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VistaGen Therapeutics. Inc., a Nevada corporation (which may be referred to as VistaGen, the Company, we, our, or us), is a clinical-stage biopharmaceutical company committed to developing differentiated new generation medications for central nervous system (CNS) diseases and disorders with high unmet need. Our product candidate portfolio includes three differentiated clinical-stage candidates, AV-101, PH10 and PH94B, which we are developing for multiple CNS indications. We aim to become a fully-integrated biopharmaceutical company that develops and commercializes innovative CNS therapies for large and growing mental health and neurology markets where current treatments are inadequate to meet the needs of millions of patients and caregivers worldwide.   AV-101 (4-Chlorokynurenine or 4-Cl-KYN) belongs to a new generation of investigational medicines in neuropsychiatry and neurology known as NMDA (N-methyl-D-aspartate) glutamate receptor modulators. The NMDA receptor is a pivotal receptor in the brain and abnormal NMDA function is associated with multiple CNS diseases and disorders, including major depressive disorder (MDD), chronic neuropathic pain, epilepsy, levodopa-induced dyskinesia and many others. AV-101 is an oral prodrug of 7-Cl-KYNA which binds uniquely at the glycine site of the NMDA receptor. We are developing AV-101 initially for the treatment of MDD, a serious neurobiologically-based mood disorder which is a leading cause of disability globally, affecting approximately 17 million adults in the United States and nearly 300 million people worldwide according to the U.S. National Institutes of Health (NIH). AV-101 is currently in development in the U.S. as an adjunctive or add-on treatment (together with current FDA-approved antidepressants (SSRIs and SNRIs)) through the ELEVATE study, our U.S. multi-center, randomized, double-blind, placebo-controlled Phase 2 clinical study to evaluate the efficacy and safety of adjunctive use of AV-101 in adult MDD patients who have an inadequate response to standard FDA-approved oral antidepressant therapy (the ELEVATE Study). In addition to the ELEVATE Study, we are collaborating with Baylor College of Medicine (Baylor) and the U.S. Department of Veterans Affairs (VA) on a small Phase 1b clinical trial of AV-101 in healthy volunteer U.S. Military Veterans from Operation Enduring Freedom, Operation Iraqi Freedom or Operation New Dawn to define a dose-response relationship between AV-101 and relevant biomarkers related to NMDA receptor function and other biomarkers possibly related to suicidal ideation in U.S. Military Veterans (the Baylor Study). The FDA has granted Fast Track designation for development of AV-101 as an add-on, or adjunctive, treatment for MDD. We believe AV-101 has potential as a novel treatment for multiple additional CNS indications, including as a non-opioid treatment for chronic neuropathic pain, for which the FDA has granted a second AV-101 Fast Track designation, as well as a novel oral therapy for dyskinesia associated with levodopa therapy for Parkinson’s disease and suicidal ideation.   PH10 is a novel, rapid-acting CNS neuroactive nasal spray for MDD. Administered in microgram doses, PH10 activates nasal chemosensory receptors that, in turn, engage neural circuits that lead to rapid antidepressant effects without the psychological side effects, systemic exposure or safety concerns often associated with current oral antidepressants and ketamine-based therapies (intravenous ketamine or esketamine nasal spray) (KBT). In an exploratory 30-patient Phase 2a clinical study, PH10 was well-tolerated and, at microgram doses, demonstrated rapid-onset antidepressant effects, as measured by the Hamilton Depression Rating Scale (HAM-D), without psychological side effects or safety concerns. Based on positive results from this exploratory Phase 2a study, we are planning Phase 2b clinical development of PH10 in 2020, initially as a new stand-alone treatment for MDD. In a manner similar to the potential of AV-101, with its exceptional safety profile during clinical development to date, PH10 also has potential to change the current paradigm for treatment of treatment-resistant depression (TRD) with KBT, which must be administered in a clinical setting, by enabling those who respond to KBT to transition to more convenient home-based use of PH10 to maintain the initial therapeutic benefits of KBT.    PH94B is also a novel, rapid-acting CNS neuroactive nasal spray administered in microgram doses. We are initially developing PH94B for treatment of social anxiety disorder (SAD), which affects over 20 million Americans and, according to the NIH, is the third most common psychiatric condition after depression and substance abuse. A person with SAD feels symptoms of anxiety or fear in certain social situations, such as meeting new people, dating, being on a job interview, answering a question in class, or having to talk to a cashier in a store. Doing everyday things in front of people - such as eating or drinking in front of others or using a public restroom - also causes anxiety or fear. The person is afraid that he or she will be humiliated, judged, and rejected.  The fear that people with SAD have in social situations is so strong that they feel it is beyond their ability to control. As a result, it gets in the way of going to work, attending school, or doing everyday things. People with SAD may worry about these and other things for weeks before they happen. Sometimes, they end up staying away from places or events where they think they might have to do something that will embarrass them.  Some people with SAD do not have anxiety in social situations but have performance anxiety instead. They feel physical symptoms of anxiety in performance situations, such as giving a speech, playing a sports game, or dancing or playing a musical instrument on stage.  SAD usually starts during youth in people who are extremely shy. Without treatment, social anxiety disorder can last for many years or a lifetime and prevent a person from reaching his or her full potential. Unfortunately, SAD often predisposes to depression and substance abuse. Only three drugs, all antidepressants, are approved by the U.S Food and Drug Administration (FDA) specifically for treatment of SAD. However, for treatment of both MDD and SAD, current oral antidepressants (ADs) have slow onset of effect (often several weeks to months) and significant side effects that may make them inadequate treatment alternatives for many individuals affected by MDD and SAD. PH94B is fundamentally differentiated from all current treatments for SAD. PH94B activates nasal chemosensory receptors that, in turn, engage neural circuits that lead to rapid suppression of fear and anxiety. In clinical studies to date, PH94B has not shown psychological side effects, systemic exposure, sedation or other safety concerns often associated with current antidepressants approved by the FDA for treatment of SAD, as well as benzodiazepines and beta blockers, which are not approved by the FDA to treat SAD but are often prescribed for treatment of SAD off-label. In a peer-reviewed, published double-blind, placebo-controlled Phase 2 clinical trial, PH94B neuroactive nasal spray was significantly more effective than placebo in reducing public-speaking and social interaction anxiety on laboratory challenges of individuals with SAD within 10 to 15 minutes of self-administration.  Based on its novel mechanism of pharmacological action, rapid-onset of therapeutic effects and exceptional safety and tolerability profile in Phase 2 clinical trials to date, we are preparing to begin pivotal Phase 3 development of PH94B neuroactive nasal spray to become the first FDA-approved on-demand treatment for SAD. Additional potential CNS indications for PH94B include, general anxiety disorder (GAD), peripartum anxiety, preoperative anxiety, panic disorder and post-traumatic stress disorder (PTSD).   