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NOTE 1 - History and Organization

VistaGen Therapeutics, Inc. (“VistaGen” or the “Company”), is a biotechnology company focused on using proprietary pluripotent stem cell technology for drug rescue and cell therapy. Drug rescue involves the combination of human pluripotent stem cell technology with modern medicinal chemistry to generate new chemical variants of once promising small molecule drug candidates that pharmaceutical companies have discontinued during preclinical or early clinical development due to heart or liver toxicity, despite positive efficacy data demonstrating their potential therapeutic and commercial benefits. VistaGen plans to use its pluripotent stem cell technology to generate early indications, or predictions, of how humans will ultimately respond to new drug candidates before they are ever tested in humans.

VistaGen successfully completed its initial Phase I safety study of AV-101 for neuropathic pain in December 2010. In the first quarter of calendar 2012, VistaGen began a Phase 1b clinical study of AV-101, which it expects to complete during 2012. Neuropathic pain, a serious and chronic condition causing pain after an injury or disease of the peripheral or central nervous system, affects approximately 1.8 million people in the U.S. alone. To date, VistaGen has been awarded over $8.9 million from the U.S. National Institutes of Health (NIH) for development of AV-101.

The Company is in the development stage and, since inception, has devoted substantially all of its time and efforts to stem cell research and stem-cell based bioassay development, small molecule drug development, creating, protecting and patenting intellectual property, recruiting personnel and raising working capital.

The Merger

VistaGen was incorporated in California on May 26, 1998 (inception date). Excaliber Enterprises, Ltd. (“Excaliber”) was organized as a Nevada corporation on October 6, 2005. On May 11, 2011, Excaliber acquired all outstanding shares of VistaGen for 6,836,452 shares of Excaliber’s common stock (the “Merger”), and assumed VistaGen’s pre-Merger obligations to contingently issue common shares in accordance with stock option agreements, warrant agreements, and a convertible promissory note. As part of the Merger, Excaliber repurchased 5,064,207 shares of its common stock from two stockholders for a nominal amount, leaving 784,500 shares of Excaliber common stock outstanding at the date of the Merger. The 6,836,452 shares issued to VistaGen stockholders in connection with the Merger represented approximately 90% of the outstanding shares of Excaliber’s common stock after the Merger. As a result of the Merger, the business of VistaGen became the business of Excaliber. Shortly after the Merger:

Each of the prior directors of VistaGen was appointed as a director of Excaliber;

The prior directors and officers of Excaliber resigned as officers and directors of Excaliber;

VistaGen’s prior officers were appointed as officers of like tenor of Excaliber;

Excaliber’s directors approved a two-for-one (2:1) forward stock split of Excaliber’s common stock;

Excaliber’s directors approved an increase in the number of shares of common stock Excaliber was authorized to issue from 200 million to 400 million shares;

Excaliber changed its name to “VistaGen Therapeutics, Inc.”;

VistaGen’s common stock began trading on the OTC Bulletin Board under the symbol “VSTA” effective on June 21, 2011; and

Excaliber adopted VistaGen's fiscal year-end of March 31, with VistaGen as the accounting acquirer.

VistaGen, as the accounting acquirer in the Merger, recorded the Merger as the issuance of stock for the net monetary assets of Excaliber, accompanied by a recapitalization. This accounting for the transaction was identical to that resulting from a reverse acquisition, except that no goodwill or other intangible assets were recorded. A total of 1,569,000 shares of common stock, representing the shares held by stockholders of Excaliber immediately prior to the Merger and effected for the post-Merger two-for-one forward stock split noted above, have been retroactively reflected as outstanding for all periods presented in the accompanying Condensed Consolidated Financial Statements.

In October 2011, the Company’s stockholders amended the Company’s Articles of Incorporation to (1) reduce the number of shares of common stock the Company is authorized to issue from 400 million shares to 200 million shares; (2) authorize the Company to issue up to 10 million shares of preferred stock; and (3) authorize the Company’s Board of Directors to prescribe the classes, series and the number of each class or series of preferred stock and the voting powers, designations, preferences, limitations, restrictions and relative rights of each class or series of preferred stock. In December 2011, the Company’s Board of Directors authorized the creation of a series of up to 500,000 shares of Series A Preferred Stock, par value $0.001 (“Series A Preferred”). Each share of Series A Preferred is convertible at the option of the holder into ten shares of the Company's common stock.

The consolidated financial statements in this report represent the activity of VistaGen (the California corporation) from May 26, 1998, and the consolidated activity of VistaGen (the California corporation) and Excaliber from May 11, 2011 (the date of the Merger). The consolidated financial statements also include the accounts of VistaGen’s wholly-owned subsidiaries, Artemis Neuroscience, Inc. (“Artemis”), a Maryland corporation, and VistaStem Canada, Inc., an Ontario corporation.

Basis of Presentation and Going Concern

3 Months Ended

Jun. 30, 2012

NOTE 2 - Basis of Presentation and Going Concern

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not contain all of the information and footnotes required for complete consolidated financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial information. The accompanying Condensed Consolidated Balance Sheet at March 31, 2012 has been derived from the Company's audited consolidated financial statements at that date but do not include all disclosures required by U.S. GAAP. Additionally, certain reclassifications have been made in the Condensed Consolidated Balance Sheet at March 31, 2012 to conform to current year presentation. The operating results for the three months ended June 30, 2012 are not necessarily indicative of the operating results to be expected for the Company's fiscal year ending March 31, 2013 or for any other interim period or any other future year.

The accompanying unaudited Condensed Consolidated Financial Statements and notes to Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements for the fiscal year ended March 31, 2012 contained in its Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission.

