 13, 2017, we completed the December
2017 Public Offering, resulting in gross proceeds of $15.0 million, pursuant to which we offered and sold shares of our common
stock and warrants to purchase shares of our common stock at a combined public offering price of $1.50 per shares and related warrant.
We issued an aggregate of 10,000,000 shares of our common stock and warrants to purchase up to 10,000,000 shares of our common
stock at an exercise price of $1.50 per share (the <i>December 2017 Offering Warrants</i>). The common stock and the shares of
common stock underlying the December 2017 Offering Warrants issued in the December 2017 Public Offering were offered, issued and
sold pursuant to our Registration Statement on Form S-1 (Registration No. 333-221009) that was declared effective by the Securities
and Exchange Commission (the <i>Commission</i>) on December 11, 2017. The December 2017 Offering Warrants are exercisable at any
time through December 13, 2022, have no anti-dilution or other exercise price or share reset features, except as is customary with
respect to a change in our capital structure in the event of a stock split or dividend, and do not contain any cashless exercise
features as long as our Registration Statement on Form S-1 (Registration No. 333-221009) is effective. Accordingly, we have accounted
for the December 2017 Offering Warrants as equity warrants. We received net proceeds of approximately $13.6 million from the December
2017 Public Offering, after deducting underwriter’s commission and other expenses related to the offering.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in September
2017 Underwritten</i></b> <b><i>Public Offering</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 6, 2017, we completed the September
2017 Public Offering, resulting in gross proceeds of approximately $2.4 million, pursuant to which we offered and sold shares of
our common stock and warrants to two of our existing institutional investors. We issued an aggregate of 1,371,430 shares of our
common stock, Series A1 Warrants to purchase up to 1,388,931 shares of common stock and Series A2 Warrants to purchase up to 503,641
of common stock (collectively, the <i>Warrants</i>), each exercisable for $1.82 per share in the September 2017 Public Offering.
The Series A1 Warrants will be exercisable by the investors for a five-year period commencing on March 7, 2018, and the Series
A2 Warrants were immediately exercisable at any time through September 6, 2022. The common stock and the shares of common stock
underlying the Warrants issued in the September 2017 Public Offering were offered, issued and sold pursuant to our S-3 Registration
Statement (Registration No. 333-215671) that had previously been declared effective by the Commission to cover this and potential
future sales of our equity securities in one or more public offerings from time to time. We received net proceeds of approximately
$2.0 million from the September 2017 Public Offering, after deducting underwriter’s commission and other expenses related
to the offering.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Series A1 Warrants to purchase an aggregate
of 1,388,931 shares of our common stock issued in the September 2017 Public Offering have no anti-dilution or other exercise price
or share reset features, except as is customary with respect to a change in our capital structure in the event of a stock split
or dividend, and, accordingly, we have accounted for them as equity warrants. The Series A2 Warrants to purchase an aggregate of
503,641 shares of our common stock contained anti-dilution protection provisions that became effective upon the issuance of common
stock in the December 2017 Public Offering at a price below their then-current $1.82 per share exercise price. The anti-dilution
protection provisions in the Series A2 Warrants constituted a down round feature subject to the guidance in ASU 2017-11. Since
the Series A2 Warrants contained no other provisions which required their treatment as liability warrants rather than equity warrants,
including exercise price or share reset features, except as is customary with respect to a change in our capital structure in the
event of a stock split or dividend and which are also present in the Series A1 Warrants, we also accounted for the Series A2 Warrants
as equity warrants.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our sale of units consisting of common stock
and warrants in the December 2017 Public Offering at an offering price of $1.50 per unit triggered the anti-dilution provisions
of the Series A2 Warrants. In accordance with the anti-dilution terms and formula contained in the Series A2 warrants, the exercise
price of the Series A2 Warrants was reduced to $0.001 per share. In December 2017, certain holders exercised the reset Series A2
warrants to purchase an aggregate of 188,865 shares of our common stock from which we received nominal cash proceeds. In accordance
with the guidance in ASU 2017-11, we recognized the effect of triggering the down round feature as a dividend in our Condensed
Consolidated Statement of Stockholders’ Equity for the nine months ended December 31, 2017 and as an addition to net loss
attributable to common stockholders and in our calculation of basic and fully diluted earnings per share in our Condensed Consolidated
Statement of Operations for the three and nine months ended December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We calculated the dividend from the trigger
of the down round provision feature, $199,200, using the Black Scholes Option Pricing Model and the assumptions indicated in the
table below:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-reset</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-reset</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.17</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.17</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">0.001</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.09</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.09</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4.73</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4.73</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97.8</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97.8</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">503,641</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">503,641</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.77</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.17</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in Private
Placements</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2017, in self-placed