In addition to our current CNS product candidates, we have pipeline-enabling programs through our wholly-owned subsidiary, VistaStem Therapeutics (VistaStem). VistaStem is focused on applying pluripotent stem cell (hPSC) technology to discover, rescue, develop and commercialize proprietary new chemical entities (NCEs) for CNS and other diseases and regenerative medicine (RM) involving hPSC-derived blood, cartilage, heart and liver cells. Our internal drug rescue programs are designed to utilize CardioSafe 3D, our customized cardiac bioassay system, to discover and develop small molecule NCEs for our CNS pipeline or for out-licensing. To advance potential RM applications of our cardiac stem cell technology, we have sublicensed to BlueRock Therapeutics LP, a next generation cell therapy and RM company recently acquired by Bayer AG (BlueRock Therapeutics), rights to certain proprietary technologies relating to the production of cardiac stem cells for the treatment of heart disease (the BlueRock Agreement). In a manner similar to the BlueRock Agreement, we may pursue additional collaborations or licensing transactions involving blood, cartilage, and/or liver cells derived from hPSCs for cell-based therapy, cell repair therapy, RM and/or tissue engineering.   Subsidiaries   As noted above, VistaStem, a California corporation, is our wholly-owned subsidiary. Our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q (Report) also include the accounts of VistaStem and VistaStem’s two wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation, and VistaStem Canada, Inc., a corporation organized under the laws of Ontario, Canada.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) 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, 2019 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, 2019 are not necessarily indicative of the operating results to be expected for our fiscal year ending March 31, 2020, or for any other future interim or other period.   The accompanying unaudited Condensed Consolidated Financial Statements and notes to the Condensed Consolidated Financial Statements contained in this Report should be read in conjunction with our audited Consolidated Financial Statements for our fiscal year ended March 31, 2019 contained in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (SEC) on June 25, 2019.   The accompanying unaudited Condensed Consolidated Financial Statements have been prepared assuming we will continue as a going concern. As a clinical-stage biopharmaceutical 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 approximately $192.7 million accumulated from inception (May 1998) through September 30, 2019. We expect losses and negative cash flows from operations to continue for the foreseeable future as we engage in further development of AV-101, PH94B and PH10, execute our drug rescue programs and pursue potential drug development and regenerative medicine opportunities.   Since our inception in May 1998 through September 30, 2019, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and debt securities for cash proceeds of approximately $79.0 million, as well as from an aggregate of approximately $17.7 million of government research grant awards (excluding the fair market value of government sponsored and funded clinical trials), strategic collaboration payments, intellectual property sublicensing and other revenues. Additionally, we have issued equity securities with an approximate value at issuance of $38.1 million in noncash acquisitions of product licenses and in settlements of certain liabilities, including liabilities for professional services rendered to us or as compensation for such services.   At September 30, 2019, we had cash and cash equivalents of approximately $4.1 million. As disclosed in Note 11, Subsequent Events, since September 30, 2019, we have completed a self-placed private placement of units consisting of unregistered shares of our common stock and warrants to purchase unregistered shares of our common stock pursuant to which we have received cash proceeds of $600,000 (the Fall 2019 Private Placement). Nevertheless, we believe that our cash position at September 30, 2019, including the proceeds from the Fall 2019 Private Placement, considered with our recurring and anticipated losses, negative cash flows from operations and stockholders’ deficit make it probable, in the absence of additional financing, that we will not have sufficient resources to fund our planned operations for the twelve months following the issuance of these financial statements, during which time we plan to finalize the ELEVATE Study, prepare for and potentially launch Phase 3 clinical trials of AV-101 and/or PH94B, prepare for additional Phase 2 clinical studies and certain nonclinical studies involving AV-101, PH10 and PH94B and prepare for a Phase 2b clinical trial of PH10, and raises substantial doubt that we can continue as a going concern. When necessary and advantageous, we plan to raise additional capital, primarily through the sale of our equity securities in one or more private placements to accredited investors or in public offerings. Subject to certain restrictions, our Registration Statement on Form S-3 (Registration No. 333-234025) (the S-3 Registration Statement), which became effective on October 7, 2019, is available for future sales of our equity securities in one or more public offerings from time to time. While we may make additional sales of our equity securities under the S-3 Registration Statement, we do not have an obligation to do so. As we have been in the past, we expect that, when and as necessary, we will be successful in raising additional capital from the sale of our equity securities either in one or more public offerings or in one or more private placement transactions with individual accredited investors or institutions.   In addition to the potential sale of our equity securities, we may also seek to enter research, development and/or commercialization collaborations that could generate revenue or provide funding, including non-dilutive funding, for development of AV-101, PH94B, PH10 and/or additional product candidates. We may also seek additional government grant awards or agreements similar to our relationships with Baylor and the VA in connection with the Baylor Study. Such strategic collaborations may provide non-dilutive resources to advance our strategic initiatives while reducing a portion of our future cash outlays and working capital requirements. We may also pursue intellectual property arrangements similar to the BlueRock Agreement with other parties. Although we may seek additional collaborations that could generate revenue and/or provide non-dilutive funding for development of AV-101, PH94B, PH10 or other product candidates, as well as new government grant awards and/or agreements, no assurance can be provided that any such collaborations, awards or agreements 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 and commercialization of our current product candidates and various applications of our stem cell technology platform, the availability of, and our ability to obtain, government grant awards and agreements, and our ability to enter into collaborations on terms acceptable to us. To further advance the clinical development of AV-101, PH94B, PH10 and, to a lesser extent, our stem cell technology platform, as well as support our operating activities, we plan to continue to carefully manage our routine operating costs, including our employee headcount and related expenses, as well as costs relating to regulatory consulting, contract research and development, investor relations and corporate development, legal, acquisition and protection of intellectual property, public company compliance and other professional services and operating costs.    Notwithstanding the foregoing, there can be no assurance that future financings or government or other strategic collaborations will be available to us in sufficient amounts, in a timely manner, or on terms acceptable to us, if at all. If we are unable to obtain substantial additional financing on a timely basis when needed in 2019 and beyond, our business, financial condition, and results of operations may be harmed, the price of our stock may decline, we may be required to reduce, defer, or discontinue certain of our research and development activities and we may not be able to continue as a going concern.  As noted above, these Condensed Consolidated Financial Statements do not include any adjustments that might result from the negative outcome of this uncertainty.

