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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Overview</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VistaGen Therapeutics, Inc. (NASDAQ: VTGN),
a Nevada corporation, is a clinical-stage biopharmaceutical company dedicated to developing and commercializing innovative product
candidates for patients with diseases and disorders involving the central nervous system (<i>CNS</i>). Our principal executive
offices are located at 343 Allerton Avenue, South San Francisco, California 94080, and our telephone number is (650)
577-3600. Our website address is <i>www.vistagen.com</i>. Unless the context otherwise requires, the words “<i>VistaGen Therapeutics,
Inc.</i>” “<i>VistaGen</i>,” “<i>we</i>,” “<i>the Company</i>,” “<i>us</i>”
and “<i>our</i>” refer to VistaGen Therapeutics, Inc., a Nevada corporation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our lead product candidate, AV-101, is a new
generation, oral antidepressant drug candidate in Phase 2 development for the adjunctive treatment of 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>).  We believe AV-101 may also have therapeutic potential in chronic neuropathic pain, epilepsy, Huntington’s
disease and Parkinson’s disease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">AV-101’s mechanism of action, as an N-methyl
D aspartate receptor (<i>NMDAR</i>) antagonist binding selectively at the glycine binding (<i>GlyB</i>) co-agonist site of the
NMDAR, is fundamentally differentiated from all FDA-approved antidepressants, as well as all atypical antipsychotics used to augment
standard antidepressant therapy.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our ongoing Phase 2a clinical study of AV-101
in subjects with treatment-resistant MDD is being fully funded by the U.S. National Institute of Mental Health (<i>NIMH</i>) under
our February 2015 Cooperative Research and Development Agreement (<i>CRADA</i>) with the NIMH, and is being conducted 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. The first patient in this NIMH-sponsored Phase 2a study was dosed in November 2015. Previous
NIMH studies, including studies conducted by Dr. Zarate, have focused on the antidepressant effects of low dose, intravenous (<i>I.V.</i>)
ketamine in patients with treatment-resistant depression. These NIMH studies, as well as clinical research by others, have demonstrated
robust antidepressant effects in patients with treatment-resistant MDD within twenty-four hours of a single low dose of I.V. ketamine.
We believe orally administered AV-101 may have potential to deliver ketamine-like fast-acting antidepressant effects without ketamine’s
serious side effects.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We are preparing to launch our Phase 2b clinical
study of AV-101 for the adjunctive treatment of MDD in patients with an inadequate response to standard, FDA-approved antidepressants.  We
currently anticipate commencement of this multi-center, multi-dose, double blind, placebo-controlled Phase 2b efficacy and safety
study in the first half of 2017. 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 Phase
2b study of AV-101 in MDD.  Dr. Fava was the co-Principal Investigator with Dr. A. John Rush of the largest clinical
trial conducted in depression to date, the STAR*D study, whose findings were published in journals such the New England Journal
of Medicine (<i>NEJM</i>) and the Journal of the American Medical Association (<i>JAMA</i>). We currently anticipate top line
results in this Phase 2b study in the third calendar quarter of 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to clinical development of AV-101,
we are advancing potential commercial applications of our human pluripotent stem cell (<i>hPSC</i>) technology platform, including
drug rescue and regenerative medicine (<i>RM</i>).  Our small molecule drug rescue programs involve using CardioSafe 3D,
our customized cardiac bioassay system, to develop new chemical entities (<i>NCEs</i>) for our internal pipeline.  Potential
RM applications include using blood, cartilage, heart and/or liver cells derived from hPSCs for (A) cell-based therapy, (B) cell
repair therapy, and/or (C) tissue engineering.  We may pursue these drug rescue and RM applications in collaboration with
third-parties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>AV-101 and Major Depressive Disorder</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <br />
<i>Background</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The World Health Organization (<i>WHO</i>) estimates
that 350 million people worldwide are affected by depression. According to the U.S. National Institutes of Health (<i>NIH</i>)
major depression is one of the most common mental disorders in the U.S. The NIMH reports that, in 2014, an estimated 15.7 million
adults aged 18 or older in the U.S. had at least one major depressive episode in the past year. This represented 6.7 percent of
all U.S. adults. According to the U.S. Centers for Disease Control and Prevention (<i>CDC</i>) one in 10 Americans over the age
of 12 takes an antidepressant medication.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Most standard, FDA-approved antidepressants
target neurotransmitter reuptake inhibition – either serotonin (<i>SSRIs</i>) or serotonin/norepinephrine (<i>SNRIs</i>).
Even when effective, these standard depression medications take many weeks to achieve adequate antidepressant effects. Nearly two
out of every three drug-treated depression patients, including an estimated 6.9 million drug-treated MDD patients in the U.S.,
obtain inadequate therapeutic benefit from initial treatment with a standard antidepressant. Unfortunately, even after treatment
with as many as four different standard antidepressants, nearly one out of every three drug-treated depression patients do not
achieve adequate therapeutic benefits.  Such depression patients often seek to treat their depression with non-drug-related
approaches, such as Electroconvulsive Therapy (<i>ECT</i>), or to augment their inadequate response to standard antidepressants
by adding an atypical antipsychotic (such as, for example, aripiprazole) to their treatment regimen, despite the modest potential
therapeutic benefit and significant risk of additional side effects with such augmentation options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All standard antidepressants have risks of significant
side effects, including, among others, potentially anxiety, metabolic syndrome, sleep disturbance and sexual dysfunction.  They
also have a “Black Box” warning due to risks of worsening depression and suicide in certain groups. Use of atypical
antipsychotics to augment inadequately performing standard antidepressants increases the risk of serious side effects, including,
potentially, tardive dyskinesia, significant weight gain, diabetes and heart disease, while offering only a modest potential increase
in therapeutic benefit. Use of ECT increases the risk of serious side effects, including, headaches, tiredness, disorientation,
intense sleepiness, hallucinations and long-term memory loss.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>AV-101</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">AV-101, our oral new generation antidepressant
drug candidate, is in Phase 2 clinical development for the adjunctive treatment of MDD patients with an inadequate response to
standard antidepressants. As published in the October 2015 issue of the peer-reviewed, <i>Journal of Pharmacology and Experimental
Therapeutics, </i>in an article entitled, <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 the NMDAR antagonist
ketamine. In the same preclinical studies, a standard antidepressant, the SSRI fluoxetine, did not induce rapid onset antidepressant-like
responses. In addition, these studies confirmed that the fast-acting antidepressive effects of AV-101 were mediated through the
GlyB site and involved the activation of a key neurological pathway, the alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid<b> (</b><i>AMPA</i>)
receptor pathway. Activation of the AMPA receptor pathway is a common feature of fast-acting antidepressants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Following the completion of our NIH-funded,
randomized, double blind, placebo-controlled Phase 1a and Phase 1b safety studies, we are now collaborating with the NIMH in a
Phase 2a study. Under our February 2015 CRADA, the NIMH is funding, and Dr. Carlos Zarate Jr. of the NIMH as Principal Investigator
is conducting, our ongoing Phase 2a efficacy and safety study of AV-101 in subjects with treatment-resistant MDD. The trial is
expected to enroll 20 to 28 patients.  The first patient was dosed in November 2015, and we currently anticipate receiving
topline results in the second quarter of 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We are preparing to launch our Phase 2b clinical
study of AV-101 for the adjunctive treatment of MDD in patients with an inadequate response to standard, FDA-approved antidepressants.