The accompanying Condensed Consolidated Financial Statements have been prepared assuming the Company will continue as a going concern. As a development stage company without sustainable revenues, the Company has experienced recurring losses and negative cash flows from operations. From inception through June 30, 2012, the Company has a deficit accumulated during its development stage of $56.6 million. The Company expects these conditions to continue for the foreseeable future as it expands its Human Clinical Trials in a Test Tube™ platform and executes its drug rescue and cell therapy business programs.

At June 30, 2012, the Company had $31,700 in cash and cash equivalents. On July 2, 2012, Platinum Long Term Growth Fund VII, LLC (“Platinum”), the Company's largest institutional investor, purchased from the Company a secured 10% convertible promissory note in the principal amount of $500,000 (the “July 2012 Platinum Note”). (See Note 11, Subsequent Events.) In the event the Company consummates an equity or equity-based financing, or series of financing transactions resulting in gross proceeds to the Company of at least $3.0 million (“Qualified Financing”), the principal and accrued interest due under the terms of the July 2012 Platinum Note shall automatically convert into such securities as are issued in connection with the Qualified Financing. In connection with the Company's June 29, 2012 Exchange Agreement with Platinum (see Note 9, Capital Stock), Platinum has also agreed to invest at least $500,000 in the Qualified Financing, provided that the Company secures binding commitments from other investors in the Qualified Financing aggregating at least $3.0 million prior to September 29, 2012. The Company does not believe that its cash and cash equivalents at June 30, 2012, together with the proceeds of the July 2012 Platinum Note will enable it to fund its operations through the next twelve months. The Company anticipates that its cash expenditures during the next twelve months will be approximately $4 million to $6 million and it plans to meet its cash needs and fund its working capital requirements through a combination of additional private placements of its securities, which may include both debt and equity securities, stem cell technology-based research and development collaborations, stem cell technology and drug candidate license fees and government grant awards. If the Company is unable to obtain sufficient financing, it may be required to reduce, defer, or discontinue certain of its research and development activities or it may not be able to continue as a going concern.

Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2012

NOTE 3 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include those relating to revenue recognition, share-based compensation, and assumptions that have been used to value warrant modifications and previous put option, note term extension and warrant liabilities.

Revenue Recognition

The Company generates revenue principally from collaborative research and development arrangements, technology access fees, and government grants. Revenue arrangements with multiple components are divided into separate units of accounting if certain criteria are met, including whether the delivered component has stand-alone value to the customer. Consideration received is allocated among the separate units of accounting based on their respective selling prices. The selling price for each unit is based on vendor-specific objective evidence, or VSOE, if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. The applicable revenue recognition criteria are then applied to each of the units.

The Company recognizes revenue when the four basic criteria of revenue recognition are met: (1) a contractual agreement exists; (2) the transfer of technology has been completed or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. For each source of revenue, the Company complies with the above revenue recognition criteria in the following manner:

•

Collaborative arrangements typically consist of non-refundable and/or exclusive technology access fees, cost reimbursements for specific research and development spending, and various milestone and future product royalty payments. If the delivered technology does not have stand-alone value, the amount of revenue allocable to the delivered technology is deferred. Non-refundable upfront fees with stand-alone value that are not dependent on future performance under these agreements are recognized as revenue when received, and are deferred if the Company has continuing performance obligations and has no objective and reliable evidence of the fair value of those obligations. The Company recognizes non-refundable upfront technology access fees under agreements in which it has a continuing performance obligation ratably, on a straight-line basis, over the period in which the Company is obligated to provide services. Cost reimbursements for research and development spending are recognized when the related costs are incurred and when collectability is reasonably assured. Payments received related to substantive, performance-based “at-risk” milestones are recognized as revenue upon achievement of the milestone event specified in the underlying contracts, which represent the culmination of the earnings process. Amounts received in advance are recorded as deferred revenue until the technology is transferred, costs are incurred, or a milestone is reached.

•

Technology license agreements typically consist of non-refundable upfront license fees, annual minimum access fees and/or royalty payments. Non-refundable upfront license fees and annual minimum payments received with separable stand-alone values are recognized when the technology is transferred or accessed, provided that the technology transferred or accessed is not dependent on the outcome of the continuing research and development efforts. Otherwise, revenue is recognized over the period of the Company’s continuing involvement.

•

Government grants, which support the Company’s research efforts on specific projects, generally provide for reimbursement of approved costs as defined in the terms of grant awards. Grant revenue is recognized when associated project costs are incurred.

Research and Development Expenses

Research and development expenses include internal and external costs. Internal costs include salaries and employment related expenses of scientific personnel and direct project costs. External research and development expenses consist of sponsored stem cell research and development costs, costs associated with clinical and non-clinical development of AV-101, the Company’s small molecule prodrug candidate, and costs related to the application and prosecution of patents related to the Company’s stem cell technology, Human Clinical Trials in a Test Tube™, and AV-101. All such costs are charged to expense as incurred.

Stock-Based Compensation

The Company recognizes compensation cost for all share-based awards to employees based on the grant date fair value of the award. Share-based compensation expense is recognized over the period during which the employee is required to perform services in exchange for the award, which generally represents the scheduled vesting period. The Company has no awards with market or performance conditions. For equity awards to non-employees, the Company re-measures 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.

The Company recorded share-based compensation costs of $71,000 and $439,700 for the three month periods ended June 30, 2012 and 2011, respectively. During the three months ended June 30, 2012, the Company granted options to purchase an aggregate of 155,000 shares of its common stock at an exercise price of $0.51 per share (the quoted market price on the grant date) to its employees (excluding senior management) and certain scientific consultants. During the three months ended June 30, 2011, the Company granted options to purchase an aggregate of 800,000 shares of its common stock at an exercise price of $1.75 per share to certain of its employees and scientific consultants. At June 30, 2012, there were options outstanding to purchase 4,920,771 shares of the Company’s common stock at a weighted average exercise price of $1.51 per share.