Use of Estimates   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, right-of-use assets and lease liabilities and assumptions that have been used historically to value warrants and warrant modifications. With the exception of the BlueRock Agreement pursuant to which we recorded sublicense revenue in the third quarter of our fiscal year ended March 31, 2017, we do not currently have, nor have we had during the periods covered by this Report, any arrangements requiring the recognition of revenue.   Research and Development Expenses   Research and development expenses are composed of both internal and external costs.  Internal costs include salaries and employment-related expenses, including stock-based compensation expense, of scientific personnel and direct project costs.  External research and development expenses consist primarily of costs associated with clinical and non-clinical development of AV-101, PH94B, PH10, and stem cell research and development costs, and costs related to the application and prosecution of patents related to those product candidates and, to a lesser extent, our stem cell technology platform. All such costs are charged to expense as incurred. We also record accruals for estimated ongoing clinical trial costs. Clinical trial costs represent costs incurred by contract research organizations (CROs) and clinical trial sites. Progress payments are generally made to CROs, clinical sites, investigators and other professional service providers. We analyze the progress of the clinical trial, including levels of subject enrollment, invoices received and contracted costs when evaluating the adequacy of accrued liabilities. Significant judgments and estimates must be made and used in determining the clinical trial accrual in any reporting period. Actual results could differ from those estimates under different assumptions. Revisions are charged to research and development expense in the period in which the facts that give rise to the revision become known. Costs incurred in obtaining product or technology licenses are charged immediately to research and development expense if the product or technology licensed has not achieved regulatory approval or reached technical feasibility and has no alternative future uses. In September and October 2018, we acquired exclusive worldwide licenses to develop and commercialize PH94B and PH10, respectively, by issuing an aggregate of 2,556,361 unregistered shares of our common stock having an issuance-date fair market value of $4,250,000. Since, at the date of each acquisition, neither product candidate had achieved regulatory approval and each will require significant additional development and expense, we expensed the costs related to acquiring the licenses and the option during our fiscal year ended March 31, 2019.   Stock-Based Compensation   We recognize compensation cost for all stock-based awards to employees and non-employee consultants based on the grant date fair value of the award.  We record non-cash, stock-based compensation expense over the period during which the employee or other grantee is required to perform services in exchange for the award, which generally represents the scheduled vesting period.  We have not granted restricted stock awards to employees nor do we have any awards with market or performance conditions. Non-cash expense attributable to compensatory grants of stock to non-employees is determined by the quoted market price of the stock on the date of grant and is either recognized as fully-earned at the time of the grant or amortized ratably over the term of the related service agreement, depending on the terms of the specific agreement.   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, 2019 and 2018.   <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"> Three Months Ended September 30,</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center"> Six Months Ended September 30,</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"> 2019</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"> 2018</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"> 2019</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"> 2018</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 50%"> Research and development expense</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">167,500</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">450,600</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">558,100</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">680,700</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td> General and administrative expense</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">226,000</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">721,800</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">898,400</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">1,104,300</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> Total stock-based compensation expense</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">393,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,172,400</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,456,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,785,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   In May 2019, the Compensation Committee of our Board of Directors (the Board) approved the grant of options from our 2016 Amended and Restated Stock Incentive Plan (the 2016 Plan) to purchase an aggregate of 1,220,000 shares of our common stock at a then above-market exercise price of $1.00 per share to the independent members of our Board, our officers and employees and certain consultants. The options vested 25% upon grant with the remaining shares vesting ratably over three years for independent directors, officers and employees, and over two years for consultants. We valued the options granted in May 2019 using the Black-Scholes Option Pricing Model and the following weighted average assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">May 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.80</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">2.12</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.53</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">85.90</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">1,220,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.54</td> <td> </td></tr> </table>   Additionally, in May 2019, the Compensation Committee approved, subject to subsequent stockholder approval at our 2019 Annual Meeting of Stockholders (Annual Meeting) held in September 2019, the 2019 Omnibus Equity Incentive Plan (the 2019 Plan) and designated 7.5 million shares of our authorized common stock to be reserved thereunder. Further, in May 2019, the Compensation Committee granted options pursuant to the 2019 Plan to one of our officers to purchase 170,000 shares of our common stock at a then above-market exercise price of $1.00 per share, which grant was contingent upon the approval of the 2019 Plan by our stockholders. Our stockholders approved the 2019 Plan at our Annual Meeting and ratified the contingent grant. The option vested 25% upon approval of the 2019 Plan and the remaining shares vest ratably over three years. We valued the option using the Black-Scholes Option Pricing Model and the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.84</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">1.45</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.58</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">86.04</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">170,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.56</td> <td> </td></tr> </table>   Upon approval of the 2019 Plan by our stockholders, no further option or other equity awards were permitted from our 2016 Plan and all remaining authorized shares of our common stock available for issuance under the 2016 Plan, 1,388,412 shares, became available for issuance under the 2019 Plan.   At September 30, 2019, there were stock options outstanding under our 2016 Plan and 2019 Plan to purchase 8,014,838 shares of our common stock at a weighted average exercise price of $1.40 per share. At that date, there were also 8,718,412 shares of our common stock available for future issuance under the 2019 Plan. See Note 11, Subsequent Events, for disclosure of additional option grants made in October 2019.   Leases, Right-of-Use Assets and Lease Liabilities   On April 1, 2019, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases, which replaced the existing guidance in Accounting Standards Codification (ASC) 840, “Leases”, and its subsequent amendments including ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (ASC 842) using the modified transition method.   We determine whether an arrangement is an operating or financing lease at contract inception. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. In determining the present value of the lease payments, we use the interest rate implicit in the lease when it is readily determinable and we use our estimated incremental borrowing rate based upon information available at the commencement date when the implicit rate is not readily determinable.   The lease payments used to determine our operating lease assets include lease incentives and stated rent increases and may include escalation or other clauses linked to rates of inflation or other factors when determinable and are recognized in our operating lease assets in our condensed consolidated balance sheets.   Our operating leases are reflected in right of use asset – operating leases, other current liabilities and non-current operating lease liability in our condensed consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Short-term leases, defined as leases that have a lease term of 12 months or less at the commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.   Our accounting for financing leases, previously referred to as “capital leases” under prior guidance, remained substantially unchanged with our adoption of ASC 842. Financing leases are included in property and equipment, net and as current and non-current financing lease liabilities in our condensed consolidated balance sheets. Refer to “Recent Accounting Pronouncements” below and Note 10, Commitments and Contingencies, for additional information regarding our adoption of ASC 842 and its impact on our condensed consolidated financial statements.   Comprehensive Loss   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.   Loss per Common Share   Basic net loss attributable to common stockholders per share of common stock excludes the effect of dilution and is computed by dividing net loss increased by the accrual of dividends on outstanding shares of our Series B 10% Convertible Preferred Stock (Series B Preferred), by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders 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 loss attributable to common stockholders per share, we have generally not increased the denominator to include the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method because the result is antidilutive.   As a result of our net loss for all periods presented, potentially dilutive securities were excluded from the computation of diluted net loss per share, as their effect would be antidilutive. Potentially dilutive securities excluded in determining diluted net loss attributable to common stockholders per common share are as follows:   <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">As of September 30,</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">2019</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">2018</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: 75%">Series A Preferred stock issued and outstanding (1)</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td>Series B Preferred stock issued and outstanding (2)</td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Series C Preferred stock issued and outstanding (3)</td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan</td> <td> </td> <td> </td> <td style="text-align: right">8,014,838</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">6,160,338</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding warrants to purchase common stock</td> <td> </td> <td> </td> <td style="text-align: right">21,242,954</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">20,709,516</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right"> </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"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Total</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">33,486,044</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">31,098,106</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 70%">____________</td> <td style="width: 1%"> </td> <td style="width: 14%"> </td> <td style="width: 1%"> </td> <td style="width: 14%"> </td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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; excludes common shares issuable in payment of dividends on Series B Preferred upon conversion.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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></tr> </table>   Fair Value Measurements   We do not use derivative instruments for hedging of market risks or for trading or speculative purposes. We carried no assets or liabilities that are measured on a recurring basis at fair value at September 30, 2019 or March 31, 2019.   Recent Accounting Pronouncements   Except as described below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six months ended September 30, 2019, as compared to the recent accounting pronouncements described in our Form 10-K for our fiscal year ended March 31, 2019, that are of significance or potential significance to us.   In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaced the existing guidance in ASC 840, “Leases”, and in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (together, ASC 842). The new leasing standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standards require lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to the prior guidance for operating leases. We adopted the standards on the required effective date of April 1, 2019 and did not restate lease expense or lease-related assets or liabilities reported in prior comparative periods. Presentation of our financing lease for office equipment in the consolidated balance sheet is generally consistent with capitalized lease presentation under the prior lease accounting guidance. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows is generally consistent with the prior lease accounting guidance. We elected the package of practical expedients permitted under the transition guidance and, accordingly, the adoption of ASC 842 did not change the prior classification of any of our leases. We elected not to record a right-of-use asset or a lease liability on the balance sheet for leases with a term of 12 months or less and will recognize the associated lease payments in the consolidated statements of operations over the lease term. On the April 1, 2019 adoption date, we recognized approximately $4.3 million as total lease liabilities and $3.9 million as total right-of-use assets in our Condensed Consolidated Balance Sheet and derecognized a deferred rent liability of approximately $0.4 million attributable to the operating lease of our primary office and laboratory facilities recorded in accordance with prior guidance.

