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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 differentiated from all FDA-approved antidepressants, as well as all atypical antipsychotics often used adjunctively
to augment them. We believe AV-101 also has potential as a new treatment alternative for several additional CNS indications, including
epilepsy, Huntington’s disease, levodopa (<i>L-DOPA</i>)-induced dyskinesia associated with Parkinson’s disease, and
as a non-opioid treatment for neuropathic pain. </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 low dose ketamine hydrochloride injection (<i>ketamine</i>),
an NMDA receptor antagonist, 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, have demonstrated robust antidepressant effects
in these MDD patients within twenty-four hours of a single sub-anesthetic dose of ketamine 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 and other negative side effects.
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 GlyB 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">Pursuant to our Cooperative Research and Development
Agreement (<i>CRADA</i>) with the NIMH and Dr. Zarate, the NIMH is funding, and Dr. Zarate, as Principal Investigator, and his
team are conducting, a small Phase 2 clinical study of AV-101 monotherapy in subjects with treatment-resistant MDD (the <i>NIMH
AV-101 MDD Phase 2 Monotherapy Study</i>). We are preparing 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 of MDD in adult patients
with an inadequate response to standard, FDA-approved antidepressants (the <i>AV-101 MDD Phase 2 Adjunctive Treatment Study</i>).  Dr.
Maurizio Fava, Professor of Psychiatry at Harvard Medical School and Director, Division of Clinical Research, Massachusetts General
Hospital (<i>MGH</i>) Research Institute, will be the Principal Investigator of our AV-101 MDD Phase 2 Adjunctive Treatment Study.  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 New England Journal of Medicine (<i>NEJM</i>) and the Journal of
the American Medical Association (<i>JAMA</i>). We currently anticipate completing our AV-101 MDD Phase 2 Adjunctive Treatment
Study by the end of 2018 with top line results available in the first quarter of 2019.</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., a California corporation
dba VistaStem Therapeutics (<i>VistaStem</i>), is our wholly-owned subsidiary focused on applying human pluripotent stem cell (<i>hPSC</i>)
technology, internally and with third-party collaborators, to discover, rescue, develop and commercialize (i) proprietary new chemical
entities (<i>NCEs</i>), including small molecule NCEs with regenerative potential, for CNS and other diseases and (ii) cellular
therapies involving stem cell-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 regenerative medicine (<i>RM</i>) applications of our cardiac stem cell technology, in December 2016, VistaStem
exclusively sublicensed to BlueRock Therapeutics LP, a next generation regenerative medicine company established in 2016 by Bayer
AG and Versant Ventures, 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 its exclusive sublicense agreement with BlueRock
Therapeutics, VistaStem may pursue additional collaborations and potential RM applications of its stem cell technology platform,
including using blood, cartilage, and/or liver cells derived from hPSCs, for (i) cell-based therapy, (ii) cell repair therapy,
and/or (iii) 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 months ended June 30, 2107 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 $144.3 million accumulated from inception (May 1998) through June 30, 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 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, and potential RM programs related to VistaStem’s
technology platform.</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 June 30,
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 $45.5 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 $30.8 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 Cooperative Research and Development Agreement (<i>CRADA)</i> with the
NIH, substantial ongoing Phase 2 clinical development activities relating to AV-101 as a potential new generation
antidepressant 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: 0; text-align: justify">At June 30, 2017, we had a cash and cash equivalents
balance of $1.6 million. This amount was not sufficient to enable us to fund our planned operations, including expected cash expenditures
of approximately $12 million for the twelve months following the issuance of these financial statements, including expenditures
required to launch and satisfy a significant portion of the projected expenses associated with our proposed AV-101 MDD Phase 2
Adjunctive Treatment Study.</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 limited cash position at June 30, 2017 considered
with our recurring and anticipated losses and negative cash flows from operations make it probable, in the absence of additional
financing, that we will not be able to meet our obligations as they come due within one year from the date of this Report, raising
substantial doubt that we can continue as a going concern. However, to alleviate that doubt, we plan, as we have numerous times
in the past, to raise additional financing when and as needed, primarily through the sale of our equity securities in one or more
private placements to accredited investors or public offerings. Additionally, we have filed a Registration Statement on Form S-3
(Registration No. 333-215671) (the <i>S-3 Registration Statement</i>) that has been declared effective by the Securities and Exchange
Commission (the <i>Commission</i>) to cover our potential future sale of our equity securities in one or more public offerings
from time to time. As of the date of this Report, we have not yet sold any securities under the S-3 Registration Statement, nor
do we have an obligation to do so. Further, at June 30, 2017, we had a limited number of unallocated or unreserved shares of our
common stock available for issuance in future offerings or for other purposes. To facilitate potential future issuances and sales
of our equity securities for ordinary corporate finance and general corporate purposes, our Board of Directors (<i>Board</i>) has
approved an amendment to our Restated and Amended Articles of Incorporation to increase the number of shares of common stock available
for issuance thereunder from 30 million shares to 100 million shares, an amount our Board has determined is customary and appropriate
for a Nasdaq-listed, clinical-stage biopharmaceutical company. Before taking effect, this amendment must be approved by a majority
of our stockholders at our 2017 annual meeting of stockholders in September 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">In addition to the sale of our equity securities,
we may also seek to enter 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 for other potential 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 our stockholders will authorize the issuance of additional shares of our common stock to facilitate further financing
opportunities and for other general corporate purposes, or that 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 later in 2017 and beyond, 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 months
ended June 30, 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> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 8pt"><b> Three Months Ended</b></font></td>
<td> </td></tr>
<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> June 30,</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><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></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><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">191,400</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">44,000</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">191,400</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">44,000</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></tr>
<tr style="vertical-align: bottom">