Comprehensive Loss

The Company has no components of other comprehensive loss other than net loss, and accordingly the Company’s comprehensive loss is equivalent to net loss for the periods presented.

Loss per Common Share

Basic loss per share of common stock excludes the effect of dilution and is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Diluted loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock. For all periods presented, potentially dilutive securities are excluded from the computation in loss periods, as their effect would be antidilutive.

Potentially dilutive securities excluded from diluted net loss per common share are as follows:

	June 30,
	2012		2011

All series of preferred stock issued and outstanding		4,370,550		—
Outstanding options under the 2008 and 1999 Stock Incentive Plan and 1998 Scientific Advisory Board Plan		4,920,771		4,719,153
Outstanding warrants to purchase common stock		3,604,392		6,540,314
February 2012 12% convertible promissory notes and accrued interest ⁽¹⁾		347,897		—

Total		13,243,610		11,259,467
(1) assumes mandatory conversion in connection with a qualified financing at $2.00 per share, plus fee warrants to placement agent

Recent Accounting Pronouncements

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which was issued to enhance comparability between entities that report under U.S. GAAP and International Financial Reporting Standards (“IFRS”), and to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement became effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company’s adoption of this ASU effective April 1, 2012 did not have any impact on its results of operations or financial position; however it required modifying the format of the former “Condensed Consolidated Statements of Operations” to include total comprehensive loss and changing the title of the statements to “Condensed Consolidated Statements of Operations and Comprehensive Loss.”

In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. The Company’s adoption of ASU No. 2011-04 effective April 1, 2012 did not have a material impact on its consolidated results of operations or financial condition.

Fair Value Measurements

3 Months Ended

Jun. 30, 2012

NOTE 4 - Fair Value Measurements

The Company follows the principles of fair value accounting as they relate to its financial assets and financial liabilities. Fair value is defined as the estimated exit price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, rather than an entry price which represents the purchase price of an asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on several factors, including the instrument’s complexity. The required fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels is described as follows:

•

Level 1 — Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

•

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 — Unobservable inputs (i.e., inputs that reflect the reporting entity’s own assumptions about the assumptions that market participants would use in estimating the fair value of an asset or liability) are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Where quoted prices are available in an active market, securities are classified as Level 1 of the valuation hierarchy. If quoted market prices are not available for the specific financial instrument, then the Company estimates fair value by using pricing models, quoted prices of financial instruments with similar characteristics or discounted cash flows. In certain cases where there is limited activity or less transparency around inputs to valuation, financial assets or liabilities are classified as Level 3 within the valuation hierarchy.

The Company does not use derivative instruments for hedging of market risks or for trading or speculative purposes. No assets or liabilities were carried at fair value at June 30, 2012 or March 31, 2012.

During 2007 and 2008, the Company issued three convertible promissory notes with an aggregate principal balance of $4.0 million (the “Original Platinum Notes”) to Platinum Long Term Growth VII, LLC (“Platinum”). On May 5, 2011, the Original Platinum Notes were amended, restated and consolidated into a single note (the “Platinum Note”) with a principal balance of $4.0 million (“May 2011 Amendment”). In conjunction with the issuance of the Original Platinum Notes, the Company determined that i) the cash payment option or put option, which provided the lender with the right to require the Company to repay part of the debt at a 25% premium, and ii) the note term extension option, which provided the lender with the right to extend the maturity date by one year, were embedded derivatives that should be bifurcated and accounted for separately as liabilities. In conjunction with the issuance of the Original Platinum Notes, the Company also issued warrants to purchase 560,000 shares of its common stock. These warrants included certain exercise price adjustment features and, as a result, the Company determined that the warrants were liabilities, which were recorded at their estimated fair value. The Company determined the fair value of the i) put option and note term extension option using an internal valuation model with Level 3 inputs and ii) the warrant liability using a lattice model with Level 3 inputs. Inputs used to determine fair value include estimated value of the underlying common stock at the valuation measurement date, the remaining contractual term of the notes, risk-free interest rates, expected volatility of the price of the underlying common stock, and the probability of a qualified financing. Changes in the fair value of these liabilities prior to the May 2011 Amendment were recognized as a non-cash charge or income in other income (expense) in the consolidated statements of operations.

As a result of the May 2011 Amendment, the Original Platinum Notes were amended and restated on May 5, 2011, eliminating the cash payment option. Further, concurrent with the Merger transaction described in Note 1 above, the warrants were determined not to be liabilities, since the exercise price adjustment feature ended upon the Company becoming a public company as a result of the Merger. The increase in fair value of the warrant liability of $7,000 and the increase in the put option and note term extension option liabilities of $71,000 were recognized in other expense, net in the statement of operations for the quarter ended June 30, 2011. The remaining put option and note term extension option liabilities, in the amount of $161,700, were reclassified to note discount in connection with the May 2011 Amendment. The aggregated fair value of the warrants at May 11, 2011, $424,100, was reclassified from a liability to additional paid-in capital, a component of stockholders’ deficit.

