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<p style="margin: 0pt"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Overview</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VistaGen Therapeutics. Inc., a Nevada corporation
(which may be referred to as <i>VistaGen</i>, the <i>Company</i>, <i>we</i>, <i>our</i>, or <i>us</i>), is a clinical-stage biopharmaceutical
company focused on developing new generation medicines for depression and other diseases and disorders of the central nervous system
(<i>CNS</i>) with high unmet need.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our lead CNS product candidate, AV-101, is an
oral, non-opioid and non-sedating therapy that we believe offers the potential to be a new at-home treatment for multiple CNS indications
with high unmet medical need. These indications include potential use as a new generation treatment alternative for Major Depressive
Disorder (<i>MDD</i>), as a non-addictive, non-sedating option for management of chronic neuropathic pain (<i>CNP</i>), to reduce
dyskinesia induced by levodopa (L-DOPA) therapy for Parkinson’s disease (<i>PD LID</i>), to reduce suicidal ideation and
for additional CNS indications <font style="color: #333333; background-color: white">where modulation of NMDA (N-methyl-D-aspartate)
receptor and AMPA (alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid) receptor pathways may achieve therapeutic benefit.
</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For MDD, we believe AV-101 has potential as
an oral, at home, stand-alone first line therapy and as an adjunctive therapy. As an adjunctive therapy, we believe AV-101 has
potential to both (i) augment current antidepressants approved by the U.S. Food and Drug Administration (<i>FDA</i>) and displace
atypical antipsychotics, such as aripiprazole, in the current MDD drug treatment paradigm for patients with MDD who have an inadequate
response to standard antidepressants, and (ii) prevent relapse of MDD and/or suicidal ideation following successful treatment with
the FDA-approved anesthetic, ketamine hydrochloride (<i>ketamine</i>) when used to treat patients with treatment-resistant MDD,
whether administered by intravenous (<i>IV</i>) injection or as an intranasal spray formulation. We believe AV-101 may have potential
to deliver ketamine-like antidepressant effects as an oral therapy on an at-home basis, without the requirement for inconvenient
administration in a medical setting or the use of needles, and without causing psychological or other side effects and safety concerns
associated with ketamine therapy.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">AV-101 is currently in Phase 2 development in
the United States. In the fourth quarter of 2017, we received authorization from the FDA to initiate ELEVATE, our Phase 2 multi-center,
multi-dose, double blind, placebo-controlled clinical study to evaluate the efficacy and safety of AV-101 as an adjunctive treatment
of MDD in adult patients with an inadequate therapeutic response to current FDA-approved antidepressants (the <i>ELEVATE Study</i>). As
planned, we initiated the ELEVATE Study in the first quarter of 2018. Dr. Maurizio Fava, Professor of Psychiatry at Harvard Medical
School and Director, Division of Clinical Research, Massachusetts General Hospital (<i>MGH</i>) Research Institute, is the Principal
Investigator of the ELEVATE Study assisting our internal team, which is led by Mark Smith, MD, PhD, our Chief Medical Officer. Dr.