private placement transactions, we accepted subscription agreements from individual accredited investors, pursuant to which we
sold to such investors units, at a weighted average purchase price of $2.00 per unit, consisting of an aggregate of 437,751 unregistered
shares of our common stock and warrants, exercisable through April 30, 2021, to purchase an aggregate of 218,875 unregistered shares
of our common stock at a weighted average exercise price of $3.99 per share. The purchasers of the units have no registration rights
with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising
the units sold. The warrants are not exercisable until six months and one day following the date of issuance. We received aggregate
cash proceeds of $873,300 in connection with these self-placed private placement transactions, and the entire amount of the proceeds
was credited to stockholders’ equity.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September 30, 2017,
in a self-placed private placement transaction, we sold to an accredited investor units consisting of 28,572 shares of our unregistered
common stock and warrants exercisable through April 30, 2021 to purchase 28,572 unregistered shares of our common stock at an exercise
price of $4.00 per share. The purchaser of the units has no registration rights with respect to the shares of common stock, warrants
or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable
until six months and one day following the date of issuance. We received cash proceeds of $50,000 from this sale of our securities,
and the entire amount of the proceeds was credited to stockholders’ equity.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2017,
in a self-placed private placement transaction, we sold to an accredited investor units consisting of 150,000 shares of our unregistered
common stock and warrants exercisable through November 30, 2021 to purchase 150,000 unregistered shares of our common stock at
an exercise price of $2.00 per share. The purchaser of the units has no registration rights with respect to the shares of common
stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are
not exercisable until six months and one day following the date of issuance. We received cash proceeds of $150,000 from this sale
of our securities, and the entire amount of the proceeds was credited to stockholders’ equity.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Issuance of Common Stock to Professional
Services Providers and in Settlement of Accounts Payable</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2017, we issued
25,000 shares of our unregistered common stock having a fair value on the date of issuance of $49,800 as partial compensation to
an investor relations service provider.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September 30, 2017,
we issued an aggregate of 927,500 unregistered shares of our common stock, of which 477,500 shares were issued from our 2016 Plan,
for various professional services, including contract research, legal, investor relations and financial advisory services. The
common stock issued had an aggregate fair value of $1,503,600 on the dates issued, of which all but $139,300 has been recognized
as noncash expense through December 31, 2017. The un-expensed portion at December 31, 2017 is being recognized in expense ratably
through July 2019 in accordance with the terms of work orders for certain contract research services to be provided through that
period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2017,
we issued an aggregate of 70,000 unregistered shares of our common stock, all of which were issued from our 2016 Plan for additional
investor relations and financial advisory services. The common stock issued had an aggregate fair value of $140,800 on the dates
issued.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2017,
we also issued 500,000 unregistered shares of our common stock having a fair value at the time of issuance of $585,000 and a cash
payment of $76,500 to our contract manufacturing organization (<i>CMO</i>) in exchange for and settlement of $526,500 of open accounts
payable for services provided by the CMO relating to production of AV-101 drug substance. We recognized a corresponding loss on
settlement of accounts payable in the amount of $135,000 for the quarter ended December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Modification of Warrants Issued in Private
Placements</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September 30, 2017,
our Board of Directors (<i>Board</i>) authorized the modification of outstanding warrants issued in private placement transactions
between March 2017 and June 2017 to reduce the exercise prices and increase the number of shares issuable thereunder. We calculated
the fair value of the warrant immediately before and after the modification using the Black Scholes Option Pricing Model and the
weighted average assumptions indicated in the table below. We recognized the additional fair value, $279,700, as warrant modification
expense, included as a component of general and administrative expenses, in our Condensed Consolidated Statement of Operations
and Comprehensive Loss for the quarter ended September 30, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.54</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.54</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.99</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.62</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.62</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.62</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.62</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">95.5</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">95.5</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">247,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">495,001</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Weighted average fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.71</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.92</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2017,
the Board authorized the modification of outstanding warrants issued in private placement transactions between August 2017 and
November 2017 to reduce the exercise prices of the warrants. We calculated the fair value of the warrants immediately before and
after the modification using the Black Scholes Option Pricing Model and the weighted average assumptions indicated in the table
below. We recognized the additional fair value, $13,000, as warrant modification expense, included as a component of general and