<td><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">175,600</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">63,900</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">175,600</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">63,900</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 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">107,900</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></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 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 $3.49 per share to the independent members of our Board and to our
officers, including our then-newly-hired Chief Medical Officer. We valued the options granted in April 2017 and June 2016 using
the Black-Scholes Option Pricing Model and the following weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>April 2017</b></font></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</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">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</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">3.49</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">1.34</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">6.68</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">81.69</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">655,000</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>2.50</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"><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"> </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-month periods ended June 30, 2017 and 2016, the accrual for dividends on our Series B 10% Convertible Preferred Stock
(<i>Series B Preferred</i>) and 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, represent 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 style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">  <b>As of June 30, </b>    </font></td>
<td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </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: 1pt"> </td>
<td style="padding-bottom: 1pt"> </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: 1pt"> </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> </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> </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">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">1,247,740</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">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> </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">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">2,522,593</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">986,987</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">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">4,796,506</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">4,606,480</font></td>
<td style="padding-bottom: 1.5pt"> </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">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">9,909,219</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">____________</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></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </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"><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 June 30, 2017 or March 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"><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 three months ended June 30, 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 February 2016, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 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. As part of the 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 June 30, 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> June 30,</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"> Insurance</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">189,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">85,800</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">274,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">352,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">22,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">11,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">12,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">498,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">456,600</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Accrued expenses are composed of the following at June 30, 2017 and
March 31, 2017:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued professional services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">139,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">37,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">59,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">402,400</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">204,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt 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; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">The following table summarizes our unsecured promissory notes at
June 30, 2017 and March 31, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2017</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Principal</td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Principal</td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Total</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Total</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 22%; font-size: 8pt; text-align: left">7.95% and 8.25% Notes payable to insurance</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8pt; text-align: left">premium financing company (current)</td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">165,500</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">—  </td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">165,500</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">54,800</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">—  </td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">54,800</td><td style="font-size: 8pt; text-align: left"> </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 $128,600 at June 30,
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 is payable in monthly installments of $6,300, including principal and interest, and had an outstanding balance
of $36,900 at June 30, 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in Private
Placement</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 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 this self-placed private placement transaction, of which the entire amount 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</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"><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 self-placed
private placement described above, at June 30, 2017, we had outstanding warrants to purchase shares of our common stock at a weighted
average exercise price of $6.19 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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </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"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Outstanding</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>at June 30,</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="border-bottom: Black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>per
Share</b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"><b> Date</b></font></td>
<td style="padding-bottom: 1pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"><b> 2017</b></font></td>
<td style="padding-bottom: 1pt"> </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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 2%"> </td>
<td style="vertical-align: bottom; width: 1%"><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 style="vertical-align: bottom; width: 2%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td style="vertical-align: bottom; width: 2%"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.96</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">43,750</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.98</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">25,125</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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">4.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">178,625</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">5/16/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/15/2017 to 1/11/2020</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">24,394</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">30.00</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/20/2017</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