Fava was the co-Principal Investigator with Dr. A. John Rush of the STAR*D study, the largest clinical trial conducted in depression
to date, whose findings were published in journals such as the <i>New England Journal of Medicine</i> (<i>NEJM</i>) and the <i>Journal
of the American Medical Association</i> (<i>JAMA</i>). We currently anticipate top line results from the ELEVATE Study by the end
of the first half of 2019.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">AV-101 is also the subject of two small government-funded
clinical studies. The first study is a small Phase 2 clinical study being conducted and funded by the U.S. National Institute of
Mental Health (the <i>NIMH</i>), pursuant to our Cooperative Research and Development Agreement (<i>CRADA</i>) with the NIMH (the
<i>NIMH Study</i>). Dr. Carlos Zarate, Jr., Chief of the NIMH’s Experimental Therapeutics & Pathophysiology Branch and
its Section on Neurobiology and Treatment of Mood and Anxiety Disorders, is acting as the Principal Investigator for the NIMH Study,
which is focused on AV-101 monotherapy for subjects with treatment-resistant MDD and certain biomarkers. Dr. Zarate and the NIMH
were among the first in the U.S. to conduct clinical studies in MDD patients with inadequate responses to multiple current FDA-approved
antidepressants that demonstrated the robust, fast-acting antidepressant effects of ketamine within twenty-four hours of a single
sub-anesthetic dose administered by IV injection. We are collaborating with Baylor College of Medicine (<i>Baylor</i>) and the
U.S. Department of Veterans Affairs (<i>VA</i>) on the second study, which is a small first-step clinical trial involving healthy
volunteer Veterans from either Operation Enduring Freedom, Operation Iraqi Freedom or Operation New Dawn designed to test potential
anti-suicidal effects of AV-101 in Veterans (the <i>Baylor Study</i>). Dr. Marijn Lijffijt of Baylor is the Principal Investigator
of the Baylor Study. VistaGen and the VA entered into a Material Transfer Cooperative Research and Development Agreement (<i>MT
CRADA</i>) regarding clinical trial material for the Baylor Study, and government funding from the VA will be provided for substantially
all other study costs.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to our CNS business, we have two
additional programs through our wholly-owned subsidiary VistaGen Therapeutics, Inc., a California corporation, dba VistaStem Therapeutics
(<i>VistaStem</i>). VistaStem is focused on applying human pluripotent stem cell (<i>hPSC</i>) technology to rescue, develop and
commercialize (i) proprietary new chemical entities (<i>NCEs</i>) for CNS and other diseases, and (ii) regenerative medicine (<i>RM</i>)
involving hPSC-derived blood, cartilage, heart and liver cells.  Our internal drug rescue programs are designed to utilize <i>CardioSafe
3D</i>, our customized cardiac bioassay system, to develop small molecule NCEs for our pipeline or out-licensing.  To advance
potential RM applications of VistaStem’s cardiac stem cell technology, we have exclusively sublicensed to BlueRock Therapeutics
LP, a next generation cell therapy and RM company established in 2016 with $225 million of committed capital from Bayer AG and
Versant Ventures (<i>BlueRock Therapeutics</i>), rights to certain proprietary technologies relating to the production of cardiac
stem cells for the treatment of heart disease (the <i>BlueRock Agreement</i>). In a manner similar to the BlueRock Agreement,
we may pursue additional VistaStem 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Subsidiaries </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As noted above, VistaStem is our wholly-owned
subsidiary. Our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q (<i>Report</i>) also include
the accounts of VistaStem’s two wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation, and
VistaStem Canada, Inc., a corporation organized under the laws of Ontario, Canada.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (<i>U.S.
GAAP</i>) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly,
they do not contain all of the information and footnotes required for complete consolidated financial statements. In the opinion
of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly our interim financial information. The accompanying Condensed Consolidated
Balance Sheet at March 31, 2018 has been derived from our audited consolidated financial statements at that date but does not include
all disclosures required by U.S. GAAP.  The operating results for the three months ended June 30, 2018 are not necessarily
indicative of the operating results to be expected for our fiscal year ending March 31, 2019, or for any other future interim or
other period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements and notes to Condensed Consolidated Financial Statements contained in this Report should be read in conjunction
with our audited Consolidated Financial Statements for our fiscal year ended March 31, 2018 contained in our Annual Report on Form
10-K, as filed with the Securities and Exchange Commission (<i>SEC</i>) on June 26, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared assuming we will continue as a going concern. As a 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 $160.8 million accumulated from inception (May 1998) through
June 30, 2018. We expect losses and negative cash flows from operations to continue for the foreseeable future as we engage in
further potential development of AV-101, initially as an adjunctive treatment for MDD and subsequently as a new treatment alternative