administrative expenses, in our Condensed Consolidated Statement of Operations and Comprehensive Loss for the quarter ended
December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.14</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.14</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.32</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.58</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.12</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.12</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.85</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.85</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98.7</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98.7</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">178,572</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">178,572</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Weighted average fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.64</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.71</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Warrants Outstanding</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Following the warrant issuances in the December
2017 Public Offering, the September 2017 Public Offering, and in our self-placed private placement transactions and the warrant
modifications and exercises described above, at December 31, 2017, we had outstanding warrants to purchase shares of our common
stock at a weighted average exercise price of $2.80 per share as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Warrants</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Exercise</b></font></td>
<td style="vertical-align: bottom"><font style="font-size: 8pt"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Outstanding at</b></font></td>
<td style="vertical-align: bottom"><font style="font-size: 8pt"> </font></td>
</tr>
<tr>
<td style="vertical-align: bottom"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Price</b></font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Expiration</b></font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>December 31,</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>per Share</b></font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1.5pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b> Date</b></font></td>
<td> </td>
<td style="padding-bottom: 1.5pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">0.001</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/6/2022</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">314,776</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1.50</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/30/2021 to 12/13/2022</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10,150,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/6/2022 to 3/7/2023</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,388,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">523,573</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.51</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/31/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">4.50</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/26/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">25,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">5/16/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">6.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/26/2019 to 11/30/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">97,750</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">8.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">3/25/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">185,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/15/2017 to 1/11/2020</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">20,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">20.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/15/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">110,448</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">16,918,292</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Of the warrants outstanding at December 31,
2017, 2,705,883 shares of common stock underlying the warrants exercisable at $5.30 per share issued in our May 2016 public offering,
1,388,931 shares of common stock underlying the warrants exercisable at $1.82 per share issued in our September 2017 Public Offering
and 10,000,000 shares of common stock underlying the warrants exercisable at $1.50 per share issued in our December 2017 Public
Offering are registered for resale by the warrant holders. At December 31, 2017, warrants to purchase an aggregate of 314,776 registered
shares of our common stock remain subject to down round anti-dilution protection features. The common shares issuable upon exercise
of our remaining outstanding warrants are unregistered.  All of the outstanding warrants are exercisable by the holders only by payment in cash of the stated
exercise price per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cato Holding Company (<i>CHC</i>), doing business
as Cato BioVentures (<i>CBV</i>), is the parent of Cato Research Ltd. (<i>CRL</i>). CRL is a contract research, development and
regulatory services organization (<i>CRO</i>) recently engaged by us for a wide range of material aspects related to the nonclinical
and clinical development and regulatory affairs associated with our efforts to develop and commercialize AV-101 for MDD and other
potential CNS indications. CBV is among our largest institutional stockholders at December 31, 2017, holding approximately 4.2%
of our outstanding common stock. In October 2012, we issued certain unsecured promissory notes in the aggregate principal amount
of approximately $1.3 million to CBV and CRL (the <i>Cato Notes</i>) as payment in full for all contract research and development
services and regulatory advice previously rendered to us by CRL for nonclinical and Phase 1 development of AV-101. In June
2015, the Cato Notes and additional amounts payable to CRL for CRO services related to AV-101 were extinguished in exchange for
our issuance of an aggregate of 328,571 shares of Series B Preferred stock to CBV, which shares of Series B Preferred stock were
automatically converted in accordance with their terms into an equal number of registered shares of our common stock as a result
of our May 2016 public offering.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2017, we entered into a Master Services
Agreement (<i>MSA</i>) with CRL, which replaced a substantially similar May 2007 master services agreement, pursuant to which CRL
may assist us in the evaluation, development, commercialization and marketing of our potential product candidates, including AV-101,