In December 2011, the Company and Platinum entered into a Note and Warrant Exchange Agreement pursuant to which the Platinum Note and warrants issued to Platinum were cancelled in exchange for shares of the Company’s Series A preferred stock.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Prepaid Expenses

3 Months Ended

Jun. 30, 2012

NOTE 5 - Prepaid Expenses

Prepaid expenses consist of the following:

	June 30,	March 31,
	2012	2012

Investor relations and awareness services paid
by issuance of common stock or warrants	$ 399,400	$ 19,700
Insurance	93,200	19,000
Legal fees	9,900	6,100
Investment banker fees	5,000	-
All other	3,700	6,100

	$ 511,200	$ 50,900

Accrued Expenses

3 Months Ended

Jun. 30, 2012

NOTE 6 - Accrued Expenses

Accrued expenses consist of the following:

	June 30,		March 31,
	2012		2012

Accrued professional services	$	109,500	$	107,400
Accrued research and development expenses		150,400		237,500
Accrued vacation pay and other compensation		247,500		229,900
Accrued placement agent fees		50,000		50,000
Accrued registration rights payments		5,500		—
All other		67,300		32,500

	$	630,200	$	657,300

Convertible Promissory Notes and Other Notes Payable

3 Months Ended

Jun. 30, 2012

NOTE 7 - Convertible Promissory Notes and Other Notes Payable

The following table summarizes the activity for the Company’s unsecured convertible promissory notes and other notes payable for the three months ended June 30, 2012:

	Principal										Foreign Currency			Principal			Accrued
	Balance										Adjustments/Other			Balance			Interest
	3/31/2012			Additions		Payments			Amortization		Reclassifications			6/30/2012			6/30/2012

Convertible Promissory Notes:
February 2012 12% convertible promissory notes	$	500,000		$	—	$	—		$	—	$	—		$	500,000		$	20,200
Note discount		(499,300	)		—		—			9,800		—			(489,500	)
12% convertible notes, net	$	700		$	—	$	—		$	9,800	$	—		$	10,500

Notes Payable:
To Related parties:
7 % Note payable to Cato Holding Co.		293,300													293,300		$	12,000
Note discount		(24,300	)		—		—			3,200		—			(21,100	)
Total notes payable to related parties	$	269,000		$	—	$	—		$	3,200	$	—		$	272,200
less: current portion		(168,200	)		—		—			—		(34,500	)		(202,700	)
non-current portion and discount	$	100,800		$	—	$	—		$	3,200	$	(34,500	)	$	69,500

Accrued officer’s compensation
Non-interest bearing notes payable to
Officer for deferred salary	$	57,000		$	—	$	—		$	—	$	—		$	57,000		$	—

To Unrelated parties
7.0% Notes payable - all current	$	63,800		$	—	$	—		$	—	$	—		$	63,800		$	1,500

7.5% Notes payable to vendors for
accounts payable converted to notes
payable:
Burr, Pilger, Mayer	$	93,400		$	—	$	(1,600	)	$	—	$	—		$	91,800		$	500
Desjardins		224,300			—		—			—		(18,400	)		205,900			6,800
McCarthy Tetrault		459,400			—		—			—		(35,500	)		423,900			13,100
Morrison Foerster		2,420,100			—		—			—		—			2,420,100			83,200
note discount		(228,900	)		—		—			17,700		—			(211,200	)		—
		2,968,300			—		(1,600	)		17,700		(53,900	)		2,930,500		$	103,600
less: current portion		(367,700	)		—		1,600			—		(206,300	)		(572,400	)
non-current portion and discount	$	2,600,600		$	—	$	—		$	17,700	$	(260,200	)	$	2,358,100

5.8% and 8% Notes payable to
insurance premium financing company	$	4,600		$	77,200	$	(16,800	)	$	—	$	—		$	65,000		$	—

10% Notes payable to vendors for
accounts payable converted to notes
payable	$	165,400		$	—	$	(3,100	)	$	—	$	—		$	162,300		$	19,200
less: current portion		(146,000	)		—		3,100			—		(2,500	)		(145,400	)
non-current portion	$	19,400		$	—	$	—		$	—	$	(2,500	)	$	16,900

February 2012 12% Convertible Notes

On February 28, 2012, the Company completed a private placement of convertible promissory notes to certain accredited investors in the aggregate principal amount of $500,000 (the "Notes"). Each Note accrues interest at the rate of 12% per annum and matures on the earlier of (i) twenty-four months from the date of issuance, or (ii) the consummation of an equity, equity-based, or series of equity-based financings resulting in gross proceeds to the Company of at least $4.0 million (the “Qualified Financing Threshold”). The holder of each Note may voluntarily convert the outstanding principal amount of the Notes and all accrued and unpaid interest (the “Outstanding Balance”) at any time prior to maturity into that number of shares of the Company’s common stock equal to the Outstanding Balance, divided by $3.00 (the "Conversion Shares"). In addition, in the event the Company consummates a financing equal to or exceeding the Qualified Financing Threshold, and the price per unit of the securities sold, or price per share of common stock issuable in connection with such financing, is at least $2.00 (a “Qualified Financing”), the Outstanding Balance will automatically convert into such securities, including warrants, that are issued in the Qualified Financing, the amount of which shall be determined according to the following formula: (Outstanding Balance at the closing date of the Qualified Financing) x (1.25) / (the per security price of the securities sold in the Qualified Financing). The purchaser of each Note was issued a warrant to purchase, for $2.75 per share, the number of shares of the Company’s common stock equal to 150% of the total principal amount of the Notes purchased by such purchaser, divided by $2.75, resulting in the potential issuance of an aggregate of 272,724 shares of the Company’s common stock upon exercise of the warrants (the “Warrant Shares”).