for other CNS conditions, execute our drug rescue programs and pursue potential drug development and regenerative medicine opportunities.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Since our inception in May 1998 through June
30, 2018, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and
debt securities for cash proceeds of approximately $61.4 million, as well as from an aggregate of approximately $17.6 million of
government research grant awards (excluding the fair market value of the NIMH Study and the Baylor Study), strategic collaboration
payments, intellectual property sublicensing and other revenues. Additionally, we have issued equity securities with an approximate
value at issuance of $33.7 million in non-cash settlements of certain liabilities, including liabilities for professional services
rendered to us or as compensation for such services.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2018, we had cash and cash equivalents
of $7.2 million.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our cash position at June 30, 2018 considered
with our recurring and anticipated losses, negative cash flows from operations and limited stockholders’ equity 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, including expenditures required to satisfy a significant portion of
the projected expenses associated with our ELEVATE Study, raising substantial doubt that we can continue as a going concern. However,
to alleviate that doubt, since June 30, 2018 we have raised $3.36 million of additional capital as described below, and we plan,
as we have numerous times in the past, to raise additional capital when and as needed, primarily through the sale of our equity
securities in one or more private placements to accredited investors or public offerings.</p>
<p style="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Between July 1, 2018 and August 13, 2018, we
sold to accredited investors units consisting of an aggregate of 2,688,000 unregistered shares of our common stock, par value $0.001
per share, and warrants exercisable at least six months and one day following issuance and through February 28, 2022 to purchase
2,688,000 unregistered shares of our common stock at $1.50 per share, from which we received cash proceeds of $3,360,000 (the <i>2018
Private Placement</i>). See Note 10, <i>Subsequent Events</i>, for additional information regarding the 2018 Private Placement.
Further, subject to certain restrictions, our effective Registration Statement on Form S-3 (Registration No. 333-215671) (the <i>S-3
Registration Statement</i>) remains available for future sales of our equity securities in one or more public offerings from time
to time. While we may make additional sales of our equity securities under the S-3 Registration Statement, we do not have an obligation
to do so. As we have been in the past, we expect that, if 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In addition to the potential sale of our equity
securities, we may also seek to enter research, development and commercialization collaborations that could generate revenue or
provide funding, including non-dilutive funding, for development of AV-101 and/or additional product candidates. We may also seek
additional government grant awards or agreements similar, for example, to our current CRADA with the NIMH, which provides for the
NIMH to fully fund the NIMH Study, or 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. In a manner similar to the BlueRock Agreement, we may also pursue
similar arrangements with third-parties involving our intellectual property. Although we may seek additional collaborations
that could generate revenue and/or non-dilutive funding for development of AV-101 and other product candidates, as well as new
government grant awards and/or agreements similar to our CRADA with NIMH, no assurance can be provided that any such collaborations,
awards or agreements will occur in the future.  </p>
<p style="font: 8pt Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our future working capital requirements will
depend on many factors, including, without limitation, the scope and nature of opportunities related to our success and the success
of certain other companies in clinical trials, including our development and commercialization of AV-101 as an adjunctive treatment
for MDD and other potential CNS conditions, 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 and our stem cell technology platform, as well as support our operating
activities, we plan to continue to carefully manage our routine operating costs, including our employee headcount and related expenses,
as well as costs relating to regulatory consulting, contract research and development, investor relations and corporate development,
legal, acquisition and protection of intellectual property, public company compliance and other professional services and operating
costs. </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notwithstanding the foregoing, there can be
no assurance that future financings will be available in sufficient amounts, in a timely manner, or on terms acceptable to us,
if at all. If we are unable to obtain substantial additional financing on a timely basis when needed in 2018 or 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Use of Estimates</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.  Significant estimates include
those relating to share-based compensation, and assumptions that have been used historically to value warrants and warrant modifications.