and provide regulatory and strategic consulting services as requested from time to time. Specific projects or services are and
will be delineated in individual work orders negotiated from time-to-time under the MSA. Under the terms of work orders issued
pursuant to the July 2017 MSA and our May 2007 master services agreement with CRL, we incurred expenses of $292,700 and $101,900
during the quarters ended December 31, 2017 and 2016, respectively, and $904,900 and $180,100 in the nine-month periods ended December
31, 2017 and 2016, respectively. During the nine months ended December 31, 2017, we have issued an aggregate of 350,000 unregistered
shares of our common stock to CRL under the terms of certain work orders for current and future CRO services relating to our development
of AV-101 for MDD, the fair value of which represented approximately $443,000 of the reported CRO expense for the nine months then
ended. We anticipate periodic expenses for CRO services from CRL related to nonclinical and clinical development of, and regulatory
affairs related to, AV-101 and other potential product candidates will increase in future periods. In December 2017, we executed
a work order with CRL for CRO services to be performed in conducting the AV-101 MDD Phase 2 Adjunctive Treatment Study and pursuant
to which we became immediately obligated for an initial payment of $461,700, which amount is reflected in Accrued liabilities and
Prepaid expenses in our Condensed Consolidated Balance Sheet at December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">We have evaluated subsequent events through February 9, 2018 and
have identified the following matters requiring disclosure:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Exercise of Warrants</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2018, the holders of Series A2 warrants
to purchase an aggregate of 314,774 shares of our common stock exercised all of such warrants at the reset exercise price of $0.001
per share, as described in Note 7, <i>Capital Stock</i>, from which we received nominal cash proceeds. Following these exercises, none of our outstanding warrants have down round anti-dilution protection features.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Grant of Options from 2016 Plan</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 2, 2018, the Compensation Committee
of the Board approved the grant of options to independent members of the Board, officers and employees and certain professional
service providers to purchase an aggregate of 2,150,000 shares of our common stock at an exercise price of $1.16 per share, the
quoted closing price of our common stock on the Nasdaq Capital Markets on the date of the grant. The options are vested 25% upon
grant with the remaining shares vesting ratably over the next twenty-four months.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the 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 from those estimates.  Significant estimates include
those relating to share-based compensation, and assumptions that have been used historically to value warrants and warrant modifications.
With the exception of the $1.25 million of sublicense revenue recorded in the quarter ended December 31, 2016 under the BlueRock
Agreement, we do not currently have, nor have we had during the periods covered by this report, any arrangements requiring the
recognition of revenue.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses are composed
of both internal and external costs. Internal costs include salaries and employment-related expenses of our scientific personnel
and direct project costs. External research and development expenses consist primarily of costs associated with nonclinical and
clinical development of AV-101, now in Phase 2 clinical development, initially for MDD, stem cell technology-related research and
development costs, and costs related to the filing, maintenance and prosecution of patents and patent applications, technology
licenses and protection of other intellectual property. All such costs are charged to expense as incurred.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We recognize compensation cost for all stock-based
awards to employees or consultants based on the grant date fair value of the award. Non-cash stock-based compensation expense is
recognized over the period during which the employee or consultant is required to perform services in exchange for the award, which
generally represents the scheduled vesting period. We have no awards with market or performance conditions. For equity awards to
non-employees, we re-measure the fair value of the awards as they vest and the resulting change in value is recognized as an expense
during the period over which the services are performed.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine
months ended December 31, 2017 and 2016.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Three
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31, </b></font></p></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Nine
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31,</b></font></p></td>
<td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">689,300</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">267,200</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,386,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">573,900</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2017, our Board approved the grant
of options to purchase an aggregate of 880,000 shares of our common stock at an exercise price of $1.96 per share to the independent
members of our Board, our officers and our employees. In September 2017, our stockholders approved an amendment to our 2016 Amended
and Restated Stock Incentive Plan (the <i>2016 Plan</i>) to increase the number of shares issuable thereunder from 3.0 million
shares to 10.0 million shares. Following that approval, our Board authorized the grant of options to purchase an aggregate of 770,000
shares of our common stock at an exercise price of $1.56 per share to the independent members of our Board, our officers, employees
and certain consultants. We valued the options granted in April 2017 and September 2017 using the Black-Scholes Option Pricing
Model and the following weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">April 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.02</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.99</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.48</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.70</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.24</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">92.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">880,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">770,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.42</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.20</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, our Board approved the grant of