We anticipate the launch of this Phase 2b study, with Dr. Maurizio Fava of Harvard Medical School serving as Principal Investigator,
in the first half of 2017. We anticipate top line results from this Phase 2b study in the third calendar quarter of
2018.  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Several preclinical studies support the hypothesis
that AV-101 also has the potential to treat multiple CNS disorders and neurodegenerative diseases in addition to depression, including
chronic neuropathic pain, epilepsy, Parkinson’s disease and Huntington’s disease, where modulation of the NMDAR, AMPA
pathway and/or active metabolites of AV-101 may achieve therapeutic benefit.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CardioSafe 3D™; NCE Drug Rescue and
Regenerative Medicine</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>CardioSafe</i> 3D™ is our
customized <i>in vitro</i> cardiac bioassay system capable of predicting potential human heart toxicity of small molecule
NCEs <i>in vitro</i>, long before they are ever tested in animal and human studies. Our current strategic interests involving
our stem cell technology platform include (i) advancing current internal efforts focused on <i>CardioSafe</i> 3D drug
rescue to expand our drug candidate pipeline with selected proprietary small molecule NCEs, leveraging substantial prior research
and development investments by pharmaceutical companies and others related to public domain NCEs terminated before FDA approval
due to heart toxicity risks and (ii) establishing collaborative arrangements with qualified third-parties focused on RM applications,
including (A) cell-based therapy (injection of stem cell-derived mature organ-specific cells obtained through directed differentiation),
(B) cell repair therapy (induction of regeneration by biologically active molecules administered alone or produced by infused genetically
engineered cells), or (C) tissue engineering (transplantation of <i>in vitro</i> grown complex tissues), involving hPSC-derived
blood, bone, cartilage, heart and/or liver cells. We may collaborate with one or more third-parties in connection with these potential
commercial applications of our stem cell technology platform.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Subsidiaries</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VistaGen Therapeutics, Inc., a California corporation
(<i>VistaGen California</i>), is our wholly-owned subsidiary. Our Condensed Consolidated Financial Statements in this Report also
include the accounts of VistaGen California’s two wholly-owned 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">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, 2016 has been derived from our audited consolidated financial statements at that date but does not include
all disclosures required by U.S. GAAP.  The operating results for the three and six months ended September 30, 2016 are not
necessarily indicative of the operating results to be expected for our fiscal year ending March 31, 2017 or for any other interim
period or any other future 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 the fiscal year ended March 31, 2016 contained in our Annual Report on Form 10-K, as filed with the Securities
and Exchange Commission (<i>SEC</i>) on June 24, 2016.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared assuming we will continue as a going concern. As a developing-technology 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 $136.8 million accumulated from inception through September 30, 2016. We expect
losses and negative cash flows from operations to continue for the foreseeable future as we engage in further potential development
of AV-101 and launch and execute our drug rescue programs and pursue potential drug development and regenerative medicine opportunities.</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">Since our inception in May 1998 through September
30, 2016, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and
debt securities, including convertible promissory notes and short-term promissory notes, for cash proceeds of approximately $44.3
million, as well as from an aggregate of approximately $16.4 million of government research grant awards, strategic collaboration
payments and other revenues. Additionally, we have issued equity securities with an approximate value at issuance of $30.1 million
in non-cash settlements of certain liabilities, including liabilities for professional services rendered to us or as compensation
for such services.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt">Between April
1, 2016 and May 4, 2016, we sold to accredited investors Series B Preferred Units consisting of 39,714 unregistered shares of
our Series B Preferred Stock, par value $0.001 per share (<i>Series B Preferred</i>), and five year warrants to purchase 39,714
shares of our common stock, from which we received cash proceeds of $278,000. Further, on May 16, 2016 we consummated an underwritten
public offering pursuant to which we issued an aggregate of 2,570,040 registered shares of our common stock at the public
offering price of $4.24 per share and five-year warrants to purchase up to 2,705,883 registered shares of common stock, with
an exercise price of $5.30 per share, at the public offering price of $0.01 per warrant, including shares and warrants issued
pursuant to the exercise of the underwriters' over-allotment option (the <i>May 2016 Public Offering</i>). We received net
cash proceeds of approximately $9.5 million from the May 2016 Public Offering after deducting fees and expenses. We believe that
we currently have sufficient financial resources to fund our expected operations through the first half of 2017, including preparation
for and launch of our AV-101 Phase 2b study in MDD.  Although our current financial resources are not yet sufficient to complete
our AV-101 Phase 2b study when launched, we anticipate raising sufficient additional capital through sales of our securities in
2017 to satisfy our key corporate objectives, including completion of our AV-101 Phase 2b study in 2018. There can be no assurance,
however, that future financing will be available in sufficient amounts, in a timely manner, or on terms acceptable to us, if at
all. We may also seek research and development collaborations that could generate revenue, as well as government grant awards.
Further, strategic collaborations, such as our February 2015 CRADA with the NIMH providing for the NIMH to fund our Phase 2a study
of AV-101 in MDD, may provide non-dilutive resources to advance our strategic initiatives while reducing a portion of our future
cash outlays and working capital requirements. Although we may seek additional collaborations that could generate revenue, as
well as new government grant awards, no assurance can be provided that any such collaborations or awards will occur in the future.
 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
of AV-101 as a treatment for MDD and other CNS conditions, and our stem cell technology platform, the availability of, and our
ability to obtain, government grant awards and our ability to enter into collaborations on terms acceptable to us. To further
advance the clinical development of AV-101 and 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, accounting, public company compliance and other professional services and working capital costs. </font></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, substantial additional
financing may not be available to us on a timely basis, on acceptable terms, or at all. If we are unable to obtain substantial
additional financing on a timely basis in the near term, 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.  These unaudited Condensed Consolidated Financial Statements
do not include any adjustments that might result from the outcome of this uncertainty.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Use of Estimates</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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 to value warrants, warrant modifications, warrant
liabilities. 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: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Research and Development Expenses</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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 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 Major Depressive Disorder, stem cell technology-related
research and development costs, and costs related to the filing, maintenance and prosecution of patents and patent applications.