With the exception of the 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Research and Development Expenses</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses are composed
of both internal and external costs.  Internal costs include salaries and employment-related expenses, 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, stem cell research and development costs, and
costs related to the application and prosecution of patents related to AV-101 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 (<i>CRO</i>s) 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Stock-Based Compensation</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We recognize compensation cost for all stock-based
awards to employees 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 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.  For option grants to non-employees, we re-measure the
fair value of the awards as they vest and the resulting value is recognized as an expense during the period over which the services
are performed. Compensatory grants of stock to non-employees are generally treated as fully-earned at the time of the grant and
the non-cash expense recognized is based on the quoted market price of the stock on the date of grant.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months
ended June 30, 2018 and 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> Three Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 75%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="width: 2%; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">612,600</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We did not grant any options pursuant to our
2016 Amended and Restated Stock Incentive Plan (the <i>2016 Plan</i>) to employees or consultants during the three months ended
June 30, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2018, there were stock options outstanding
to purchase 5,300,338 shares of our common stock at a weighted average exercise price of $2.43 per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 10, <i>Subsequent Events</i>, for information
regarding option grants made during August 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Comprehensive Loss</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have no components of other comprehensive
loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Loss per Common Share</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic net 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 (<i>Series B Preferred</i>), 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for both periods
presented, potentially dilutive securities were excluded from the computation of diluted 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:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans (1999 Plan in 2017 only)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">5,300,338</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,522,593</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,638,516</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,796,506</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">26,167,106</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Fair Value Measurements</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We do not use derivative instruments for hedging
of market risks or for trading or speculative purposes. We carried no assets or liabilities at fair value at June 30, 2018 or March 31,
2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b>Recent Accounting Pronouncements</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Except as described below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during the three months ended June 30, 2018, as compared
to the recent accounting pronouncements described in our Form 10-K for our fiscal year ended March 31, 2018, that are of significance
or potential significance to us.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2018, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 2018-07, <i>Compensation-Stock Compensation (Topic 718), Improvements
to Nonemployee Share-Based Payment Accounting</i> (<i>ASU 2018-07</i>). ASU 2018-07 expands the scope of Topic 718 to include share-based
payment transactions for acquiring goods and services from nonemployees. Under ASU 2018-07, consistent with the accounting requirement
for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are to be measured
at the grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or
the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
Equity-classified nonemployee share-based payment awards are to be measured at the grant date. The definition of the term grant
date<i> </i>is amended to generally state the date at which a grantor and a grantee<i> </i>reach a mutual understanding
of the key terms and conditions of a share-based payment award. ASU 2018-07 specifies that Topic 718 applies to all share-based
payment transactions in which a grantor acquires goods or services to be used or consumed in its own operations by issuing share-based
payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1)
financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract
accounted for under Topic 606, <i>Revenue from Contracts with Customers</i> (<i>Topic 606</i>). ASU 2018-07 is effective for public
business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early
adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. We expect to adopt ASU 2018-07 as of April
1, 2019, and we are evaluating the expected impact of this new guidance on our financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02,
<i>Leases</i> (<i>ASC 842</i>), which will replace the existing guidance in ASC 840, <i>Leases</i>, and which sets 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 standard requires 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 current guidance
for operating leases. This standard will become effective for our fiscal year beginning April 1, 2019, with early adoption permitted.
We expect to adopt the standard as of April 1, 2019, and are continuing to evaluate the expected impact of this new guidance on
our consolidated financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Prepaid expenses and other current assets are composed of the following
at June 30, 2018 and March 31, 2018:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">352,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">505,900</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Insurance</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">227,400</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">88,300</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering filing fees and expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">11,800</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">24,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">617,300</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">644,800</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Property and equipment is composed of the following at June 30, 2018
and March 31, 2018:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Laboratory equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">888,300</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">888,300</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Tenant improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">193,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">26,900</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Computers and network equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">54,600</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">54,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Office furniture and equipment</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,216,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,049,500</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accumulated depreciation and amortization</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(857,100</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(842,100</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Property and equipment, net</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">359,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">207,400</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The increase in tenant improvements reflects
construction in progress at our South San Francisco, California offices at June 30, 2018, including approximately $113,700 of which
is included in our Accounts Payable balance at that date. Under the terms of our November 2016 lease extension agreement, our landlord
will reimburse us for up to $163,600 of such tenant improvement costs.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">Accrued expenses are composed of the following at June 30, 2018 and
March 31, 2018:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">889,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">176,600</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">164,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">27,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">2,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,057,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">206,300</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">The following table summarizes our unsecured promissory notes at
June 30, 2018 and March 31, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2018</td><td style="font-weight: normal; font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><b>March 31, 2018</b> <font style="font: normal 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Principal</td><td> </td>
<td colspan="3" style="text-align: center">Accrued</td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center">Principal</td><td> </td>
<td colspan="3" style="text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Total</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Total</td></tr>
<tr style="vertical-align: bottom">
<td style="width: 34%; text-align: left">6.50% and 7.15% Notes payable to insurance premium financing company (current)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">181,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">181,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">53,900</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">53,900</td><td style="width: 1%; text-align: left"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2018, we executed a 6.50% promissory
note in the principal amount of $160,500 in connection with certain insurance policy premiums. The note is payable in monthly installments
of $16,500, including principal and interest, through March 2019, and had an outstanding balance of $144,800 at June 30, 2018.