options to purchase an aggregate of 655,000 shares of our common stock at an exercise price of $3.49 per share to the independent
members of our Board and to our officers, including our then-newly-hired Chief Medical Officer. In September 2016, the Board approved
the grant of an option to purchase 125,000 shares of our common stock at an exercise price of $4.27 per share to another then-newly-hired
officer. We valued the options granted in June 2016 and September 2016 using the Black-Scholes Option Pricing Model and the following
weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">June 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.34</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.68</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.25</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">81.69</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.26</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">655,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">125,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>2.50</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>3.05</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2017, there were stock options
outstanding to purchase 3,279,871 shares of our common stock at a weighted average exercise price of $3.23 per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 9, <i>Subsequent Events</i>, for information
regarding option grants made during February 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have no components of other comprehensive
loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic net income (loss) per share of common
stock excludes the effect of dilution and is computed by dividing net income (loss) by the weighted-average number of shares of
common stock outstanding for the period. Diluted net income (loss) per share of common stock reflects the potential dilution that
could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common
stock.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for the periods
presented, potentially dilutive securities were excluded from the computation of net loss per share, as their effect would be antidilutive.
For the three and nine-month periods ended December 31, 2017 and 2016, the accrual for dividends on our Series B 10% Convertible
Preferred Stock (<i>Series B Preferred</i>) is treated as a deduction from our net loss to arrive at net loss attributable to common
stockholders for those periods. Additionally, in 2017, the deemed dividend attributable to the trigger of the down round provision
feature, and, in 2016, the deemed dividend attributable to our sale and issuance of Series B Preferred Units, each consisting of
one share of Series B Preferred and a five-year warrant to purchase one share of our common stock for $7.00, each represent further
deductions from our net loss to arrive at net loss attributable to common stockholders for those periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Potentially dilutive securities excluded in
determining diluted net loss attributable to common stockholders per common share are as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of December 31,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3,279,871</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,659,324</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,918,292</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,550,370</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">24,426,415</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">10,437,946</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We do not use derivative instruments for hedging
of market risks or for trading or speculative purposes. We carried no assets or liabilities at fair value at December 31, 2017
or March 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Except as described below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2017, as compared
to the recent accounting pronouncements described in our Form 10-K for the fiscal year ended March 31, 2017, that are of significance
or potential significance to us.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2017, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 2017-11, “Earnings Per Share (Topic 260); Distinguishing
Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Part I: Accounting for Certain Financial Instruments
with Down Round Features; Part II: Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain
Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (<i>ASU 2017-11</i>).
Part I of this ASU provides that an entity will no longer have to consider “down round” features (i.e., a provision
in an equity-linked financial instrument, such as a free-standing warrant, or an embedded feature, such as a conversion option
in a convertible instrument, that reduces the exercise price of such instrument if the entity subsequently sells stock for a lower
price or issues an equity-linked instrument with a lower exercise price) when determining whether certain equity-linked financial
instruments or embedded features are indexed to its own stock. The definition of a down round feature in ASU 2017-11 excludes standard
anti-dilution provisions related to changes in an entity’s capital structure. Accounting Standards Codification Topic 815-40,
“Derivatives and Hedging–Contracts in Entity’s Own Equity” (<i>ASC 815-40</i>) requires that a freestanding
equity-linked financial instrument be indexed to the issuer’s own stock to be classified as equity. An equity-linked embedded
feature that meets the definition of a derivative may avoid bifurcation and derivative accounting if it is indexed to the issuer’s
own stock. Under the terms of prior guidance, a freestanding financial instrument or embedded feature was not considered indexed
to the issuer’s own stock if it had a down round provision. Consequently, the freestanding financial instrument was classified
as a liability (or asset), and if it met the definition of a derivative, was measured at fair value with changes in fair value
recorded through earnings. Similarly, an embedded feature was bifurcated and separately accounted for as a derivative if it met
all other criteria for bifurcation under ASC 815-40. The bifurcated embedded feature was also measured at fair value through earnings.