All such costs are charged to expense as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Stock-Based Compensation</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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 value is recognized as an expense during
the period over which the services are performed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six
months ended September 30, 2016 and 2015.</p>
<p style="font: 10pt 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: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Research and development expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; font-size: 10pt; text-align: left"> Stock option grants</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">82,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">31,900</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">126,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">47,400</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Warrants granted to officer in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5,700</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Warrants granted to officer in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">82,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">887,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">126,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">905,300</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> General and administrative expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Stock option grants</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">116,800</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">9,100</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">180,700</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">16,100</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers and directors <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">      in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">7,800</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers, directors and <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1pt">      consultants in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">116,800</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,853,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">180,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,864,600</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"> Total stock-based compensation expense</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">198,800</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,740,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">306,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,769,900</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, our Board of Directors (the <i>Board</i>)
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 newly-hired Chief Medical Officer. In September
2016, the Board approved the grant of an option to purchase 125,000 shares of our common stock at an exercise price of $4.27 per
share to another newly-hired officer. At September 30, 2016, there were stock options outstanding to purchase 1,100,643 shares
of our common stock at a weighted average exercise price of $5.26 per share. We valued the options granted in June 2016 and September
2016 using the Black-Scholes Option Pricing Model and the following weighted average assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 10pt"><b>Assumption:</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>September</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: justify"><font style="font-size: 10pt">Market price per share at grant date</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">3.49</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">4.27</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"><font style="font-size: 10pt">Exercise price per share</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">3.49</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">4.27</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Risk-free interest rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.34</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1.29</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"><font style="font-size: 10pt">Contractual or estimated term in years</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">6.68</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">6.25</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify"><font style="font-size: 10pt">Volatility</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">81.69</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">83.26</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"><font style="font-size: 10pt">Dividend rate</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.0</font></td>
<td><font style="font-size: 10pt">%</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">0.0</font></td>
<td><font style="font-size: 10pt">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Shares</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">655,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">125,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"><b>Fair Value per share</b></font></td>
<td> </td>
<td><font style="font-size: 10pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 10pt"><b>2.50</b></font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt"><b>$</b></font></td>
<td style="text-align: right"><font style="font-size: 10pt"><b>3.05</b></font></td>
<td> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During September 2015, our Board approved
the grant of options to purchase an aggregate of 90,000 shares of our common stock at an exercise price of $9.25 per share to
our non-officer employees and certain consultants. The Board also granted immediately vested warrants to purchase an aggregate
of 650,000 shares of our common stock to our executive officers, independent members of our Board and certain consultants. We
valued the warrants and options granted in September 2015 using the Black-Scholes Option Pricing Model and the following assumptions: </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Assumption:</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Warrants</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Employee Options</b></font></td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Non-employee Options</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; width: 49%; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Market price per share at grant date </font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 14%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: top; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Exercise price per share </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.52%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.02%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.20%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Contractual or estimated term in years </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Volatility </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">77.19%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">79.48%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">103.42%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend rate</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Shares</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">650,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">60,000</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value per share</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>5.68</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>6.35</b></font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>8.27</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
</table>
<p style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Comprehensive Loss</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Income (Loss) per Common Share</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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. In calculating diluted net income (loss) per share, we have historically adjusted the numerator for the change in the fair
value of the warrant liability attributable to outstanding warrants, only if dilutive, and increased the denominator to include
the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method. The
change in the fair value of the warrant liability, which was eliminated in May 2015, had no impact on the diluted net earnings
per share calculation in any period included in these unaudited Condensed Consolidated Financial Statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for the periods
presented, potentially dilutive securities were excluded from the computation of net loss per share, as their effect would be antidilutive.
For the three and six month periods ended September 30, 2016 and 2015, the accrual for dividends on our Series B Preferred and
the deemed dividend attributable to the issuance of our Series B Preferred Units represent deductions from our net loss to arrive
at net loss attributable to common stockholders for those periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>As of September 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: 10pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>2015</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; background-color: rgb(204,238,255)">
<td style="width: 76%"><font style="font-size: 10pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">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: 10pt">750,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3,426,523</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Outstanding options under the 2008 and 1999 Stock Incentive Plans</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,100,643</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">296,738</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Outstanding warrants to purchase common stock</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">4,678,414</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">4,687,211</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">Warrant shares issuable to PLTG upon exchange of Series A Preferred</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; background-color: White">
<td><font style="font-size: 10pt">    under the terms of the October 11, 2012 Note Exchange and Purchase</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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">    Agreement, as subsequently amended</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: 10pt">-</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: 10pt">535,715</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<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; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt">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: 10pt">10,007,309</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: 10pt">9,696,187</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 10pt">____________</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: top; background-color: White">
<td colspan="9"><font style="font-size: 10pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with PLTG, as amended</font></td></tr>
<tr style="vertical-align: top; background-color: White">
<td colspan="9"><font style="font-size: 10pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top; background-color: White">
<td colspan="9"><font style="font-size: 10pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Recent Accounting Pronouncements</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Other than as identified below, there have been
no recent accounting pronouncements or changes in accounting pronouncements during the six months ended September 30, 2016, as
compared to the recent accounting pronouncements described in the Company’s Form 10-K for the fiscal year ended March 31,
2016, that are of significance or potential significance to the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2016, the Financial Accounting Standards
Board issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified
in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) debt prepayment or debt
extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that
are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after
a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life
insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7)
beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle.
The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted.
The guidance requires retrospective adoption. We are evaluating the effect that ASU No. 2016-15 will have on our consolidated financial
statements and related disclosures.</p> <p style="font: 10pt 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In conjunction with certain Senior Secured Convertible
Promissory Notes that we issued to Platinum Long Term Growth VII, LLC (<i>PLTG</i>) between October 2012 and July 2013 and the
related PLTG Warrants, and the contingently issuable Series A Exchange Warrant, we determined that the warrants included certain
exercise price and other adjustment features requiring the warrants to be treated as liabilities, which were recorded at their
issuance-date estimated fair values and marked to market at each subsequent reporting period. We determined the fair value of the
warrant liabilities using Level 3 (unobservable) inputs, since there was minimal comparable external market data available.