Prepaid expenses and other current assets are composed of the following at September 30, 2019 and March 31, 2019:   <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"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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%"> AV-101, PH94B and PH10 materials and contract services</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">357,900</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">5,900</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Fair value of securities issued for professional services</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">105,900</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Insurance</td> <td> </td> <td> </td> <td style="text-align: right">206,000</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">96,300</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Public offering filing fees and expenses</td> <td> </td> <td> </td> <td style="text-align: right">30,500</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">22,300</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> All other</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">10,100</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">20,500</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">604,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">250,900</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   The fair value of securities issued for professional services reflects the unamortized portion of the fair value of securities we have issued to certain professional service providers as full or partial compensation for services. The fair value of the securities issued is amortized ratably over the term of the related service agreement.

Property and equipment is composed of the following at September 30, 2019 and March 31, 2019:   <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"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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%"> Laboratory equipment</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">892,500</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">892,500</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Tenant improvements</td> <td> </td> <td> </td> <td style="text-align: right">214,400</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">214,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Computers and network equipment</td> <td> </td> <td> </td> <td style="text-align: right">54,600</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">54,600</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Office furniture and equipment</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">84,600</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">84,600</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">1,246,100</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1,246,100</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Accumulated depreciation and amortization</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">(985,500</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">(933,400</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> Property and equipment, net</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">260,600</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">312,700</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   Included in amounts reported above for office furniture and equipment is the right-of-use asset related to a financing lease of certain office equipment. Amounts associated with assets subject to the financing lease at September 30, 2019 and March 31, 2019 are as follows:   <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"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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%"> Office equipment subject to financing lease</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">14,700</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">14,700</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Accumulated depreciation</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">(8,000</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">(6,500</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> Net book value of office equipment subject to financing lease</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">6,700</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">8,200</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

Accrued expenses are composed of the following at September 30, 2019 and March 31, 2019:   <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"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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> Accrued expenses for AV-101, PH94B, and PH10</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%">      clinical trial, development and related expenses</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">2,080,700</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">1,067,600</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Accrued compensation</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">439,200</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Accrued professional services</td> <td> </td> <td> </td> <td style="text-align: right">127,600</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">172,100</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> All other</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">7,200</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">6,700</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">2,215,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,685,600</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

The following table summarizes our unsecured promissory notes at September 30, 2019 and March 31, 2019:   <table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif"> <tr> <td style="font-size: 12pt; vertical-align: top"> </td> <td style="font-size: 12pt; vertical-align: top"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: black 1pt solid; vertical-align: bottom">September 30, 2019  </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: black 1pt solid; vertical-align: bottom">March 31, 2019  </td></tr> <tr> <td style="font-size: 12pt; vertical-align: top; padding-bottom: 1.5pt; width: 12%"> </td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%">Accrued</td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%">Accrued</td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: middle; width: 11%"> </td></tr> <tr style="vertical-align: top"> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Balance</td> <td style="border-bottom: black 1pt solid; text-align: center">Interest</td> <td style="border-bottom: black 1pt solid; text-align: center">Total</td> <td style="font-size: 12pt"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Balance</td> <td style="border-bottom: black 1pt solid; text-align: center">Interest</td> <td style="border-bottom: black 1pt solid; text-align: center">Total</td></tr> <tr style="vertical-align: top"> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td></tr> <tr style="vertical-align: top"> <td>7.75% and 7.15% Notes payable to insurance premium financing company (current)</td> <td style="font-size: 12pt"> </td> <td style="text-align: right"> $ 159,300</td> <td style="text-align: right"> $ -</td> <td style="text-align: right"> $ 159,300</td> <td style="font-size: 12pt"> </td> <td style="text-align: right"> $ 57,300</td> <td style="text-align: right"> $ -</td> <td style="text-align: right"> $ 57,300</td></tr> </table>   In May 2019, we executed a 7.15% promissory note in the principal amount of $230,200 in connection with certain insurance policy premiums. The note is payable in monthly installments of $23,800, including principal and interest, through March 2020, and had an outstanding principal balance of $139,800 at September 30, 2019. In February 2019, we executed a 7.75% promissory note in the principal amount of $63,500 in connection with other insurance policy premiums. That note is payable in monthly installments of $6,600 including principal and interest, through December 2019 and had an outstanding principal balance of $19,500 at September 30, 2019.

During the six months ended September 30, 2019, we did not engage in any capital-raising transactions, nor did we grant any equity securities as full or partial compensation to consultants, other than stock options as described in Stock-Based Compensation in Note 3, Summary of Significant Accounting Policies.   Warrants Outstanding   During the quarter ended June 30, 2019, warrants issued in private placement transactions during calendar 2018 to purchase an aggregate of 805,800 shares of our common stock at exercise prices between $1.50 per share and $1.75 per share became fully-exercisable in accordance with their terms. Accordingly, all warrants outstanding at September 30, 2019 are now fully-exercisable at a weighted average exercise price of $2.43 per share as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td colspan="2" style="text-align: center"> Exercise</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td style="text-align: center">Weighted</td> <td> </td> <td colspan="2" style="text-align: center">Warrants Outstanding</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td colspan="2" style="text-align: center">   Price      </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Average</td> <td> </td> <td style="text-align: center">Expiration</td> <td> </td> <td colspan="2" style="text-align: center">and Exercisable at</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"> per Share</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">per Share</td> <td style="padding-bottom: 1.5pt"> </td> <td> Date</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">1.50</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">1.50</td> <td style="width: 1%"> </td> <td style="width: 43%; text-align: center">11/30/2021 to 12/13/2022</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right">14,335,200</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">1.59 - $1.80</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1.67</td> <td> </td> <td style="text-align: center">2/28/2022 to 10/10/2022</td> <td> </td> <td> </td> <td style="text-align: right">625,619</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">1.82</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1.82</td> <td> </td> <td style="text-align: center">3/7/2023</td> <td> </td> <td> </td> <td style="text-align: right">1,388,931</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">2.00 - $3.51</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">2.14</td> <td> </td> <td style="text-align: center">4/30/2021 to 10/19/2022</td> <td> </td> <td> </td> <td style="text-align: right">696,693</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">5.30</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">5.30</td> <td> </td> <td style="text-align: center">5/16/2021</td> <td> </td> <td> </td> <td style="text-align: right">2,705,883</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt">$</td> <td style="padding-bottom: 1.5pt; text-align: right">6.00 - $10.00</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt">$</td> <td style="padding-bottom: 1.5pt; text-align: right">7.15</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: center">10/11/2019 to 3/3/2023</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">1,490,628</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">2.43</td> <td> </td> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">21,242,954</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   Of the warrants outstanding at September 30, 2019, 2,705,883 shares of common stock underlying the warrants exercisable at $5.30 per share issued in our May 2016 public offering, 1,388,931 shares of common stock underlying the warrants exercisable at $1.82 per share issued in our September 2017 public offering and 9,596,200 shares of common stock underlying the warrants exercisable at $1.50 per share issued in our December 2017 public offering are registered for resale by the warrant holders. The common shares issuable upon exercise of our remaining outstanding warrants are unregistered. At September 30, 2019, none of our outstanding warrants are subject to down round anti-dilution protection features and all of the outstanding warrants are exercisable by the holders only by payment in cash of the stated exercise price per share.