The Company entered into a Registration Rights Agreement with the purchasers of the February 2012 Notes pursuant to which the Company agreed to register for resale the Conversion Shares and the Warrant Shares. The Company agreed to file a registration statement no later than ninety days from the February 28, 2012 closing date, or by May 28, 2012 (the “Filing Deadline”). If the Company does not file the registration statement by the Filing Deadline or if the registration statement is not declared effective by the agreed upon effectiveness deadline, the Company is required to make aggregate payments to the purchasers in an amount equal to 1% of the $500,000 aggregate face amount of the February 2012 Notes for each 30-day period following the Filing Deadline, or pro-rata portion thereof, with an aggregate limitation of $50,000. At June 30, 2012, for strategic purposes, the Company had not filed the registration statement and had recorded $5,500 as a liability under the Registration Rights Agreement. Such amount is included in Accrued expenses in the Condensed Consolidated Balance Sheet at June 30, 2012. (See Note 6, Accrued Expenses.)

August 2010 Short-Term Note Converted to 7% Note Payable

In August 2010, the Company issued short-term, non-interest bearing, unsecured promissory notes (the “August 2010 Short-Term Notes”) having an aggregate principal amount, as adjusted, of $1,120,000. In May 2011, a total of $840,000 of the aggregate principal amount of the August 2010 Short-Term Notes were converted into Units consisting of shares of the Company’s common stock and three-year warrants to purchase shares of the Company’s common stock at an exercise price of $2.50 per share. Of the remaining balance of the August 2010 Short Term Notes; $105,000 of such amount was converted into a long-term note issued to Cato Holding Company, doing business as Cato BioVentures; and $175,000 of such amount was amended into a note bearing interest at 7% per annum, as described below.

In April 2011, the Company and the holder of the $175,000 August 2010 Short-Term Note amended the note, whereby the Company paid $50,000 of the note balance in May 2011 and was to make four monthly payments of $5,000 between May 2011 and August 2011, an additional nine monthly payments of $11,125 per month for the period from September 1, 2011 through May 1, 2012, plus a final payment on May 2, 2012 equal to any remaining balance. In September 2011, the Company and the holder agreed to modify the payment schedule to require payments of $5,000 per month through November 1, 2011, six monthly payments of $11,125 for the period from December 1, 2011 through May 1, 2012, an additional payment of $11,125 on May 2, 2012, plus a final payment on June 30, 2012 equal to any remaining balance. For strategic purposes, the Company did not make the February 2012 and March 2012 payments as scheduled. In March 2012, the Company and the note holder again agreed to modify the payment schedule to require seven monthly payments of $9,171 beginning June 1, 2012 with the final payment due on December 1, 2012 to include interest accrued after March 2012. The Company made the payment due on June 1, 2012 in early July 2012.

Issuance of Long-Term Promissory Note to Cato Holding Company

In April 2011, all amounts owed by the Company to Cato Holding Company ("CHC") or its affiliates, which included the $105,000 balance of the August 2010 Short-Term Note issued to Cato BioVentures discussed above, were consolidated into a single note, in the principal amount of $352,273. Concurrently, CHC released certain security interests in the Company’s personal property. The CHC note bears interest at 7% per annum, compounded monthly. Under the terms of the note, the Company was to make six monthly payments of $10,000 each beginning June 1, 2011; and thereafter to make payments of $12,500 monthly until the note is repaid in full. The Company may prepay the outstanding balance under this note in full or in part at any time during the term of this note without penalty. For strategic purposes, at June 30, 2012, the Company had not made the monthly payments due subsequent to December 2011.

Issuance of Long-Term Notes and Cancellation of Amounts Payable

On February 25, 2011, the Company issued to Burr, Pilger, and Mayer, LLC (“BPM”) an unsecured promissory note in the principal amount of $98,674 for amounts payable in connection with valuation services provided to the Company by BPM. The BPM note bears interest at the rate of 7.5% per annum and has payment terms of $1,000 per month, beginning March 1, 2011 and continuing until all principal and interest are paid in full. In addition, a payment of $25,000 shall be due upon the sale of the Company or upon the Company completing a financing transaction of at least $5.0 million, with the payment increasing to $50,000 (or the amount then owed under the note, if less) upon the Company completing a financing of over $10.0 million.

On April 29, 2011, the Company issued to Desjardins Securities, Inc. (“Desjardins”) an unsecured promissory note in the principal amount of CDN $236,000 for amounts payable for legal fees incurred by Desjardins in connection with investment banking services provided to the Company by Desjardins. The Desjardins note bears interest at 7.5% and will be due, along with all accrued but unpaid interest on the earliest of (i) June 30, 2014, (ii) the consummation of a Change of Control, as defined in the Desjardins note, and (iii) any failure to pay principal or interest when due. The Company is to make payments of CDN $4,000 per month beginning May 31, 2011, increasing to CDN $6,000 per month on January 31, 2012. In addition, if, prior to June 30, 2012, the Company closes an equity financing or series of equity financings with aggregate proceeds of $5.0 million or more, then the Company shall make a payment of $39,600 to Desjardins within 10 business days of the closing of such transaction(s). Beginning on January 1, 2012, the Company shall also make payments equal to one-half percent (0.5%) of the net proceeds of all private or public equity financings closed during the term of the note. For strategic purposes, at June 30, 2012, the Company had not made the monthly payments required for February through June 2012.