Inputs used to determine fair value included the remaining contractual term of the warrants, risk-free interest rates, expected
volatility of the price of the underlying common stock, and the probability of a financing transaction that would trigger a reset
in the warrant exercise price, and, in the case of the Series A Exchange Warrant, the probability of PLTG’s exchange of the
shares of Series A Preferred it holds into shares of common stock. The change in the fair value of these warrant liabilities between
March 31, 2015 and their subsequent elimination (described below) was recognized as a non-cash expense in the Condensed Consolidated
Statement of Operations and Comprehensive Loss for the three months ended June 30, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 12, 2015, we entered into an agreement
with PLTG pursuant to which PLTG agreed to amend the PLTG Warrants to (i) fix the exercise price thereof at $7.00 per share, (ii)
eliminate the exercise price reset features and (iii) fix the number of shares of our common stock issuable thereunder.  This
agreement and the related modification of the PLTG Warrants resulted in the elimination of the warrant liability with respect
to the PLTG Warrants during the quarter ended June 30, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2016, we entered into an Exchange
Agreement with PLTG pursuant to which PLTG exchanged all outstanding PLTG Warrants plus the shares issuable pursuant to the Series
A Preferred Exchange Warrant for unregistered shares of our Series C Convertible Preferred Stock (<i>Series C Preferred</i>) in
the ratio of 0.75 share of Series C Preferred for each warrant share cancelled.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We carried no assets or liabilities at fair
value at September 30, 2016 or March 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Prepaid expenses and other current assets are composed of the following
at September 30, 2016 and March 31, 2016:</p>
<p style="font: 10pt 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: 10pt"><b> September 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt"><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: 10pt"><b> 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><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; background-color: rgb(204,238,255)">
<td style="width: 76%"><font style="font-size: 10pt"> Insurance</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">94,900</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">27,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 10pt"> Prepaid compensation under financial advisory</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; background-color: White">
<td><font style="font-size: 10pt">     and other consulting agreements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">550,800</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">337,500</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"> Public offering expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">57,400</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 10pt"> Technology license fees and 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: 10pt">3,200</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: 10pt">4,900</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<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: 10pt Times New Roman, Times, Serif; margin: 0">Accrued expenses are composed of the following at September 30, 2016
and March 31, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </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: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">September 30,</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">March 31,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 56%; font-size: 10pt; text-align: left"> Accrued professional services</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">133,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">318,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Accrued AV-101 development expenses</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">662,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">186,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Accrued compensation</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">310,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">795,000</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">814,000</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The following table summarizes our unsecured promissory notes at
September 30, 2016 and March 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">  <b>September 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">  <b>March 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </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: 10pt">Balance</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: 10pt">Interest</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: 10pt">Total</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: 10pt">Balance</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: 10pt">Interest</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: 10pt">Total</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>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; padding-bottom: 2.5pt"><font style="font-size: 10pt"> 5.75% Note payable to insurance premium financing company (current)</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">71,100</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">71,100</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"> 7.0% Note payable to Progressive Medical Research</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">58,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">12,000</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">70,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font-size: 10pt"> less: current portion</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(31,600</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(12,000</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(43,600</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt"> 7.0% Notes payable - non-current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 10pt"> Total notes payable to unrelated parties</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">71,100</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">71,100</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">58,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">12,000</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">70,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"> less: current portion</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: 10pt">(71,100</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">-</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: 10pt">(71,100</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(31,600</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(12,000</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(43,600</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Net non-current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Between May 2015 and August 2015, we extinguished
the outstanding balances of approximately $17,200,000 of indebtedness, including all senior secured promissory notes and a substantial
portion of other indebtedness that was either due and payable or would have become due and payable prior to March 31, 2016, by
converting such indebtedness into shares of our Series B Preferred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Evaluating each converted note or debt class
separately, we determined that the conversion of each of such notes and other debt instruments into Series B Preferred should be
accounted for as an extinguishment of debt. Because the fair value of the Series B Preferred into which the debt instruments were
converted in all cases exceeded the carrying value of the debt, we recorded an aggregate non-recurring non-cash loss on extinguishment
of debt of $26,700,200, in our fiscal year ended March 31, 2016, of which $25,050,900 was recorded in the quarter ended June 30,
2015, and the remaining $1,649,300 was recorded in the quarter ended September 30, 2015, as reflected in the accompanying Consolidated
Statement of Operations and Comprehensive Loss for that period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 5, 2016, we paid in full the
$33,300 outstanding balance (principal and accrued but unpaid interest) of the promissory note previously issued to the
University of California in connection with our collaborative research and development relationship with the University of
California at Davis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 13, 2016, we paid in full the $71,600
outstanding balance (principal and accrued but unpaid interest) of the promissory note we issued to Progressive Medical Research
(<i>PMR</i>) in connection with our clinical development relationship with PMR.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2016, we executed a promissory note in
the face amount of $117,500 in connection with certain insurance policy premiums. The note is payable in monthly installments of
$12,100, including principal and interest, through March 2017, and the remaining balance of such note as of September 30, 2016
was $71,100.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Series B Preferred Unit Offering</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April and May 2016, in self-placed private
placement transactions, we sold to accredited investors an aggregate of $278,000 of units in our Series B Preferred Unit offering,
which units consist of Series B Preferred and Series B Warrants (together <i>Series B Preferred Units</i>). We issued 39,714 shares
of Series B Preferred and Series B Warrants to purchase 39,714 shares of our common stock.  Through the termination of
the Series B Preferred Unit offering in May 2016, we received an aggregate of $5,303,800 in cash proceeds from our self-placed
private placement and sale of the Series B Preferred Units.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We allocated the proceeds from the sale of the
Series B Preferred Units during April and May 2016 to the Series B Preferred and the Series B Warrants based on their relative
fair values on the dates of the sales. We determined that the fair value of a share of Series B Preferred was equal to the quoted
market value of a share of our common stock on the date of a Series B Preferred Unit sale. We calculated the fair value of the
Series B Warrants using the Black Scholes Option Pricing Model and the weighted average assumptions indicated in the table below.