Cato Holding Company (CHC), doing business as Cato BioVentures (CBV), is the parent of Cato Research Ltd. (CRL). CRL is a contract research, development and regulatory services organization (CRO) that we have engaged for a wide range of material aspects related to the nonclinical and clinical development, manufacturing and regulatory affairs associated with our efforts to develop and commercialize AV-101 for MDD, including our ELEVATE Study and other potential CNS indications, as well as PH94B, PH10, and other potential product candidates. At September 30, 2019, CBV held approximately 2% of our outstanding common stock.   In July 2017, we entered into a Master Services Agreement (MSA) with CRL, which replaced a substantially similar May 2007 master services agreement, pursuant to which CRL may assist us in the evaluation, development, commercialization and marketing of our potential product candidates, and provide regulatory and strategic consulting services as requested from time to time. Specific projects or services are and will be delineated in individual work orders negotiated from time-to-time under the MSA. Under the terms of work orders issued pursuant to the July 2017 MSA and our prior May 2007 master services agreement, we incurred expenses of $1,610,900 and $752,200 during the quarters ended September 30, 2019 and 2018, respectively, and $3,016,000 and $1,603,000 for the six months ended September 30, 2019 and 2018, respectively. At September 30, 2019 and March 31, 2019, we had recorded accounts payable and accrued expenses related to CRL aggregating $1,646,800 and $657,800, respectively. We anticipate periodic expenses for CRO services from CRL related to nonclinical and clinical development of, and regulatory affairs related to, AV-101, PH94B, PH10 and other potential product candidates will increase in future periods.   During our fiscal year ended March 31, 2019, we issued an aggregate of 2,556,361 shares of our unregistered common stock having an issue-date fair market value of $4,250,000 to Pherin Pharmaceuticals, Inc. (Pherin) to acquire exclusive worldwide licenses to develop and commercialize PH94B and PH10. We recorded the acquisition of the licenses as research and development expense during our fiscal year ended March 31, 2019. During the quarters ended September 30, 2019 and 2018, we recorded $30,000 and $10,000, respectively, and during the six months ended September 30, 3019 and 2018, we recorded $60,000 and $10,000 respectively, representing monthly support payments to Pherin under the terms of the PH94B license agreement. We recorded no amounts payable to Pherin at September 30, 2019 or March 31, 2019. At September 30, 2019, Pherin held approximately 4% of our outstanding common stock.   During the six months ended September 30, 2019, we engaged the consulting firm headed by one of the independent members of our Board to provide various market research studies for certain of our product pipeline candidates and recorded research and development expense of $75,100 for the quarter ended September 30, 2019 and $102,800 for the six months ended September 30, 2019 related to such studies. We incurred no such expenses for the three and six months ended September 30, 2018. At September 30, 2019, we recorded $45,000 of accrued expenses related to these studies.

Operating Leases   We lease our headquarters office and laboratory space in South San Francisco, California under the terms of a lease that expires on July 31, 2022 and that provides an option to renew for an additional five years at then-current market rates. Consistent with the guidance in ASC 842, effective beginning April 1, 2019, we have recorded this lease in our Condensed Consolidated Balance Sheet as an operating lease. For the purpose of determining the right-of-use asset and associated lease liability, we determined that the renewal of this lease is reasonably probable. The lease of our South San Francisco facilities does not include any restrictions or covenants requiring special treatment under ASC 842.   The following table summarizes the presentation of the operating lease in our Condensed Consolidated Balance Sheet at September 30, 2019:   <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="2" style="border-bottom: black 1pt solid"> As of September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Assets</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; padding-left: 0.25in">Right of use asset – operating lease</td> <td style="width: 1%; padding-bottom: 3pt"> </td> <td style="width: 1%; border-bottom: black 1pt double">$</td> <td style="width: 9%; border-bottom: black 1pt double; text-align: right">3,750,200</td> <td style="width: 1%; padding-bottom: 3pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Liabilities</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Current operating lease obligation</td> <td> </td> <td>$</td> <td style="text-align: right">289,600</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Non-current operating lease obligation</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">3,879,400</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Total operating lease liability</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">4,169,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   The following table summarizes the effect of operating lease costs in the Company’s condensed consolidated statements of operations:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> For the Three Months  Ended</td> <td> </td> <td> </td> <td colspan="2"> For the Six Months  Ended</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%; padding-left: 0.25in; text-indent: -0.25in">Operating lease cost</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">203,100</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">411,900</td> <td style="width: 1%"> </td></tr> </table>   The minimum (base rental) lease payments related to our South San Francisco operating lease are expected to be as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> Fiscal Years Ending March 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%">2020 (remaining six months)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">315,500</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td>2021</td> <td> </td> <td> </td> <td style="text-align: right">645,800</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2022</td> <td> </td> <td> </td> <td style="text-align: right">668,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2023</td> <td> </td> <td> </td> <td style="text-align: right">726,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">766,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Thereafter</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">2,720,400</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Total lease expense</td> <td> </td> <td> </td> <td style="text-align: right">5,842,100</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Less imputed interest</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">(1,673,100</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Present value of operating lease liabilities</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">4,169,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   Under the prior lease guidance, future minimum lease payments, under the non-cancellable portion (excluding the five-year extension assumed under ASC 842) of the South San Francisco operating lease were as follows at March 31, 2019:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> Fiscal Years Ending March 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%">2020</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">623,900</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td>2021</td> <td> </td> <td> </td> <td style="text-align: right">645,800</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2022</td> <td> </td> <td> </td> <td style="text-align: right">668,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2023</td> <td> </td> <td> </td> <td style="text-align: right">225,300</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Thereafter</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">-</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">2,163,400</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   The remaining lease term, including the assumed five-year extension at the expiration of the current lease period, and the discount rate assumption for our South San Francisco operating lease is as follows:   <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="2" style="border-bottom: black 1pt solid; text-align: center">As of September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%">Assumed remaining lease term in years</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">7.84</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td>Assumed discount rate</td> <td> </td> <td> </td> <td style="text-align: right">8.54</td> <td>%</td></tr> </table>   The interest rate implicit in lease contracts is typically not readily determinable and, as such, we used our estimated incremental borrowing rate based on information available at the adoption of ASC 842, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.   Supplemental disclosure of cash flow information related to the Company’s operating leases included in cash flows used by operating activities in the condensed consolidated statements of cash flows is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="vertical-align: bottom"> </td> <td colspan="4" style="vertical-align: bottom">For the Six Months  Ended </td></tr> <tr> <td style="vertical-align: bottom"> </td> <td colspan="4" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">September 30, 2019</td></tr> <tr style="vertical-align: bottom"> <td style="width: 80%">Cash paid for amounts included in the measurement of lease liabilities</td> <td style="width: 10%"> </td> <td style="width: 1%">$</td> <td style="width: 8%; text-align: right">374,200</td> <td style="width: 1%"> </td></tr> </table>   During the six months ended September 30, 2019, other than the initial adoption of ASC 842 that required right of use assets and lease liabilities to be recorded, we recorded no new right of use assets arising from new lease liabilities.   We also lease a small office in the San Francisco Bay Area under a month-to-month arrangement at insignificant cost and have made an accounting policy election not to apply the ASC 842 operating lease recognition requirements to such short-term lease. We recognize the lease payments for this lease in general and administrative expense over the lease term. We recorded rent expense of $3,500 and $6,900 for the three and six months ended September 30, 2019, respectively, attributable to this lease.