On May 5, 2011, the Company issued to McCarthy Tetrault LLP (“McCarthy”) an unsecured promissory note in the principal amount of CDN $502,797 for the amounts payable in connection with legal services provided to the Company. The McCarthy note bears interest at 7.5% and will be due, along with all accrued but unpaid interest on the earliest of (i) June 30, 2014, (ii) the consummation of a Change of Control, as defined in the McCarthy note, and (iii) any failure to pay principal or interest when due. The Company is to make payments of CDN $10,000 per month beginning May 31, 2011, increasing to CDN $15,000 per month on January 31, 2012. In addition, if, prior to June 30, 2012, the Company had closed an equity financing or series of equity financings with aggregate proceeds of $5.0 million or more, then the Company would have been required to make a payment of $100,000 to McCarthy within 10 business days of the closing of such transaction(s). Beginning on January 1, 2012, the Company is also required to make payments equal to one percent (1%) of the net proceeds of all private or public equity financings closed during the term of the note. For strategic purposes, at June 30, 2012, the Company had not made the monthly payments required for February through June 2012.

On May 5, 2011, the Company and Morrison & Foerster LLP (“Morrison & Foerster”), the Company’s legal and intellectual property counsel, amended a previously outstanding note issued by the Company in payment of legal services (“Amendment No. 1”). Under Amendment No. 1, the principal balance of the Morrison & Foerster note was increased to $2,200,000, with an additional payment of $100,000 due within three business days of the date of Amendment No. 1, which amount was paid. The Morrison & Foerster note bears interest at 7.5% and principal will be due, along with all accrued but unpaid interest on the earliest of (i) March 31, 2016, (ii) the consummation of a Change of Control, as defined in the Morrison & Foerster note, and (iii) any failure to pay principal or interest when due. The Company is to make payments of $10,000 per month until June 1, 2011 and thereafter will pay $15,000 per month through March 31, 2012, $25,000 per month through March 31, 2013, and $50,000 per month through maturity. In addition, the Company will make payments equal to five percent (5%) of the net proceeds of any equity financing closed during the term of the note until all outstanding principal and interest is paid in full. If the Company prepays the entire amount due by December 31, 2012, however, the amount of such payment shall be reduced by ten percent (10%), up to a maximum of $100,000. At June 30, 2012, the Company had not made the monthly payments required for February through June 2012.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

Licensing and Collaborative Agreements

3 Months Ended

Jun. 30, 2012

NOTE 8 - Licensing and Collaborative Agreements

University Health Network

On September 17, 2007, the Company and University Health Network ("UHN") entered a Sponsored Research Collaboration Agreement (“SRCA”) to develop certain stem cell technologies for drug discovery and drug rescue technologies. The SRCA was amended on April 19, 2010 to extend the term to five years and give the Company various options to extend the term for an additional three years. On December 15, 2010, the Company and UHN entered into a second amendment to expand the scope of work to include induced pluripotent stem cell technology and to further expand the scope of research and term extension options. On April 25, 2011, the Company and UHN amended the SRCA a third time to expand the scope to include therapeutic and stem cell therapy applications of induced pluripotent cells and to extend the date during which the Company may elect to fund additional projects to April 30, 2012. On October 24, 2011, the Company and UHN amended the SRCA a fourth time to identify five key programs that will further support the Company’s core drug rescue initiatives and potential cell therapy applications. Under the terms of the fourth amendment, the Company is committed to make monthly payments of $50,000 per month from October 2011 through September 2012 to fund these programs.

Concurrent with the execution of the fourth amendment to the SRCA, the Company and UHN entered into a License Agreement under the terms of which UHN granted the Company exclusive rights to the use of a novel molecule that can be employed in the identification and isolation of mature and immature human cardiomyocytes from pluripotent stem cells, as well as methods for the production of cardiomyocytes from pluripotent stem cells that express this marker. In consideration for the grant of the license, the Company has agreed to make payments to UHN totaling $3.9 million, if, and when, it achieves certain milestones set forth in the License Agreement, and to pay UHN royalties based on the receipt of revenue by the Company attributable to the licensed patents.

U.S. National Institutes of Health

During fiscal years 2006 through 2008, the U.S. National Institutes of Health ("NIH") awarded the Company a $4.3 million grant to support preclinical development of AV-101, the Company’s lead drug candidate for treatment of neuropathic pain and other neurodegenerative diseases such as Huntington’s and Parkinson’s diseases. In April 2009, the NIH awarded the Company a $4.2 million grant to support the Phase I clinical development of AV-101, which amount was subsequently increased to a total of $4.6 million in July 2010. The Company recognized NIH grant revenue related to AV-101 in the amounts of $187,200 and $474,100 in the three month periods ended June 30, 2012 and 2011, respectively. The grant expired in the ordinary course on June 30, 2012.

Cato Research Ltd.

The Company has built a strategic development relationship with Cato Research Ltd. ("CRL"), a global contract research and development organization, or CRO. CRL has provided the Company with access to essential CRO services supporting its AV-101 preclinical and clinical development programs and other projects. The Company recorded research and development expenses for CRO services provided by CRL in the amounts of $222,600 and $221,100 in the three month periods ended June 30, 2012 and 2011, respectively.

Capital Stock

3 Months Ended

Jun. 30, 2012

NOTE 9 - Capital Stock

Warrants and Stock Grants

In April 2012, the Company entered into a contract for investor relations services pursuant to which it granted three-year warrants to purchase 50,000 shares of the Company’s common stock at an exercise price of $2.80 per share. The Company valued the warrant at $69,200 using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $2.74; exercise price per share: $2.80; risk-free interest rate: 0.50%; contractual term: 3 years; volatility: 79.09%; expected dividend rate: 0%. The fair value of the warrant was recorded as a prepaid expense and is being expensed over one year in accordance with the terms of the contract.