The table below also presents the aggregate allocation of the Series B Preferred Unit sales proceeds based on the relative fair
values of the Series B Preferred and the Series B Warrants as of their respective Series B Preferred Unit sales dates. The difference
between the relative fair value per share of the Series B Preferred, approximately $4.20 per share, and its Conversion Price (or
stated value) of $7.00 per share represents a deemed dividend to the purchasers of the Series B Preferred Units. Accordingly, we
have recognized a deemed dividend in the aggregate amount of $111,100 in arriving at net loss attributable to common stockholders
in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Loss for the six months ended September 30,
2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="35" style="font-size: 12pt; text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"> </font><font style="font-size: 8pt">Unit Warrants</font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; padding-bottom: 1pt">Aggregate Allocation of</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="23" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average Issuance Date Valuation Assumptions</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Per Share</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Aggregate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Aggregate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; padding-bottom: 1pt">Proceeds Based on</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Warrant</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Risk free</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Fair</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Fair Value</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Proceeds</td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Relative Fair Value of:</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center">Shares</td><td> </td>
<td colspan="3" style="text-align: center">Market</td><td> </td>
<td colspan="3" style="text-align: center">Exercise</td><td> </td>
<td colspan="3" style="text-align: center">Term</td><td> </td>
<td colspan="3" style="text-align: center">Interest</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3" style="text-align: center">Dividend</td><td> </td>
<td colspan="3" style="text-align: center">Value of</td><td> </td>
<td colspan="3" style="text-align: center">of Unit</td><td> </td>
<td colspan="3" style="text-align: center">of Unit</td><td> </td>
<td colspan="3" style="text-align: center">Unit</td><td> </td>
<td colspan="3" style="text-align: center">Unit</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Issued</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">(Years)</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Rate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Volatility</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Rate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrant</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrants</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Stock</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrant</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"> </td><td style="width: 6%; 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: 6%; 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: 6%; 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: 6%; 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: 6%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right">39,714</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.45</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">7.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.27</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">78.43</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.0</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5.63</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">223,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">278,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">166,900</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">61,100</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>May 2016 Public Offering and NASDAQ Uplisting</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective on May 16, 2016, we consummated an
underwritten public offering of our securities, pursuant to which we issued an aggregate of 2,570,040 registered shares of our
common stock at a public sales price of $4.24 per share and five-year warrants exercisable at $5.30 per share to purchase an aggregate
of 2,705,883 shares of our common stock at a public sales price of $0.01 per warrant share, including shares and warrants issued
in June 2016 pursuant to the exercise of the underwriters’ over-allotment option (the <i>May 2016 Public Offering</i>). We
received gross proceeds of approximately $10.9 million and net proceeds of approximately $9.5 million from the May 2016 Public
Offering, after deducting underwriters’ commissions and other offering expenses. The warrants issued in the May 2016 Public
Offering have no anti-dilution or other exercise price or share reset features, except as is customary with respect to a change
in the Company’s capital structure in the event of a stock split or dividend, and, accordingly, we have accounted for them
as equity warrants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The securities included in the May 2016 Public
Offering Warrants were offered, issued and sold under a prospectus filed with the Securities and Exchange Commission (<i>SEC</i>)
pursuant to an effective registration statement (<i>Registration Statement</i>) filed with the SEC on Form S-1 (File No. 333-210152)
pursuant to the Securities Act of 1933, as amended (<i>Securities Act</i>). The Registration Statement was first filed with the
SEC on March 14, 2016, and was declared effective on May 10, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the completion of our May
2016 Public Offering, our common stock was approved for listing on The NASDAQ Capital Market, and began trading under the symbol
“VTGN” on May 11, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Conversion of Series B Preferred into
Common Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During April 2016, prior to the May 2016 Public
Offering, holders of an aggregate of 7,500 shares of Series B Preferred voluntarily converted such shares into an equivalent number
of registered shares of our common stock.  In connection with such conversions, we issued an aggregate of 510 shares
of our unregistered common stock as payment in full of $4,000 in accrued dividends on the Series B Preferred that was voluntarily
converted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 19, 2016, upon the consummation of the
May 2016 Public Offering, an aggregate of 2,403,051 shares of Series B Preferred were automatically converted into an aggregate
of 2,192,847 registered shares of our common stock and an aggregate of 210,204 shares of our unregistered common stock. Additionally,
we issued an aggregate of 416,806 shares of our unregistered common stock as payment in full of $1,642,100 in accrued dividends
on the Series B Preferred that was automatically converted, at the rate of one share of common stock for each $3.94 of accrued
Series B Preferred dividends.  On June 15, 2016, pursuant to the underwriters’ exercise of their over-allotment
option, an additional 44,500 shares of Series B Preferred were converted into 44,500 shares of our registered common stock.  We
issued an additional 9,580 shares of our unregistered common stock as payment in full of $37,400 in accrued dividends on the Series
B Preferred that was automatically converted, at the rate of one share of common stock for each $3.90 in accrued dividends.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2016, one of the remaining holders
of our Series B Preferred voluntarily converted 87,500 shares of Series B Preferred into an equivalent number of registered shares
of our common stock.  In connection with this conversion, we issued 26,258 shares of our unregistered common stock as
payment in full of $85,300 in accrued dividends on the Series B Preferred that was voluntarily converted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In September 2016, we issued an aggregate of
170,000 shares of our unregistered common stock having an aggregate fair value on the date of issuance of $737,800 to various professional
services providers. Of that amount, we issued 120,000 shares having a fair value of $520,800 on the date of issuance for services
to be rendered from October 2016 to December 2016. The value of these shares has been recorded as a prepaid expense at September
30, 2016 and will be expensed during the quarter ended December 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Modification of Warrants</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Between April 1, 2016 and May 4, 2016, we entered
into Warrant Exchange Agreements with certain holders of outstanding warrants to purchase an aggregate of 41,469 shares of our
common stock pursuant to which the holders agreed to the cancellation of such warrants in exchange for the issuance of an aggregate
of 31,238 shares of our unregistered common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We accounted for the exchange of these warrants
as warrant modifications, comparing their fair value prior to the exchange with the fair value of the common stock issued. We calculated
the weighted average fair value of the warrants prior to the exchange to be $5.37 per share, or $223,700, using the Black Scholes
Option Pricing Model and the following weighted average assumptions: market price per share: $8.44; exercise price per share: $7.37;
risk-free interest rate: 1.23%; remaining contractual term: 4.77 years; volatility: 79.0%; and expected dividend rate: 0%. 