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, right-of-use assets and lease liabilities and assumptions that have been used historically to value warrants and warrant modifications. With the exception of the BlueRock Agreement pursuant to which we recorded sublicense revenue in the third quarter of our fiscal year ended March 31, 2017, we do not currently have, nor have we had during the periods covered by this Report, any arrangements requiring the recognition of revenue.

Research and development expenses are composed of both internal and external costs.  Internal costs include salaries and employment-related expenses, including stock-based compensation expense, of scientific personnel and direct project costs.  External research and development expenses consist primarily of costs associated with clinical and non-clinical development of AV-101, PH94B, PH10, and stem cell research and development costs, and costs related to the application and prosecution of patents related to those product candidates and, to a lesser extent, our stem cell technology platform. All such costs are charged to expense as incurred. We also record accruals for estimated ongoing clinical trial costs. Clinical trial costs represent costs incurred by contract research organizations (CROs) and clinical trial sites. Progress payments are generally made to CROs, clinical sites, investigators and other professional service providers. We analyze the progress of the clinical trial, including levels of subject enrollment, invoices received and contracted costs when evaluating the adequacy of accrued liabilities. Significant judgments and estimates must be made and used in determining the clinical trial accrual in any reporting period. Actual results could differ from those estimates under different assumptions. Revisions are charged to research and development expense in the period in which the facts that give rise to the revision become known. Costs incurred in obtaining product or technology licenses are charged immediately to research and development expense if the product or technology licensed has not achieved regulatory approval or reached technical feasibility and has no alternative future uses. In September and October 2018, we acquired exclusive worldwide licenses to develop and commercialize PH94B and PH10 by issuing an aggregate of 2,556,361 unregistered shares of our common stock having an issuance-date fair market value of $4,250,000. Since, at the date of each acquisition, neither product candidate had achieved regulatory approval and each will require significant additional development and expense, we expensed the costs related to acquiring the licenses and the option during our fiscal year ended March 31, 2019.

We recognize compensation cost for all stock-based awards to employees and non-employee consultants based on the grant date fair value of the award.  We record non-cash, stock-based compensation expense over the period during which the employee or other grantee is required to perform services in exchange for the award, which generally represents the scheduled vesting period.  We have not granted restricted stock awards to employees nor do we have any awards with market or performance conditions. Non-cash expense attributable to compensatory grants of stock to non-employees is determined by the quoted market price of the stock on the date of grant and is either recognized as fully-earned at the time of the grant or amortized ratably over the term of the related service agreement, depending on the terms of the specific agreement.   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, 2019 and 2018.   <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"> Three Months Ended September 30,</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center"> Six Months Ended September 30,</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"> 2019</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"> 2018</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"> 2019</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"> 2018</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 50%"> Research and development expense</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">167,500</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">450,600</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">558,100</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">680,700</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td> General and administrative expense</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">226,000</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">721,800</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">898,400</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">1,104,300</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> Total stock-based compensation expense</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">393,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,172,400</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,456,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,785,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   In May 2019, the Compensation Committee of our Board of Directors (the Board) approved the grant of options from our 2016 Amended and Restated Stock Incentive Plan (the 2016 Plan) to purchase an aggregate of 1,220,000 shares of our common stock at a then above-market exercise price of $1.00 per share to the independent members of our Board, our officers and employees and certain consultants. The options vested 25% upon grant with the remaining shares vesting ratably over three years for independent directors, officers and employees, and over two years for consultants. We valued the options granted in May 2019 using the Black-Scholes Option Pricing Model and the following weighted average assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">May 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.80</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">2.12</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.53</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">85.90</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">1,220,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.54</td> <td> </td></tr> </table>   Additionally, in May 2019, the Compensation Committee approved, subject to subsequent stockholder approval at our 2019 Annual Meeting of Stockholders (Annual Meeting) held in September 2019, the 2019 Omnibus Equity Incentive Plan (the 2019 Plan) and designated 7.5 million shares of our authorized common stock to be reserved thereunder. Further, in May 2019, the Compensation Committee granted options pursuant to the 2019 Plan to one of our officers to purchase 170,000 shares of our common stock at a then above-market exercise price of $1.00 per share, which grant was contingent upon the approval of the 2019 Plan by our stockholders. Our stockholders approved the 2019 Plan at our Annual Meeting and ratified the contingent grant. The option vested 25% upon approval of the 2019 Plan and the remaining shares vest ratably over three years. We valued the option using the Black-Scholes Option Pricing Model and the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.84</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">1.45</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.58</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">86.04</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">170,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.56</td> <td> </td></tr> </table>   Upon approval of the 2019 Plan by our stockholders, no further option or other equity awards were permitted from our 2016 Plan and all remaining authorized shares of our common stock available for issuance under the 2016 Plan, 1,388,412 shares, became available for issuance under the 2019 Plan.   At September 30, 2019, there were stock options outstanding under our 2016 Plan and 2019 Plan to purchase 8,014,838 shares of our common stock at a weighted average exercise price of $1.40 per share. At that date, there were also 8,718,412 shares of our common stock available for future issuance under the 2019 Plan. See Note 11, Subsequent Events, for disclosure of additional option grants made in October 2019.

On April 1, 2019, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases, which replaced the existing guidance in Accounting Standards Codification (ASC) 840, “Leases”, and its subsequent amendments including ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (ASC 842) using the modified transition method.   We determine whether an arrangement is an operating or financing lease at contract inception. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. In determining the present value of the lease payments, we use the interest rate implicit in the lease when it is readily determinable and we use our estimated incremental borrowing rate based upon information available at the commencement date when the implicit rate is not readily determinable.   The lease payments used to determine our operating lease assets include lease incentives and stated rent increases and may include escalation or other clauses linked to rates of inflation or other factors when determinable and are recognized in our operating lease assets in our condensed consolidated balance sheets.   Our operating leases are reflected in right of use asset – operating leases, other current liabilities and non-current operating lease liability in our condensed consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Short-term leases, defined as leases that have a lease term of 12 months or less at the commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.   Our accounting for financing leases, previously referred to as “capital leases” under prior guidance, remained substantially unchanged with our adoption of ASC 842. Financing leases are included in property and equipment, net and as current and non-current financing lease liabilities in our condensed consolidated balance sheets. Refer to “Recent Accounting Pronouncements” below and Note 10, Commitments and Contingencies, for additional information regarding our adoption of ASC 842 and its impact on our condensed consolidated financial statements.

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.

Basic net loss attributable to common stockholders per share of common stock excludes the effect of dilution and is computed by dividing net loss increased by the accrual of dividends on outstanding shares of our Series B 10% Convertible Preferred Stock (Series B Preferred), by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders 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 loss attributable to common stockholders per share, we have generally not increased the denominator to include the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method because the result is antidilutive.   As a result of our net loss for all periods presented, potentially dilutive securities were excluded from the computation of diluted net loss per share, as their effect would be antidilutive. Potentially dilutive securities excluded in determining diluted net loss attributable to common stockholders per common share are as follows:   <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">As of September 30,</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">2019</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">2018</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: 75%">Series A Preferred stock issued and outstanding (1)</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td>Series B Preferred stock issued and outstanding (2)</td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Series C Preferred stock issued and outstanding (3)</td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan</td> <td> </td> <td> </td> <td style="text-align: right">8,014,838</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">6,160,338</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding warrants to purchase common stock</td> <td> </td> <td> </td> <td style="text-align: right">21,242,954</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">20,709,516</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right"> </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"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Total</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">33,486,044</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">31,098,106</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 70%">____________</td> <td style="width: 1%"> </td> <td style="width: 14%"> </td> <td style="width: 1%"> </td> <td style="width: 14%"> </td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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; excludes common shares issuable in payment of dividends on Series B Preferred upon conversion.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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></tr> </table>

We do not use derivative instruments for hedging of market risks or for trading or speculative purposes. We carried no assets or liabilities that are measured on a recurring basis at fair value at September 30, 2019 or March 31, 2019.