In June 2012, the Company entered into a contract for investor relations and public company services through the end of the calendar year pursuant to which it granted 280,000 shares of its common stock valued at $238,000 based on the grant date quoted market price of $0.85 per share and warrants to purchase 100,000 shares of its common stock at an exercise price of $3.00 per share through December 31, 2015. The Company valued the warrant at $25,800 using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.85; exercise price per share: $3.00; risk-free interest rate: 0.46%; contractual term: 3.53 years; volatility: 84.279%; expected dividend rate: 0%. The fair value of the stock and the warrant was recorded as a prepaid expense and is being expensed over the approximately six month term of the contract.

In June 2012, the Company entered into a contract for additional investor relations services pursuant to which it granted 120,000 shares of its common stock valued at $102,000 based on the grant date quoted market price of $0.85 per share. The fair value of the stock was recorded as a prepaid expense and is being expensed over the approximately six month term of the contract.

Warrant Modifications

Between mid-May and June 30, 2012, the Company offered certain warrant holders the opportunity to exercise their warrants to purchase shares of the Company’s common stock at reduced exercise prices. Warrant holders exercised warrants to purchase an aggregate of 514,554 shares of the Company’s common stock and the Company received cash proceeds of $257,300. In addition, certain warrant holders exercised warrants to purchase 25,000 shares of the Company’s common stock in lieu of payment by the Company in satisfaction of amounts due for services in the aggregate amount of $12,500. For every three discounted warrant shares exercised by the warrant holders, the Company granted a three-year warrant to purchase one share of its common stock at an exercise price of $3.00 per share.

The Company calculated the fair value of the warrants exercised immediately before and after the May 18, 2012 Board of Directors approval of the modification offer and determined that the increase in the fair value of the warrants exercised was $436,400, which is reflected in general and administrative expense for the quarter ended June 30, 2012 in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. The warrants subject to the exercise price modifications were valued at the inception of the discount offer period using the Black-Scholes Option Pricing Model and using the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share	$	1.96		$	1.96
Exercise price per share (weighted average)		$2.76		$	0.50
Risk-free interest rate		0.16% - 0.41%			0.06	%
Expected term (years)		0.62 – 2.85			0.12
Volatility		74.5% - 85.7%			85.7	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	0.65		$	1.46

The market price per share is based on the quoted market price of the Company’s common stock on the Over-the-Counter Bulletin Board on the date of the modification. Because of its short history as a public company, the Company has estimated volatility based on the historical volatilities of a peer group of public companies over the expected term of the option. The risk-free rate of interest is based on the quoted constant maturity rate for U.S Treasury Bills on the date of the modification for the term corresponding with the expected term of the warrant. The expected dividend rate is zero as the Company has not paid and does not expect to pay dividends in the near future.

In connection with the foregoing exercises, the Company issued three-year warrants to purchase 179,857 shares of the Company’s common stock at an exercise price of $3.00 per share. The Company valued these warrants at $34,800 using the Black Scholes Option Pricing Model and the following assumptions: weighted average market price per share: $0.89; exercise price per share: $3.00; risk-free interest rate: 0.42%; contractual term: 3.0 years; volatility: 78.04%; expected dividend rate: 0%. The fair value of the warrants was charged to interest expense in the quarter ended June 30, 2012.

Following the warrant exercises and grants described above, at June 30, 2012, the Company had outstanding warrants to purchase shares of its common stock at a weighted average exercise price of $2.24 per share as follows:

	Exercise	Expiration	June 30,
	Price	Date	2012

$	0.88	5/17/2012 to 5/11/2014	15,428
$	1.125	12/28/2012	97,679
$	1.25	5/11/2014 to 12/31/2014	120,280
$	1.50	12/31/2012	325,000
$	1.75	12/31/2013	577,784
$	2.00	8/3/2013 to 12/31/2014	609,000
$	2.50	5/11/2014	493,650
$	2.625	12/31/2013	482,990
$	2.75	2/28/2017	272,724
$	3.00	1/4/2015 to 2/13/2016	609,857

			3,604,392

2012 Exchange Agreement with Platinum

On June 29, 2012, the Company and Platinum Long Term Growth Fund VII, LLC (“Platinum”) entered into an Exchange Agreement (the “2012 Exchange Agreement”) pursuant to which the Company has agreed to issue Platinum 62,945 shares of its Series A Preferred stock in exchange for 629,450 shares of common stock owned by Platinum, in consideration for Platinum’s agreement to purchase from the Company a secured 10% convertible promissory note in the principal amount of $500,000 (the “July 2012 Platinum Note”). The July 2012 Platinum Note was issued on July 2, 2012, and accordingly, the Company has not reflected either the issuance of the July 2012 Platinum Note or the exchange for the Series A Preferred Stock in its Condensed Consolidated Financial Statements at June 30, 2012. Under the terms of the 2012 Exchange Agreement and the July 2012 Platinum Note, in the event the Company consummates an equity or equity-based financing, or series of financing transactions resulting in gross proceeds to the Company of at least $3.0 million (“Qualified Financing”), the principal and accrued interest due under the terms of the July 2012 Platinum Note shall automatically convert into such securities issued in connection with the Qualified Financing. Repayment of all amounts due under the July 2012 Platinum Note is secured by the Company’s assets, including its tangible and intangible personal property, licenses, patent licenses, trademarks and trademark licenses, pursuant to the terms of a Security Agreement. In connection with the 2012 Exchange Agreement, Platinum has also agreed to invest at least $500,000 in the Qualified Financing, provided that the Company secures binding commitments from other investors in the Qualified Financing aggregating at least $3.0 million within 90 days following the date of the 2012 Exchange Agreement. In addition, Platinum, at its option, may exchange all or a portion of its Series A Preferred stock for the securities issued in connection with the Qualified Financing based on the stated value of $15.00 per share of Series A Preferred. Upon issuance of the Series A Preferred stock to be issued pursuant to the 2012 Exchange Agreement, Platinum will own all 500,000 authorized and outstanding shares of the Company’s Series A Preferred stock, each share of which is convertible into ten shares of the Company’s common stock.