The weighted average fair value of the aggregate of 31,238 shares of common stock issued in the exchange was $8.45 per share or
$264,000.  Accordingly, we recognized the additional fair value, $40,300, as warrant modification expense, included as
a component of general and administrative expenses in our Condensed Consolidated Statement of Operations and Comprehensive
Loss for the quarter ended June 30, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2016, we entered into Warrant Exchange
Agreements with holders of outstanding warrants to purchase an aggregate of 20,000 shares of our common stock pursuant to which
the holders agreed to the cancellation of such warrants in exchange for the issuance of an aggregate of 15,000 shares of our unregistered
common stock. We likewise accounted for the exchange of these warrants as warrant modifications. We calculated the weighted average
fair value of the warrants prior to the exchange to be $1.64 per share, or $32,900, using the Black Scholes Option Pricing Model
and the following weighted average assumptions: market price per share: $3.33; exercise price per share: $8.00; risk-free interest
rate: 1.10%; remaining contractual term: 4.58 years; volatility: 87.0%; and expected dividend rate: 0%.  The weighted average
fair value of the aggregate of 15,000 shares of common stock issued in the exchange was $3.33 per share or $50,000.  Accordingly,
we recognized the additional fair value, $17,100, as warrant modification expense, included as a component of general and administrative
expenses in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Loss for the quarter ended September
30, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Warrants Outstanding</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Following the warrant issuances in the May 2016
Public Offering, the Series B Warrant issuances and the warrant exchanges described above, at September 30, 2016, we had outstanding
warrants to purchase shares of our common stock at a weighted average exercise price of $6.44 per share as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">Exercise Price</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center"></td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">Shares Subject to Purchase at</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">per Share</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"><b>Expiration</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"><b> September 30, 2016</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 26%; font-size: 10pt; text-align: right">4.50</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 26%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/26/2019</font></td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 26%; font-size: 10pt; text-align: right">25,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">5.30</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">5/16/2021</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,705,883</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">6.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/26/2019</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">75,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">7.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">12/11/2018 to 3/3/2023</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,417,125</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">8.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">3/25/2021</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">210,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">10.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">8/31/2016 to 1/11/2020</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">131,358</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">20.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/15/2019</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,448</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">30.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">11/20/2017</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,600</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; border-bottom: Black 1pt solid"> </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"></td><td style="font-size: 10pt; text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4,678,414</font></td><td style="text-align: left"><font style="font-size: 10pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">With the exception of 2,705,883 shares of common stock underlying
the warrants issued in the May 2016 Public Offering, all of the common shares underlying our outstanding warrants are unregistered.</p> <p style="font: 10pt 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>) engaged by us for certain aspects of the development of AV-101. CBV is among our
largest institutional stockholders at September 30, 2016, holding approximately 7.5% of our outstanding common stock. Shawn Singh,
our Chief Executive Officer and member of our Board of Directors, served as Managing Principal of CBV and Chief Business Officer
and General Counsel of CRL from February 2001 to August 2009. On October 10, 2012, we issued to CBV an unsecured promissory note
in the principal amount of $310,400 (the <i>2012 CBV Note</i>) and a five-year warrant to purchase 12,500 restricted shares of
our common stock at a price of $30.00 per share (the <i>CBV Warrant</i>).  Additionally, on October 10, 2012, we issued
to CRL: (i) an unsecured promissory note in the initial principal amount of $1,009,000, payable solely in restricted shares
of our common stock and which accrued interest at the rate of 7.5% per annum, compounded monthly (the <i>CRL Note</i>), as
payment in full for all contract research and development services and regulatory advice rendered to us by CRL through December
31, 2012 with respect to CRO services, including regulatory strategy and preclinical and clinical development of AV-101, and (ii) a
five-year warrant to purchase, at a price of $20.00 per share, 50,450 restricted shares of our common stock, such number of
shares to be adjusted in relation to accrued interest on the CRL Note (<i>CRL Warrant</i>). The Cato Notes and additional amounts
payable to CRL for CRO services were extinguished in June 2015 in exchange for our issuance of an aggregate of 328,571 shares of
Series B Preferred to CBV, which shares of Series B Preferred were automatically converted into an equal number of registered shares
of our common stock in connection with the May 2016 Public Offering. CBV also participated in our February 2016 warrant exchange,
exchanging the CBV Warrant and the CRL Warrant, as adjusted to reflect accrued interest, for an aggregate of 54,894 shares of our
unregistered common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under the terms of our CRO arrangement with
CRL related to the development of AV-101, we incurred expenses of $27,800 and $10,900 for the quarters ended September 30, 2016
and 2015, respectively, and $78,200 and $22,100 in the six month periods ended September 30, 2016 and 2015, respectively. Total
interest expense, including amortization of note discount, on the notes payable to CBV and CRL was $28,200 for the three-month
period ended June 30, 2015 during which the notes were extinguished.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">We have evaluated subsequent events through November 11, 2016 and
have identified the following matters requiring disclosure:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i>Warrants Exchanged for Common Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In October 2016, we entered into a Warrant Exchange
Agreement with a holder of outstanding warrants to purchase 113,944 shares of our common stock pursuant to which the holder agreed
to cancel such warrants in exchange for the issuance of 85,458 restricted shares of our common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i>Issuance of Common Stock for Professional Services</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Effective November 1, 2016, we issued 25,000 shares of our unregistered
common stock as partial compensation for investor relations, market awareness and other services.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i>Stock Option Grants</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">Effective November 9, 2016, our Board authorized the grant
of stock options to purchase an aggregate of 560,000 shares of our common stock pursuant to our Amended and Restated 2016
Stock Incentive Plan. Options were granted to independent members of our Board and our officers and employees. The ten-year
options are exercisable at $3.80 per share and vest over a period of three years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Lease Extension</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective November 10, 2016, we entered into
an amendment to the lease of our headquarters facility, pursuant to which the term of the lease was extended from July 31, 2017
to July 31, 2022 and the base rent under the lease for the five-year extension period was specified. A copy of the amended lease
is attached to this Quarterly Report on Form 10-Q.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> <p style="font: 10pt 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 to value warrants, warrant modifications, warrant
liabilities. 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: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt 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 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 Major Depressive Disorder, stem cell technology-related
research and development costs, and costs related to the filing, maintenance and prosecution of patents and patent applications.
All such costs are charged to expense as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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 value is recognized as an expense during
the period over which the services are performed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six
months ended September 30, 2016 and 2015.</p>
<p style="font: 10pt 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: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Research and development expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; font-size: 10pt; text-align: left"> Stock option grants</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">82,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">31,900</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">126,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">47,400</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Warrants granted to officer in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5,700</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Warrants granted to officer in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">82,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">887,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">126,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">905,300</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> General and administrative expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Stock option grants</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">116,800</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">9,100</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">180,700</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">16,100</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers and directors <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">      in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">7,800</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers, directors and <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1pt">      consultants in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">116,800</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,853,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">180,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,864,600</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"> Total stock-based compensation expense</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">198,800</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,740,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">306,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,769,900</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, our Board of Directors (the <i>Board</i>)
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 newly-hired Chief Medical Officer. In September
2016, the Board approved the grant of an option to purchase 125,000 shares of our common stock at an exercise price of $4.27 per
share to another newly-hired officer. At September 30, 2016, there were stock options outstanding to purchase 1,100,643 shares
of our common stock at a weighted average exercise price of $5.26 per share. We valued the options granted in June 2016 and September
2016 using the Black-Scholes Option Pricing Model and the following weighted average assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Assumption:</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>September</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; font-size: 10pt; text-align: justify">Market price per share at grant date</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">3.49</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">4.27</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Exercise price per share</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">3.49</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">4.27</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Risk-free interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1.34</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1.29</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Contractual or estimated term in years</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6.68</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6.25</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: justify">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">81.69</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83.26</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Dividend rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.0</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Shares</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">655,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">125,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; font-weight: bold">Fair Value per share</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="font-size: 10pt; font-weight: bold; text-align: right">2.50</td><td style="font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="font-size: 10pt; font-weight: bold; text-align: right">3.05</td><td style="font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During September 2015, our Board approved the
grant of options to purchase an aggregate of 90,000 shares of our common stock at an exercise price of $9.25 per share to our non-officer
employees and certain consultants. The Board also granted immediately vested warrants to purchase an aggregate of 650,000 shares
of our common stock to our executive officers, independent members of our Board and certain consultants. We valued the warrants
and options granted in September 2015 using the Black-Scholes Option Pricing Model and the following assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Assumption:</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Warrants</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Employee Options</b></font></td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Non-employee Options</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; width: 49%; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Market price per share at grant date </font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 14%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: top; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Exercise price per share </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.52%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.02%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.20%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Contractual or estimated term in years </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Volatility </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">77.19%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">79.48%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">103.42%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend rate</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Shares</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">650,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">60,000</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value per share</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>5.68</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>6.35</b></font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>8.27</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> <p style="font: 10pt 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: 10pt 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. In calculating diluted net income (loss) per share, we have historically adjusted the numerator for the change in the fair
value of the warrant liability attributable to outstanding warrants, only if dilutive, and increased the denominator to include
the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method. The
change in the fair value of the warrant liability, which was eliminated in May 2015, had no impact on the diluted net earnings
per share calculation in any period included in these unaudited Condensed Consolidated Financial Statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for the periods
presented, potentially dilutive securities were excluded from the computation of net loss per share, as their effect would be antidilutive.