Except as described below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six months ended September 30, 2019, as compared to the recent accounting pronouncements described in our Form 10-K for our fiscal year ended March 31, 2019, that are of significance or potential significance to us.   In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaced the existing guidance in ASC 840, “Leases”, and in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (together, ASC 842). The new leasing standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standards require lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to the prior guidance for operating leases. We adopted the standards on the required effective date of April 1, 2019 and did not restate lease expense or lease-related assets or liabilities reported in prior comparative periods. Presentation of our financing lease for office equipment in the consolidated balance sheet is generally consistent with capitalized lease presentation under the prior lease accounting guidance. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows is generally consistent with the prior lease accounting guidance. We elected the package of practical expedients permitted under the transition guidance and, accordingly, the adoption of ASC 842 did not change the prior classification of any of our leases. We elected not to record a right-of-use asset or a lease liability on the balance sheet for leases with a term of 12 months or less and will recognize the associated lease payments in the consolidated statements of operations over the lease term. On the April 1, 2019 adoption date, we recognized approximately $4.3 million as total lease liabilities and $3.9 million as total right-of-use assets in our Condensed Consolidated Balance Sheet and derecognized a deferred rent liability of approximately $0.4 million attributable to the operating lease of our primary office and laboratory facilities recorded in accordance with prior guidance.

<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"> Three Months Ended September 30,</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center"> Six Months Ended September 30,</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"> 2019</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"> 2018</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"> 2019</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"> 2018</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 50%"> Research and development expense</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">167,500</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">450,600</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">558,100</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">680,700</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td> General and administrative expense</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">226,000</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">721,800</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">898,400</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">1,104,300</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> Total stock-based compensation expense</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">393,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,172,400</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,456,500</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">1,785,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

In May 2019, the Compensation Committee of our Board of Directors (the Board) approved the grant of options from our 2016 Amended and Restated Stock Incentive Plan (the 2016 Plan) to purchase an aggregate of 1,220,000 shares of our common stock at a then above-market exercise price of $1.00 per share to the independent members of our Board, our officers and employees and certain consultants. The options vested 25% upon grant with the remaining shares vesting ratably over three years for independent directors, officers and employees, and over two years for consultants. We valued the options granted in May 2019 using the Black-Scholes Option Pricing Model and the following weighted average assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">May 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.80</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">2.12</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.53</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">85.90</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">1,220,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.54</td> <td> </td></tr> </table>   Additionally, in May 2019, the Compensation Committee approved, subject to subsequent stockholder approval at our 2019 Annual Meeting of Stockholders (Annual Meeting) held in September 2019, the 2019 Omnibus Equity Incentive Plan (the 2019 Plan) and designated 7.5 million shares of our authorized common stock to be reserved thereunder. Further, in May 2019, the Compensation Committee granted options pursuant to the 2019 Plan to one of our officers to purchase 170,000 shares of our common stock at a then above-market exercise price of $1.00 per share, which grant was contingent upon the approval of the 2019 Plan by our stockholders. Our stockholders approved the 2019 Plan at our Annual Meeting and ratified the contingent grant. The option vested 25% upon approval of the 2019 Plan and the remaining shares vest ratably over three years. We valued the option using the Black-Scholes Option Pricing Model and the following assumptions:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">Assumption:</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; text-align: justify">Market price per share at grant date</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">0.84</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Exercise price per share</td> <td> </td> <td>$</td> <td style="text-align: right">1.00</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Risk-free interest rate</td> <td> </td> <td> </td> <td style="text-align: right">1.45</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Expected term in years</td> <td> </td> <td> </td> <td style="text-align: right">5.58</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Volatility</td> <td> </td> <td> </td> <td style="text-align: right">86.04</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Dividend rate</td> <td> </td> <td> </td> <td style="text-align: right">0.0</td> <td>%</td></tr> <tr style="vertical-align: bottom"> <td>Shares</td> <td> </td> <td> </td> <td style="text-align: right">170,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Fair Value per share</td> <td> </td> <td>$</td> <td style="text-align: right">0.56</td> <td> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">As of September 30,</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">2019</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">2018</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: 75%">Series A Preferred stock issued and outstanding (1)</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 9%; text-align: right">750,000</td> <td style="width: 2%"> </td></tr> <tr style="vertical-align: bottom"> <td>Series B Preferred stock issued and outstanding (2)</td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1,160,240</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Series C Preferred stock issued and outstanding (3)</td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,318,012</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan</td> <td> </td> <td> </td> <td style="text-align: right">8,014,838</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">6,160,338</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Outstanding warrants to purchase common stock</td> <td> </td> <td> </td> <td style="text-align: right">21,242,954</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">20,709,516</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right"> </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"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Total</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">33,486,044</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">31,098,106</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 70%">____________</td> <td style="width: 1%"> </td> <td style="width: 14%"> </td> <td style="width: 1%"> </td> <td style="width: 14%"> </td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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; excludes common shares issuable in payment of dividends on Series B Preferred upon conversion.</td></tr> <tr style="vertical-align: top"> <td colspan="5" style="text-align: justify">(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></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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%"> Laboratory equipment</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">892,500</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">892,500</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Tenant improvements</td> <td> </td> <td> </td> <td style="text-align: right">214,400</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">214,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Computers and network equipment</td> <td> </td> <td> </td> <td style="text-align: right">54,600</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">54,600</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Office furniture and equipment</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">84,600</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">84,600</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">1,246,100</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">1,246,100</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> Accumulated depreciation and amortization</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">(985,500</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">(933,400</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> Property and equipment, net</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">260,600</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">312,700</td> <td style="padding-bottom: 3pt"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> September 30,</td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> March 31,</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"> 2019</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"> 2019</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%"> Office equipment subject to financing lease</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">14,700</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">14,700</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> Accumulated depreciation</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">(8,000</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">(6,500</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td> Net book value of office equipment subject to financing lease</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">6,700</td> <td style="padding-bottom: 3pt"> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">8,200</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td colspan="2" style="text-align: center"> Exercise</td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td> <td style="text-align: center">Weighted</td> <td> </td> <td colspan="2" style="text-align: center">Warrants Outstanding</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td colspan="2" style="text-align: center">   Price      </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Average</td> <td> </td> <td style="text-align: center">Expiration</td> <td> </td> <td colspan="2" style="text-align: center">and Exercisable at</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center"> per Share</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">per Share</td> <td style="padding-bottom: 1.5pt"> </td> <td> Date</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <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> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">1.50</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 16%; text-align: right">1.50</td> <td style="width: 1%"> </td> <td style="width: 43%; text-align: center">11/30/2021 to 12/13/2022</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 16%; text-align: right">14,335,200</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">1.59 - $1.80</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1.67</td> <td> </td> <td style="text-align: center">2/28/2022 to 10/10/2022</td> <td> </td> <td> </td> <td style="text-align: right">625,619</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">1.82</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">1.82</td> <td> </td> <td style="text-align: center">3/7/2023</td> <td> </td> <td> </td> <td style="text-align: right">1,388,931</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">2.00 - $3.51</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">2.14</td> <td> </td> <td style="text-align: center">4/30/2021 to 10/19/2022</td> <td> </td> <td> </td> <td style="text-align: right">696,693</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td>$</td> <td style="text-align: right">5.30</td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">5.30</td> <td> </td> <td style="text-align: center">5/16/2021</td> <td> </td> <td> </td> <td style="text-align: right">2,705,883</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt">$</td> <td style="padding-bottom: 1.5pt; text-align: right">6.00 - $10.00</td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt">$</td> <td style="padding-bottom: 1.5pt; text-align: right">7.15</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: center">10/11/2019 to 3/3/2023</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">1,490,628</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td>$</td> <td style="text-align: right">2.43</td> <td> </td> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double"> </td> <td style="border-bottom: black 1pt double; text-align: right">21,242,954</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: black 1pt solid"> As of September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Assets</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%; padding-left: 0.25in">Right of use asset – operating lease</td> <td style="width: 1%; padding-bottom: 3pt"> </td> <td style="width: 1%; border-bottom: black 1pt double">$</td> <td style="width: 9%; border-bottom: black 1pt double; text-align: right">3,750,200</td> <td style="width: 1%; padding-bottom: 3pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Liabilities</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Current operating lease obligation</td> <td> </td> <td>$</td> <td style="text-align: right">289,600</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Non-current operating lease obligation</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">3,879,400</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>Total operating lease liability</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">4,169,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2"> For the Three Months  Ended</td> <td> </td> <td> </td> <td colspan="2"> For the Six Months  Ended</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">September 30, 2019</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">September 30, 2019</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%; padding-left: 0.25in; text-indent: -0.25in">Operating lease cost</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">203,100</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">411,900</td> <td style="width: 1%"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> Fiscal Years Ending March 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%">2020 (remaining six months)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">315,500</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td>2021</td> <td> </td> <td> </td> <td style="text-align: right">645,800</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2022</td> <td> </td> <td> </td> <td style="text-align: right">668,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2023</td> <td> </td> <td> </td> <td style="text-align: right">726,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">766,000</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">2,720,400</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Total lease expense</td> <td> </td> <td> </td> <td style="text-align: right">5,842,100</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Less imputed interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">(1,673,100</td> <td style="padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.25in">Present value of operating lease liabilities</td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">4,169,000</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td> Fiscal Years Ending March 31,</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center"> </td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 88%">2020</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 9%; text-align: right">623,900</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom"> <td>2021</td> <td> </td> <td> </td> <td style="text-align: right">645,800</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2022</td> <td> </td> <td> </td> <td style="text-align: right">668,400</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2023</td> <td> </td> <td> </td> <td style="text-align: right">225,300</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">-</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Thereafter</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">-</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 3pt"> </td> <td style="border-bottom: black 1pt double">$</td> <td style="border-bottom: black 1pt double; text-align: right">2,163,400</td> <td style="padding-bottom: 3pt"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="vertical-align: bottom"> </td> <td colspan="4" style="vertical-align: bottom">For the Six Months  Ended </td></tr> <tr> <td style="vertical-align: bottom"> </td> <td colspan="4" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">September 30, 2019</td></tr> <tr style="vertical-align: bottom"> <td style="width: 80%">Cash paid for amounts included in the measurement of lease liabilities</td> <td style="width: 10%"> </td> <td style="width: 1%">$</td> <td style="width: 8%; text-align: right">374,200</td> <td style="width: 1%"> </td></tr> </table>