Under the provisions of ASU 2017-11, an entity that presents earnings per share (<i>EPS</i>) under Accounting Standards Codification
Topic 260, “Earnings Per Share” will recognize the effect of a down round feature in a freestanding equity-classified
financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a
reduction to income available to common shareholders in basic EPS. The new guidance requires new disclosures for financial instruments
with down round features and other terms that change conversion or exercise prices. Part I of ASU 2017-11 is effective for fiscal
years beginning after December 15, 2018, and interim periods therein, however early adoption is permitted. We early-adopted ASU
2017-11 effective with our quarter ended September 30, 2017 and applied its guidance to certain of the warrants issued in the September
2017 Public Offering, as described more completely in Note 7, <i>Capital Stock</i>. No retrospective adjustments to our financial
statements were required as a result of our adoption of ASU 2017-11.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU No. 2016-2,
“Leases.” This ASU requires substantially all leases, including operating leases, to be recognized by lessees on their
balance sheet as a right-of-use asset and corresponding lease liability. This ASU is effective for our interim and annual reporting
periods beginning April 1, 2019 and early adoption is permitted. We are currently evaluating the impact that the adoption of this
ASU will have on our financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No. 2016-09,
“Improvements to Employee Share-Based Payment Accounting,” which simplified several aspects of the accounting for share-based
payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold
to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting
policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and
clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer
withholds shares for tax-withholding purposes. This ASU became effective for our interim and annual reporting periods beginning
April 1, 2017, and the adoption of this standard did not have a material impact on our financial statements. Pursuant to our adoption
of this standard, we elected to account for the impact of option forfeitures as they occur.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2017, our Board approved the grant
of options to purchase an aggregate of 880,000 shares of our common stock at an exercise price of $1.96 per share to the independent
members of our Board, our officers and our employees. In September 2017, our stockholders approved an amendment to our 2016 Amended
and Restated Stock Incentive Plan (the <i>2016 Plan</i>) to increase the number of shares issuable thereunder from 3.0 million
shares to 10.0 million shares. Following that approval, our Board authorized the grant of options to purchase an aggregate of 770,000
shares of our common stock at an exercise price of $1.56 per share to the independent members of our Board, our officers, employees
and certain consultants. We valued the options granted in April 2017 and September 2017 using the Black-Scholes Option Pricing
Model and the following weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">April 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2017</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.96</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.56</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.02</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.99</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.48</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.70</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.24</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">92.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">880,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">770,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.42</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.20</b></font></td>
<td> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, our Board approved the grant of
options to purchase an aggregate of 655,000 shares of our common stock at an exercise price of $3.49 per share to the independent
members of our Board and to our officers, including our then-newly-hired Chief Medical Officer. In September 2016, the Board approved
the grant of an option to purchase 125,000 shares of our common stock at an exercise price of $4.27 per share to another then-newly-hired
officer. We valued the options granted in June 2016 and September 2016 using the Black-Scholes Option Pricing Model and the following
weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">June 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">September 2016</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">4.27</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.34</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.29</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.68</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">6.25</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">81.69</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">83.26</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">655,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">125,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>2.50</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>3.05</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin-top: 0; margin-bottom: 0"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of December 31,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3,279,871</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,659,324</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,918,292</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,550,370</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">24,426,415</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">10,437,946</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> December 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">770,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">352,800</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Insurance</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">72,300</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">85,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">48,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">11,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">23,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">940,400</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">456,600</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> December 31,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">565,700</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">402,400</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">37,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued compensation</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">105,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">770,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">443,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">  <b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>March 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Balance</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Balance</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Interest</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">7.95% and 8.25% Notes payable to insurance</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 40%"><font style="font-size: 8pt">premium financing company (current)</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 0%; border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="width: 7%; border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total notes payable to unrelated parties</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">43,700</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">54,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">less: current portion</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(43,700</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(43,700</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(54,800</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(54,800</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Net non-current portion</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">-</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended September 30, 2017,
our Board of Directors (<i>Board</i>) authorized the modification of outstanding warrants issued in private placement transactions
between March 2017 and June 2017 to reduce the exercise prices and increase the number of shares issuable thereunder. We calculated