For the three and six month periods ended September 30, 2016 and 2015, the accrual for dividends on our Series B Preferred and
the deemed dividend attributable to the issuance of our Series B Preferred Units represent deductions from our net loss to arrive
at net loss attributable to common stockholders for those periods.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt 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: 10pt 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: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of September 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; font-size: 10pt; text-align: left">Series A Preferred stock issued and outstanding (1)</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 12%; font-size: 10pt; text-align: right">750,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 12%; font-size: 10pt; text-align: right">750,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Series B Preferred stock issued and outstanding (2)</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,160,240</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,426,523</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Series C Preferred stock issued and outstanding (3)</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,318,012</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Outstanding options under the 2008 and 1999 Stock Incentive Plans</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,100,643</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">296,738</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Outstanding warrants to purchase common stock</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4,678,414</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">4,687,211</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Warrant shares issuable to PLTG upon exchange of Series A Preferred</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">    under the terms of the October 11, 2012 Note Exchange and Purchase</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">    Agreement, as subsequently amended</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">535,715</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Total</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">10,007,309</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">9,696,187</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with PLTG, as amended</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">(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</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">(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</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
</table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Other than as identified below, there have been
no recent accounting pronouncements or changes in accounting pronouncements during the six months ended September 30, 2016, as
compared to the recent accounting pronouncements described in the Company’s Form 10-K for the fiscal year ended March 31,
2016, that are of significance or potential significance to the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2016, the Financial Accounting Standards
Board issued guidance to reduce the diversity in the presentation of certain cash receipts and cash payments presented and classified
in the statement of cash flows. The guidance addresses the following eight specific cash flow issues: (1) debt prepayment or debt
extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that
are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after
a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from settlement of corporate-owned life
insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7)
beneficial interests in securitization transitions and (8) separately identifiable cash flows and application of predominance principle.
The guidance will be effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted.
The guidance requires retrospective adoption. We are evaluating the effect that ASU No. 2016-15 will have on our consolidated financial
statements and related disclosures.</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: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Three Months Ended</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center">Six Months Ended</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Research and development expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; font-size: 10pt; text-align: left"> Stock option grants</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">82,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">31,900</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">126,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 10%; font-size: 10pt; text-align: right">47,400</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Warrants granted to officer in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5,700</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Warrants granted to officer in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">852,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">82,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">887,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">126,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">905,300</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> General and administrative expense:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Stock option grants</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">116,800</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">9,100</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">180,700</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">16,100</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers and directors <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">      in March 2014</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,900</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">7,800</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">  Warrants granted to officers, directors and <br /></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1pt">      consultants in September 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,840,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">116,800</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,853,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">180,700</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,864,600</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 2.5pt"> Total stock-based compensation expense</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">198,800</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,740,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">306,700</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,769,900</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>As of September 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: 10pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 10pt"><b>2015</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: 10pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">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: 10pt">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: 10pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">3,426,523</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: 10pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">-</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: 10pt">Outstanding options under the 2008 and 1999 Stock Incentive Plans</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,100,643</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">296,738</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: 10pt">Outstanding warrants to purchase common stock</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">4,678,414</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">4,687,211</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: 10pt">Warrant shares issuable to PLTG upon exchange of Series A Preferred</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: 10pt">    under the terms of the October 11, 2012 Note Exchange and Purchase</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: 10pt">    Agreement, as subsequently amended</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: 10pt">-</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: 10pt">535,715</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: 10pt">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: 10pt">10,007,309</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: 10pt">9,696,187</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 10pt">____________</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>
</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 style="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Assumption:</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>June</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>September</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; font-size: 10pt; text-align: justify">Market price per share at grant date</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">3.49</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">4.27</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Exercise price per share</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">3.49</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">4.27</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Risk-free interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1.34</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1.29</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Contractual or estimated term in years</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6.68</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">6.25</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: justify">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">81.69</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">83.26</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: justify">Dividend rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.0</td><td style="font-size: 10pt; text-align: left">%</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Shares</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">655,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">125,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; font-weight: bold">Fair Value per share</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="font-size: 10pt; font-weight: bold; text-align: right">2.50</td><td style="font-size: 10pt; font-weight: bold; text-align: left"> </td><td style="font-size: 10pt; font-weight: bold"> </td>
<td style="font-size: 10pt; font-weight: bold; text-align: left">$</td><td style="font-size: 10pt; font-weight: bold; text-align: right">3.05</td><td style="font-size: 10pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Assumption:</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Warrants</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Employee Options</b></font></td>
<td style="vertical-align: top; border-bottom: black 1pt solid; text-align: center; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Non-employee Options</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; width: 49%; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Market price per share at grant date </font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 14%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: top; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.11</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Exercise price per share </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9.25</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1.52%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.02%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2.20%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Contractual or estimated term in years </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">6.25</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.00</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Volatility </font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">77.19%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">79.48%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">103.42%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Dividend rate</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.0%</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Shares</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">650,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">60,000</font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">30,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
<tr style="background-color: White">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: top; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"> </td></tr>
<tr style="background-color: rgb(204,238,255)">
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value per share</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>5.68</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: top; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>6.35</b></font></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>$</b></font></td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>8.27</b></font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"></p>