</tr>
<tr>
<td colspan="2" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="border-bottom: Black 1.5pt solid"> </td>
<td style="text-align: right; border-bottom: Black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> 4,796,506</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">With the exception of 2,705,883 shares of common stock underlying
the warrants exercisable at $5.30 per share issued in our May 2016 public offering, all of the common shares issuable upon exercise
of our outstanding warrants are unregistered.</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">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 certain material aspects of the development and regulatory
affairs associated with Phase 2 development of AV-101 for MDD. CBV is among our largest institutional stockholders at June 30,
2017, holding approximately 6.5% 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 preclinical 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">Under the terms of our contract research arrangement
with CRL related to the development of AV-101, we incurred expenses of $128,200 and $50,400 for the three months ended June 30,
2017 and 2016, respectively. We anticipate periodic expenses for CRO services from CRL related to Phase 2 development of AV-101
will increase in future 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">See Note 9, <i>Subsequent Events</i>, for disclosure
of additional transactions with CRL.</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"><font style="font-size: 8pt">We have evaluated subsequent events
through August 11, 2017 and have identified the following matters requiring disclosure:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-size: 8pt"><b><i>Master Services Agreement and
Share Issuance to CRL</i></b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In July 2017,
we entered into a Master Services Agreement (<i>MSA</i>) with CRL, which replaced a similar May 2007 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
will be delineated in individual work orders negotiated from time-to-time under the MSA.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt">In July 2017,
we issued to CRL 50,000 shares of our unregistered common stock having a fair value of $85,500 on the date of issuance in recognition
of a milestone achievement under the terms of a negotiated AV-101-related work order.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b><i>Private
Placement of Common Stock and Warrants </i></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"><b> </b></font></p>
<p style="font: 10pt/107% Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">In August
2017, in a self-placed private placement transaction, we sold to an accredited investor units consisting of (i) 28,572 shares
of our unregistered common stock and (ii) 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 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.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></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"> </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 months
ended June 30, 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> </td>
<td> </td>
<td colspan="6" style="text-align: center"><font style="font-size: 8pt"><b> Three Months Ended</b></font></td>
<td> </td></tr>
<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> June 30,</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><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></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><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">191,400</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">44,000</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">191,400</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">44,000</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></tr>
<tr style="vertical-align: bottom">
<td><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">175,600</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">63,900</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">175,600</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">63,900</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 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">107,900</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></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 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 $3.49 per share to the independent members of our Board and to our
officers, including our then-newly-hired Chief Medical Officer. We valued the options granted in April 2017 and June 2016 using
the Black-Scholes Option Pricing Model and the following weighted average assumptions:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>April 2017</b></font></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</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">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</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">3.49</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">1.34</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">6.68</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">81.69</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">655,000</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>2.50</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">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"> </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-month periods ended June 30, 2017 and 2016, the accrual for dividends on our Series B 10% Convertible Preferred Stock
(<i>Series B Preferred</i>) and 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, represent 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 style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt"><b>  As of June 30, </b>    </font></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></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> </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> </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">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">1,247,740</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">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> </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">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">2,522,593</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">986,987</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">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">4,796,506</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">4,606,480</font></td>
<td style="padding-bottom: 1.5pt"> </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">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">9,909,219</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">____________</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></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </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">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 June 30, 2017 or March 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">Except as described below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during the three months ended June 30, 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 February 2016, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 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. As part of the 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>
<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="6" style="text-align: center"><font style="font-size: 8pt"><b> Three Months Ended</b></font></td>
<td> </td></tr>
<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> June 30,</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><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></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><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">191,400</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">44,000</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">191,400</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">44,000</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></tr>