In February 2018, we executed a 7.15% promissory note in the principal amount of $59,700 in connection with other insurance policy
premiums. That note is payable in monthly installments of $6,200, including principal and interest, through December 2018, and
had an outstanding balance of $36,300 at June 30, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in Private
Placement</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2018, in connection
with our self-placed 2018 Private Placement, we accepted a subscription agreement from an accredited investor, pursuant to which
we sold units, at a purchase price of $1.25 per unit, consisting of 40,000 unregistered shares of our common stock and warrants,
exercisable through February 28, 2022, to purchase 40,000 unregistered shares of our common stock at an exercise price of $1.50
per share. The purchaser of the units has no registration rights with respect to the shares of common stock, warrants or the shares
of common stock issuable upon exercise of the warrants comprising the units sold. The warrants are not exercisable until at least
six months and one day following the date of issuance. We received aggregate cash proceeds of $50,000 in connection with this self-placed
private placement transaction, and the entire amount of the proceeds was credited to stockholders’ equity. Refer to Note
10, <i>Subsequent Events</i>, for disclosure of additional cash proceeds to us from sales of units in the 2018 Private Placement
consummated after June 30, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Issuance of Common Stock to Professional
Services Providers</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2018, we issued
25,000 shares of our unregistered common stock having a fair value on the date of issuance of $24,000 as partial compensation to
an investor relations service provider. We also issued 75,000 shares of our unregistered common stock having a fair value on the
date of issuance of $99,000 as compensation under a financial advisory agreement.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Warrants Outstanding</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the quarter ended June 30, 2018, the
holder of a warrant to purchase 5,000 shares of our common stock at $1.50 per share issued in our December 2017 public offering
fully exercised the warrant and we received cash proceeds of $7,500. Following the warrant issuance in the 2018 Private Placement
and the warrant exercise, at June 30, 2018, we had outstanding warrants to purchase shares of our common stock at a weighted average
exercise price of $2.85 per share as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Warrants</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Exercise</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Outstanding at</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Price</b></font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 8pt"><b>Expiration</b></font></td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>June 30,</b></font></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"><font style="font-size: 8pt"><b>per Share</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: black 0.75pt solid"><b>Date</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2018</b></font></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> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 2%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 26%; text-align: right"><font style="font-size: 8pt">1.50</font></td>
<td style="width: 2%"> </td>
<td style="width: 38%"><font style="font-size: 8pt">11/30/2021 to 12/13/2022</font></td>
<td style="width: 2%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 8pt">10,185,000</font></td>
<td style="width: 2%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td> </td>
<td><font style="font-size: 8pt">3/7/2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,388,931</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">4/30/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">523,573</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.51</font></td>
<td> </td>
<td><font style="font-size: 8pt">12/31/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">4.50</font></td>
<td> </td>
<td><font style="font-size: 8pt">9/26/2019</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td> </td>
<td><font style="font-size: 8pt">5/16/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">6.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">9/26/2019 to 11/30/2019</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97,750</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">8.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">3/25/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">185,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">1/11/2020</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">20,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">$</font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">20.00</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td><font style="font-size: 8pt">9/15/2019</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">110,448</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,638,516 </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Of the warrants outstanding at June 30, 2018,