<p style="margin-top: 0; margin-bottom: 0"></p>
<p style="margin-top: 0; margin-bottom: 0"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">September 30,</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">March 31,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; font-size: 10pt"> Insurance</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">94,900</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">27,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Prepaid compensation under financial advisory</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">     and other consulting agreements</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">550,800</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">337,500</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left"> Public offering expenses</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">57,400</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Technology license fees and all other</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,200</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">4,900</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">648,900</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">426,800</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">September 30,</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">March 31,</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 56%; font-size: 10pt; text-align: left"> Accrued professional services</td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">133,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 12%; font-size: 10pt; text-align: right">318,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left"> Accrued AV-101 development expenses</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">662,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">186,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"> Accrued compensation</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">310,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">795,000</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">814,000</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table> <p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">  <b>September 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="10" style="border-bottom: black 1pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">  <b>March 31,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2016</b></p></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Principal</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 10pt">Accrued</font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </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: 10pt">Balance</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: 10pt">Interest</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: 10pt">Total</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: 10pt">Balance</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: 10pt">Interest</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: 10pt">Total</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>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; padding-bottom: 2.5pt"><font style="font-size: 10pt"> 5.75% Note payable to insurance premium financing company (current)</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">71,100</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">71,100</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 0%; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="width: 7%; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"> 7.0% Note payable to Progressive Medical Research</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">58,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">12,000</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">70,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font-size: 10pt"> less: current portion</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(31,600</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(12,000</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td>
<td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">(43,600</font></td>
<td style="padding-bottom: 1pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt"> 7.0% Notes payable - non-current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 10pt"> Total notes payable to unrelated parties</font></td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">71,100</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">-</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">71,100</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">58,800</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">12,000</font></td>
<td> </td>
<td> </td>
<td><font style="font-size: 10pt">$</font></td>
<td style="text-align: right"><font style="font-size: 10pt">70,800</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td><font style="font-size: 10pt"> less: current portion</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: 10pt">(71,100</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">-</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: 10pt">(71,100</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(31,600</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(12,000</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</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: 10pt">(43,600</font></td>
<td style="padding-bottom: 3pt"><font style="font-size: 10pt">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"><font style="font-size: 10pt">Net non-current portion</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">-</font></td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double"><font style="font-size: 10pt">$</font></td>
<td style="text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 10pt">27,200</font></td>
<td style="padding-bottom: 2.5pt"> </td></tr>
</table>
<p style="margin: 0pt"></p> <p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">Exercise Price</td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center"></td><td style="font-size: 10pt; font-weight: bold"> </td>
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center">Shares Subject to Purchase at</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">per Share</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"><b>Expiration</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 10pt"><b> September 30, 2016</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 26%; font-size: 10pt; text-align: right">4.50</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 26%; font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/26/2019</font></td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 26%; font-size: 10pt; text-align: right">25,000</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">5.30</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">5/16/2021</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,705,883</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">6.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/26/2019</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">75,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">7.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">12/11/2018 to 3/3/2023</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,417,125</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">8.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">3/25/2021</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">210,000</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">10.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">8/31/2016 to 1/11/2020</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">131,358</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">20.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">9/15/2019</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,448</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">30.00</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"><font style="font-size: 10pt">11/20/2017</font></td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3,600</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; padding-bottom: 1pt"> </td><td style="text-align: left; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left; padding-bottom: 1pt"> </td><td style="text-align: right; border-bottom: Black 1pt solid"> </td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"></td><td style="font-size: 10pt; text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4,678,414</font></td><td style="text-align: left"><font style="font-size: 10pt"> </font></td></tr>
</table>
<p style="margin: 0pt"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td colspan="35" style="text-align: center; border-bottom: Black 1pt solid">Unit Warrants</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; padding-bottom: 1pt">Aggregate Allocation of</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="23" style="text-align: center; border-bottom: Black 1pt solid">Weighted Average Issuance Date Valuation Assumptions</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Per Share</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Aggregate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Aggregate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; padding-bottom: 1pt">Proceeds Based on</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Warrant</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Risk free</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Fair</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Fair Value</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; padding-bottom: 1pt">Proceeds</td><td style="padding-bottom: 1pt"> </td>
<td colspan="7" style="text-align: center; border-bottom: Black 1pt solid">Relative Fair Value of:</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center">Shares</td><td> </td>
<td colspan="3" style="text-align: center">Market</td><td> </td>
<td colspan="3" style="text-align: center">Exercise</td><td> </td>
<td colspan="3" style="text-align: center">Term</td><td> </td>
<td colspan="3" style="text-align: center">Interest</td><td> </td>
<td colspan="3"> </td><td> </td>
<td colspan="3" style="text-align: center">Dividend</td><td> </td>
<td colspan="3" style="text-align: center">Value of</td><td> </td>
<td colspan="3" style="text-align: center">of Unit</td><td> </td>
<td colspan="3" style="text-align: center">of Unit</td><td> </td>
<td colspan="3" style="text-align: center">Unit</td><td> </td>
<td colspan="3" style="text-align: center">Unit</td></tr>
<tr style="vertical-align: bottom">
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Issued</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">(Years)</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Rate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Volatility</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Rate</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrant</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrants</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Stock</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Warrant</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 1%; text-align: left"> </td><td style="width: 6%; 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: 6%; 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: 6%; 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: 6%; 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: 6%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; 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: 5%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td style="text-align: right">39,714</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.45</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">7.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5.00</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.27</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">78.43</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.0</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5.63</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">223,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">278,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">166,900</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">61,100</td><td style="text-align: left"> </td></tr>
</table> 44300000
16400000
4.5
5.3
6
7
8
10
20
30
9/26/2019
5/16/2021
9/26/2019
12/11/2018 to 3/3/2023
3/25/2021
8/31/2016 to 1/11/2020
9/15/2019
11/20/2017
4678414
25000
2705883
75000
1417125
210000
131358
110448
3600
-111100
-1143100
0
-886900
.075
20
650000
9.25
428500
6257100
70000
694000
-5063000
-7207700
-3099700
-5386600
5063000
7207700
3099700
5386600
2631200
5179000
1493600
3730500
0
1894700
0
0
2800
767300
1400
12200
0
-26700200
0
-1649300
-5065800
-36569900
-3101100
-7048100
-5068200
-36572200
-3101100
-7048100
2400
2300
0
0
-780800
-828000
-241000
-614700
-5960100
-38543300
-3342100
-8549700
-0.91
-24.21
-0.42
-5.26
6577769
1592104
8041619
1624371
-5068200
-36572200
-3101100
-7048100
57400
122300
0
1894700
0
564800
26000
28900
0
26700200
0
-6300
227500
0
375000
707500
217000
500000
-3873100
-2329500
-36800
-51900
40400
24200
-18100
-11600
-7700
0
7700
0
9709400
2953500
105200
48800
500
500
278000
2722800
9537100
280000
5828600
624000
1768800
22700
780800
828000
117500
79400
0
18891400
Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with PLTG, 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