the fair value of the warrant immediately before and after the modification using the Black Scholes Option Pricing Model and the
weighted average assumptions indicated in the table below. We recognized the additional fair value, $279,700, as warrant modification
expense, included as a component of general and administrative expenses, in our Condensed Consolidated Statement of Operations
and Comprehensive Loss for the quarter ended September 30, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.54</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.54</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.99</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.62</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1.62</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.62</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.62</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">95.5</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">95.5</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">247,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">495,001</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Weighted average fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.71</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.92</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended December 31, 2017,
the Board authorized the modification of outstanding warrants issued in private placement transactions between August 2017 and
November 2017 to reduce the exercise prices of the warrants. We calculated the fair value of the warrants immediately before and
after the modification using the Black Scholes Option Pricing Model and the weighted average assumptions indicated in the table
below. We recognized the additional fair value, $13,000, as warrant modification expense, included as a component of general and
administrative expenses, in our Condensed Consolidated Statement of Operations and Comprehensive Loss for the quarter ended
December 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-modification</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.14</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.14</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.32</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.58</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.12</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.12</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.85</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">3.85</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98.7</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">98.7</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">178,572</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">178,572</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Weighted average fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.64</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.71</b></font></td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Pre-reset</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Post-reset</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.17</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">1.17</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">0.001</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.09</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.09</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Remaining contractual term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4.73</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">4.73</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97.8</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97.8</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">0.0</font></td>
<td><font style="font-size: 8pt">%</font></td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Number of warrant shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">503,641</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">503,641</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Fair value per share</b></font></td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>0.77</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 8pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 8pt"><b>1.17</b></font></td>
<td> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Warrants</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Exercise</b></font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Outstanding at</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Price</b></font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Expiration</b></font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>December 31,</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>per Share</b></font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1.5pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b> Date</b></font></td>
<td> </td>
<td style="padding-bottom: 1.5pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">0.001</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/6/2022</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">314,776</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1.50</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/30/2021 to 12/13/2022</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10,150,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/6/2022 to 3/7/2023</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,388,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">523,573</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.51</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/31/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">4.50</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/26/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">25,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">5/16/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">6.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/26/2019 to 11/30/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">97,750</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">8.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">3/25/2021</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">185,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/15/2017 to 1/11/2020</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">20,000</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">20.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">9/15/2019</font></td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">110,448</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">16,918,292</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
61400000
17600000
1.96
3.49
1.56
4.27
1.96
3.49
1.56
4.27
0.0202
0.0134
0.0199
0.0129
0.0162
0.0162
.0212
.0212
.0209
.0209
P6Y5M23D
P6Y8M5D
P6Y8M12D
P6Y3M
P3Y7M13D
P3Y7M13D
P3Y10M6D
P3Y10M6D
P4Y8M23D
P4Y8M23D
0.8324
0.8169
0.9229
0.8326
0.9550
0.9550
.9870
.9870
.9780
.9780
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.000
0.0000
0.0000
880000
655000
770000
125000
1.42
2.50
1.20
3.05
24426415
10437946
3279871
1659324
16918292
4550370
0
4800
37000
97100
0
0
0
0
9/6/2022
11/30/2021 to 12/13/2022
9/6/2022 to 3/7/2023
4/30/2021
12/31/2021
9/26/2019
5/16/2021
9/26/2019 to 11/30/2019
12/11/2018 to 3/3/2023
3/25/2021
11/15/2017 to 1/11/2020
9/15/2019
0.001
1.500
1.820
2.000
3.510
4.500
5.300
6.000
7.000
8.000
10.000
20.000
16918292
314776
10150000
1388931
523573
50000
25000
2705883
97750
1346931
185000
20000
110448
1.54
1.54
1.14
1.14
1.17
1.17
3.99
2.00
2.32
1.58
1.82
.001
0.71
0.92
.64
.71
.77
1.17
54800
43700
43700
54800
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Three
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31, </b></font></p></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b> Nine
Months Ended</b></font></p>
<p style="margin-top: 0; margin-bottom: 0"><font style="font-size: 8pt"><b>December 31,</b></font></p></td>
<td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">299,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">113,900</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">627,400</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">239,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">390,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">153,300</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">759,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">334,000</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">689,300</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">267,200</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,386,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">573,900</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended
Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015
Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016