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 9,995,000 shares of common stock underlying the warrants exercisable at $1.50 per share issued in our December 2017 public
offering are registered for resale by the warrant holders. The common shares issuable upon exercise of our remaining outstanding
warrants are unregistered. At June 30, 2018, 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cato Holding Company (<i>CHC</i>), doing business
as Cato BioVentures (<i>CBV</i>), is the parent of Cato Research Ltd. (<i>CRL</i>). CRL is a contract research, development and
regulatory services organization (<i>CRO</i>) that we have engaged for a wide range of material aspects related to the nonclinical
and clinical development and regulatory affairs associated with our efforts to develop and commercialize AV-101 for MDD, including
our ELEVATE Study, and other potential CNS indications. CBV is among our largest institutional stockholders at June 30, 2018, holding
approximately 4% of our outstanding common stock.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2017, we entered into a Master Services
Agreement (<i>MSA</i>) with CRL, which replaced a substantially similar May 2007 master services agreement, pursuant to which CRL
may assist us in the evaluation, development, commercialization and marketing of our potential product candidates, including AV-101,
and provide regulatory and strategic consulting services as requested from time to time. Specific projects or services are and
will be delineated in individual work orders negotiated from time-to-time under the MSA. Under the terms of work orders issued
pursuant to the July 2017 MSA and our prior May 2007 master services agreement, we incurred expenses of $877,500 and $128,200 during
the quarters ended June 30, 2018 and 2017, respectively. We anticipate periodic expenses for CRO services from CRL related to nonclinical
and clinical development of, and regulatory affairs related to, AV-101 and other potential product candidates will increase in
future periods.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0">We have evaluated subsequent events through August 13, 2018 and have
identified the following matters requiring disclosure:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Common Stock and Warrants Issued in 2018
Private Placement </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Between July 1 and August 14, 2018, in connection
with our self-placed 2018 Private Placement, we accepted subscription agreements from accredited investors, pursuant to which we
sold to such investors units, at a purchase price of $1.25 per unit, consisting of an aggregate of 2,688,000 unregistered shares
of our common stock and warrants, exercisable through February 28, 2022, to purchase 2,688,000 unregistered shares of our common
stock at an exercise price of $1.50 per share. The purchasers of the units have no registration rights with respect to the shares
of common stock, warrants or the shares of common stock issuable upon exercise of the warrants comprising the units sold. The warrants
are not exercisable until at least six months and one day following the date of issuance. We received aggregate cash proceeds of
$3,360,000 in connection with these self-placed private placement transactions.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Issuance of Common Stock and Warrants
to Professional Services Providers</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During July 2018, we issued: (i) a four-year
warrant to purchase 48,000 unregistered shares of our common stock at an exercise price of $1.50 per share as compensation under
a financial advisory consulting agreement; and (ii) 50,000 unregistered shares of our common stock having a fair value on the date
of issuance of $68,000 and a four-year warrant to purchase 150,000 unregistered shares of our common stock at an exercise price
of $1.50 per share as partial compensation under an additional financial advisory consulting agreement.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Grant of Options from 2016 Plan</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 5, 2018, the Compensation Committee
of the Board approved the grant of options to independent members of the Board, certain officers and employees to purchase an aggregate
of 860,000 shares of our common stock at an exercise price of $1.27 per share, the quoted closing price of our common stock on
the Nasdaq Capital Markets on the trading date preceding the grant. 25% of the options will vest immediately upon grant, and the
remaining shares will vest ratably over the next twenty-four months.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.  Significant estimates include
those relating to share-based compensation, and assumptions that have been used historically to value warrants and warrant modifications.