<tr style="vertical-align: bottom">
<td><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">175,600</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">63,900</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">175,600</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">63,900</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 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">107,900</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>April 2017</b></font></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td style="padding-bottom: 1.5pt"><b> </b></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; text-align: justify"><font style="font-size: 8pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</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">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">3.49</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 8pt">$</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">3.49</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">1.34</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">6.68</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">81.69</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">655,000</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>2.50</b></font></td>
<td> </td></tr>
</table>
<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"><font style="font-size: 8pt"><b>  As of June 30, </b>    </font></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></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> </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> </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">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">1,247,740</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">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> </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">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">2,522,593</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">986,987</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">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">4,796,506</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">4,606,480</font></td>
<td style="padding-bottom: 1.5pt"> </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">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">9,909,219</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">____________</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></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr>
<td colspan="3" style="vertical-align: bottom; text-align: justify"><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>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </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> June 30,</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"> Insurance</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">189,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">85,800</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">274,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">352,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">22,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">11,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">12,200</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">498,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">456,600</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued professional services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">139,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">37,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">59,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">402,400</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">204,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">443,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2017</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Principal</td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Principal</td><td style="font-size: 8pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Total</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid">Total</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 22%; font-size: 8pt; text-align: left">7.95% and 8.25% Notes payable to insurance</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 10%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8pt; text-align: left">premium financing company (current)</td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">165,500</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">—  </td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">165,500</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">54,800</td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">—  </td><td style="font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt"> </td>
<td style="font-size: 8pt; text-align: left">$</td><td style="font-size: 8pt; text-align: right">54,800</td><td style="font-size: 8pt; text-align: left"> </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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </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"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>Outstanding</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt"><b>at June 30,</b></font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><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"><font style="font: 8pt Times New Roman, Times, Serif"><b> Date</b></font></td>
<td style="padding-bottom: 1.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1.5pt; text-align: center"><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"><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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 2%"> </td>
<td style="vertical-align: bottom; width: 1%"><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 style="vertical-align: bottom; width: 2%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td style="vertical-align: bottom; width: 2%"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.96</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">43,750</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">3.98</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">25,125</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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">4.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">4/30/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">178,625</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">5/16/2021</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/15/2017 to 1/11/2020</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">24,394</font></td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font-size: 8pt">$</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 style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </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; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">30.00</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">11/20/2017</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,600</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
</tr>
<tr>
<td colspan="2" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="border-bottom: Black 1.5pt solid"> </td>
<td style="text-align: right; border-bottom: Black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> 4,796,506</font></td>
<td> </td>
</tr>
</table>
45500000
30800000
3.49
1.96
3.49
1.96
.0134
.0202
P6Y8M5D
P6Y5M23D
.8169
.8324
0.00
0.00
655000
880000
2.50
1.42
11547351
9909219
2522593
986987
4796506
4606480
85800
189200
352800
274500
11600
22100
6400
12200
456000
498000
37000
139200
402400
59000
3600
67000
165500
54800
0
0
165500
54800
3.51
3.96
3.98
4.00
4.50
5.30
6.00
7.00
8.00
10.00
20.00
30.00
12/31/2021
4/30/2021
4/30/2021
4/30/2021
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
11/20/2017
4796506
50000
43750
25125
178625
25000
2705883
97750
1346931
185000
24394
110448
3600
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