.80

.84

2.43

1.50

1.67

1.82

2.14

5.30

7.15

1.00

.0212

.0145

P5Y6M11D

P5Y6M29D

.8590

.8604

.0000

.54

.56

33486044

31098106

750000

1160240

8014838

6160338

21242954

20709516

2318012

11/30/2021 to 12/13/2022 2/28/2022 to 10/10/2022 3/7/2023 4/30/2021 to 10/19/2022 5/16/2021 10/11/2019 to 3/3/2023

21242954

14335200

625619

1388931

696693

2705883

1490628

4169000

411900

203100

315500

645800

726000

766000

2720400

5842100

1673100

623900

645800

668400

225300

2163400

P7Y10M2D

.0854

374200

<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif"> <tr> <td style="font-size: 12pt; vertical-align: top"> </td> <td style="font-size: 12pt; vertical-align: top"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: black 1pt solid; vertical-align: bottom">September 30, 2019  </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: black 1pt solid; vertical-align: bottom">March 31, 2019  </td></tr> <tr> <td style="font-size: 12pt; vertical-align: top; padding-bottom: 1.5pt; width: 12%"> </td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%">Accrued</td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%"> </td> <td style="vertical-align: top; text-align: center; width: 11%">Accrued</td> <td style="font-size: 12pt; vertical-align: top; width: 11%"> </td> <td style="font: 11pt Calibri, Helvetica, Sans-Serif; vertical-align: middle; width: 11%"> </td></tr> <tr style="vertical-align: top"> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Balance</td> <td style="border-bottom: black 1pt solid; text-align: center">Interest</td> <td style="border-bottom: black 1pt solid; text-align: center">Total</td> <td style="font-size: 12pt"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Balance</td> <td style="border-bottom: black 1pt solid; text-align: center">Interest</td> <td style="border-bottom: black 1pt solid; text-align: center">Total</td></tr> <tr style="vertical-align: top"> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td> <td style="font-size: 12pt"> </td></tr> <tr style="vertical-align: top"> <td>7.75% and 7.15% Notes payable to insurance premium financing company (current)</td> <td style="font-size: 12pt"> </td> <td style="text-align: right"> $ 159,300</td> <td style="text-align: right"> $ -</td> <td style="text-align: right"> $ 159,300</td> <td style="font-size: 12pt"> </td> <td style="text-align: right"> $ 57,300</td> <td style="text-align: right"> $ -</td> <td style="text-align: right"> $ 57,300</td></tr> </table>

Yes NV 001-37761 Common Stock, par value $0.001 per share VTGN NASDAQ

We have evaluated subsequent events through November 6, 2019 and have identified the following matters requiring disclosure:   Grant of Options from the 2019 Plan   During October 2019, we granted options from our 2019 Plan to the independent members of our Board, our officers and employees and certain consultants to purchase an aggregate of 1,575,000 shares of our common stock at an exercise price of $1.41 per share, the quoted closing market price of our common stock on the Nasdaq Capital Market on the grant date. The options were vested 25% at grant with the remaining options vesting ratably over the following 24 months.   Common Stock and Warrants Issued in Fall 2019 Private Placement   Between October 30, 2019 and November 6, 2019, in a self-placed private placement and pursuant to subscription agreements from accredited investors, we sold to such investors units, at a purchase price of $1.00 per unit, consisting of an aggregate of 600,000 unregistered shares of our common stock and warrants, exercisable through November 1, 2023, to purchase 300,000 unregistered shares of our common stock at an exercise price of $2.00 per share. The purchasers of the units have no registration rights with respect to the shares of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable prior to six months and one day following issuance. We received aggregate cash proceeds of $600,000 from the sale of the units.

Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended. Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015; excludes common shares issuable in payment of dividends on Series B Preferred upon conversion. 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.