With the exception of the 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Research and development expenses are composed
of both internal and external costs.  Internal costs include salaries and employment-related expenses, 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, stem cell research and development costs, and
costs related to the application and prosecution of patents related to AV-101 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 (<i>CRO</i>s) 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We recognize compensation cost for all stock-based
awards to employees 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 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.  For option grants to non-employees, we re-measure the
fair value of the awards as they vest and the resulting value is recognized as an expense during the period over which the services
are performed. Compensatory grants of stock to non-employees are generally treated as fully-earned at the time of the grant and
the non-cash expense recognized is based on the quoted market price of the stock on the date of grant.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below summarizes stock-based compensation
expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months
ended June 30, 2018 and 2017.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> Three Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 75%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="width: 2%; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">612,600</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We did not grant any options pursuant to our
2016 Amended and Restated Stock Incentive Plan (the <i>2016 Plan</i>) to employees or consultants during the three months ended
June 30, 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At June 30, 2018, there were stock options outstanding
to purchase 5,300,338 shares of our common stock at a weighted average exercise price of $2.43 per share.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">See Note 10, <i>Subsequent Events</i>, for information
regarding option grants made during August 2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have no components of other comprehensive
loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 (<i>Series B Preferred</i>), 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.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of our net loss for both periods
presented, potentially dilutive securities were excluded from the computation of diluted 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:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans (1999 Plan in 2017 only)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">5,300,338</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,522,593</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,638,516</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,796,506</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">26,167,106</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We do not use derivative instruments for hedging
of market risks or for trading or speculative purposes. We carried no assets or liabilities at fair value at June 30, 2018 or March 31,
2018.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Except as described below, there have been no
recent accounting pronouncements or changes in accounting pronouncements during the three months ended June 30, 2018, as compared
to the recent accounting pronouncements described in our Form 10-K for our fiscal year ended March 31, 2018, that are of significance
or potential significance to us.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2018, the Financial Accounting Standards
Board (<i>FASB</i>) issued Accounting Standards Update (<i>ASU</i>) 2018-07, <i>Compensation-Stock Compensation (Topic 718), Improvements
to Nonemployee Share-Based Payment Accounting</i> (<i>ASU 2018-07</i>). ASU 2018-07 expands the scope of Topic 718 to include share-based
payment transactions for acquiring goods and services from nonemployees. Under ASU 2018-07, consistent with the accounting requirement
for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are to be measured
at the grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or
the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
Equity-classified nonemployee share-based payment awards are to be measured at the grant date. The definition of the term grant
date<i> </i>is amended to generally state the date at which a grantor and a grantee<i> </i>reach a mutual understanding
of the key terms and conditions of a share-based payment award. ASU 2018-07 specifies that Topic 718 applies to all share-based
payment transactions in which a grantor acquires goods or services to be used or consumed in its own operations by issuing share-based
payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1)
financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract
accounted for under Topic 606, <i>Revenue from Contracts with Customers</i> (<i>Topic 606</i>). ASU 2018-07 is effective for public
business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early
adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. We expect to adopt ASU 2018-07 as of April
1, 2019, and we are evaluating the expected impact of this new guidance on our financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU 2016-02,
<i>Leases</i> (<i>ASC 842</i>), which will replace the existing guidance in ASC 840, <i>Leases</i>, and which sets 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 standard requires 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 current guidance
for operating leases. This standard will become effective for our fiscal year beginning April 1, 2019, with early adoption permitted.
We expect to adopt the standard as of April 1, 2019, and are continuing to evaluate the expected impact of this new guidance on
our consolidated financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> Three Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Research and development expense:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 75%; padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="width: 2%; padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">230,100</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">191,400</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> General and administrative expense:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt"><font style="font-size: 8pt"> Stock option grants</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">382,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">175,600</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Total stock-based compensation expense</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">612,600</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">367,000</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>As of June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2017</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt">Series A Preferred stock issued and outstanding (1)</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">750,000</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series B Preferred stock issued and outstanding (2)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,160,240</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Series C Preferred stock issued and outstanding (3)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,318,012</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding options under the Amended and Restated 2016 (formerly 2008) and 1999 Stock Incentive Plans (1999 Plan in 2017 only)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">5,300,338</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,522,593</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Outstanding warrants to purchase common stock</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,638,516</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">4,796,506</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">26,167,106</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"> </td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">11,547,351</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72%"><font style="font-size: 8pt">____________</font></td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td>
<td style="width: 1%"> </td>
<td style="width: 13%"> </td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015</font></td></tr>
<tr style="vertical-align: top">
<td colspan="5"><font style="font-size: 8pt">(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> AV-101 materials and services</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">352,200</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">505,900</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Insurance</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">227,400</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">88,300</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Public offering filing fees and expenses</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,900</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">11,800</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">24,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">617,300</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">644,800</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Laboratory equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">888,300</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">888,300</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Tenant improvements</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">193,500</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">26,900</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Computers and network equipment</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">54,600</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">54,600</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Office furniture and equipment</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,700</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">79,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,216,100</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,049,500</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accumulated depreciation and amortization</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(857,100</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(842,100</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Property and equipment, net</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">359,000</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">207,400</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> June 30,</b></font></td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b> March 31,</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b> 2018</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%"><font style="font-size: 8pt"> Accrued AV-101 development and related expenses</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">889,500</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">176,600</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> Accrued professional services</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">164,900</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">27,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt"> All other</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">3,500</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">2,700</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">1,057,900</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1pt double; text-align: right"><font style="font-size: 8pt">206,300</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30, 2018</td><td style="font-weight: normal; font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-weight: normal; font-style: normal; text-align: center; border-bottom: Black 1pt solid"><b>March 31, 2018</b> <font style="font: normal 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Principal</td><td> </td>
<td colspan="3" style="text-align: center">Accrued</td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center">Principal</td><td> </td>
<td colspan="3" style="text-align: center">Accrued</td><td> </td>
<td colspan="3"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Total</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Balance</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Interest</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Total</td></tr>
<tr style="vertical-align: bottom">
<td style="width: 34%; text-align: left">6.50% and 7.15% Notes payable to insurance premium financing company (current)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">181,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">181,100</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">53,900</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—  </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">53,900</td><td style="width: 1%; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Warrants</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Exercise</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Outstanding at</b></font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>Price</b></font></td>
<td> </td>
<td style="text-align: center"><font style="font-size: 8pt"><b>Expiration</b></font></td>
<td> </td>
<td colspan="2" style="text-align: center"><font style="font-size: 8pt"><b>June 30,</b></font></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"><font style="font-size: 8pt"><b>per Share</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; border-bottom: black 0.75pt solid"><b>Date</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2018</b></font></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> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 2%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 26%; text-align: right"><font style="font-size: 8pt">1.50</font></td>
<td style="width: 2%"> </td>
<td style="width: 38%"><font style="font-size: 8pt">11/30/2021 to 12/13/2022</font></td>
<td style="width: 2%"> </td>
<td style="width: 1%"> </td>
<td style="width: 26%; text-align: right"><font style="font-size: 8pt">10,185,000</font></td>
<td style="width: 2%"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">1.82</font></td>
<td> </td>
<td><font style="font-size: 8pt">3/7/2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,388,931</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">2.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">4/30/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">523,573</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">3.51</font></td>
<td> </td>
<td><font style="font-size: 8pt">12/31/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">50,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">4.50</font></td>
<td> </td>
<td><font style="font-size: 8pt">9/26/2019</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">25,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">5.30</font></td>
<td> </td>
<td><font style="font-size: 8pt">5/16/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2,705,883</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">6.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">9/26/2019 to 11/30/2019</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">97,750</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">7.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">12/11/2018 to 3/3/2023</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,346,931</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">8.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">3/25/2021</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">185,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td><font style="font-size: 8pt">$</font></td>
<td style="text-align: right"><font style="font-size: 8pt">10.00</font></td>
<td> </td>
<td><font style="font-size: 8pt">1/11/2020</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">20,000</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">$</font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">20.00</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td><font style="font-size: 8pt">9/15/2019</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">110,448</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">16,638,516 </font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt"> </font></td></tr>
</table>
61400000
17600000
26167106
11547351
750000
750000
1160240
1160240
5300338
2522593
16638516
4796502
2318012
2318012
505900
352200
88300
227400
25900
25900
24700
11800
644800
617300
176600
889500
27000
164900
2700
3500
53900
181100
181100
53900
0
0
0
0
53900
181000
181000
53900
11/30/2021 to 12/13/2022
3/7/2023
4/30/2021
12/31/2021
9/26/2019
5/16/2021
9/26/2019 to 11/30/2019
12/11/2018 to 3/3/2023
3/25/2021
1/11/2020
9/15/2019
16638516
10185000
1388931
523573
50000
25000
2705883
97750
1346931
185000
20000
110448
1.50
1.82
2.00
3.51
4.50
5.30
6.00
7.00
8.00
10.00
20.00
1049500
1216100
888300
193500
54600
79700
888300
26900
54600
79700
842100
857100
1758000
2197500