Related Party Transactions

3 Months Ended

Jun. 30, 2012

NOTE 10 - Related Party Transactions

Cato Holding Company, doing business as Cato BioVentures ("CBV"), the parent of CRL, is one of the Company’s largest institutional stockholders. Pursuant to a loan agreement dated as of February 3, 2004 between CBV and VistaGen, as amended, CBV extended to VistaGen a $400,000 revolving line of credit. As of April 29, 2011, the outstanding balance under the line of credit agreement was $242,273. On April 29, 2011, the line of credit agreement was terminated and VistaGen issued to CBV an unsecured promissory note in the principal amount of $352,273 (the “2011 Cato Note”), which principal amount included the $242,273 outstanding balance on the line of credit as of April 29, 2011, and $105,000 of indebtedness owed to CBV under an August 2010 Short-Term Note. The 2011 Cato Note bears interest at the rate of 7.0% per annum, is payable in installments as follows: ten thousand dollars ($10,000) each month, beginning June 1, 2011 and ending on November 1, 2011; twelve thousand five hundred dollars ($12,500) each month, beginning December 1, 2011, and each month thereafter until the balance is paid in full, with the final monthly payment to be made in the amount equal to the then current outstanding balance of principal and interest due under the 2011 Cato Note. Total interest expense on the 2011 Cato Note and the prior line of credit in 2011 was $5,100 and $67,300 in the three month periods ended June 30, 2012 and 2011, respectively.

During fiscal year 2007, the Company entered into a contract research organization arrangement with CRL related to the development of its lead drug candidate, AV-101, and subsequent other projects under which the Company incurred expenses of $222,600 and $221,000 in the three month periods ended June 30, 2012 and 2011, respectively, the majority of which was reimbursed under the NIH grant in 2011.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Subsequent Events

3 Months Ended

Jun. 30, 2012

NOTE 11 - Subsequent Events

As described in Note 9, Capital Stock, in connection with the 2012 Exchange Agreement, on July 2, 2012, the Company issued the July 2012 Platinum Note in the face amount of $500,000 to Platinum. Also effective on that date, the Company issued 62,945 shares of its Series A Preferred stock to Platinum in exchange for 629,450 shares of common stock previously owned by Platinum.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2012

Summary Of Significant Accounting Policies Policies

Use of Estimates

Revenue Recognition

•

Research and Development Expenses

Stock-Based Compensation

The Company recorded share-based compensation costs of $71,000 and $439,700 for the three month periods ended June 30, 2012 and 2011, respectively. During the three months ended June 30, 2012, the Company granted options to purchase an aggregate of 155,000 shares of its common stock at an exercise price of $0.51 per share (the quoted market price on the grant date) to employees (excluding senior management) and certain scientific consultants. During the three months ended June 30, 2011, the Company granted options to purchase an aggregate of 800,000 shares of its common stock at an exercise price of $1.75 per share to certain of its employees and scientific consultants. At June 30, 2012, there were options outstanding to purchase 4,920,771 shares of the Company’s common stock at a weighted average exercise price of $1.51 per share.

Comprehensive Loss

The Company has no components of other comprehensive loss other than net loss, and accordingly the Company’s comprehensive loss is equivalent to net loss for the periods presented.

Loss per Common Share

Potentially dilutive securities excluded from diluted net loss per common share are as follows:

	June 30,
	2012	2011

All series of preferred stock issued and outstanding	4,370,550	-
Outstanding options under the 2008 and 1999 Stock Incentive Plan and 1998 Scientific Advisory Board Plan	4,920,771	4,719,153
Outstanding warrants to purchase common stock	3,604,392	6,540,314
February 2012 12% convertible promissory notes and accrued interest ⁽¹⁾	347,897	-

Total	13,243,610	11,259,467
____________
(1) assumes mandatory conversion in connection with a qualified financing at $2.00 per share, plus fee warrants to placement agent

Recent Accounting Pronouncements

Fair Value Measurements

•

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process.

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

Summary Of Significant Accounting Policies Tables

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Jun. 30, 2012

Earning Per Share

Potentially dilutive securities excluded from diluted net loss per common share are as follows:

	June 30,
	2012	2011

All series of preferred stock issued and outstanding	4,370,550	-
Outstanding options under the 2008 and 1999 Stock Incentive Plan and 1998 Scientific Advisory Board Plan	4,920,771	4,719,153
Outstanding warrants to purchase common stock	3,604,392	6,540,314
February 2012 12% convertible promissory notes and accrued interest ⁽¹⁾	347,897	-

Total	13,243,610	11,259,467
____________
(1) assumes mandatory conversion in connection with a qualified financing at $2.00 per share, plus fee warrants to placement agent

Prepaid Expenses (Tables)

3 Months Ended

Jun. 30, 2012

Prepaid Expenses Tables

Prepaid Expenses

Prepaid expenses consist of the following:

	June 30,	March 31,
	2012	2012

Investor relations and awareness services paid
by issuance of common stock or warrants	$ 399,400	$ 19,700
Insurance	93,200	19,000
Legal fees	9,900	6,100
Investment banker fees	5,000	-
All other	3,700	6,100

	$ 511,200	$ 50,900

Accrued Expenses (Tables)

3 Months Ended

Jun. 30, 2012

Accrued Expenses Tables

Accrued Expenses

Accrued expenses consist of the following:

	June 30,		March 31,
	2012		2012

Accrued professional services	$	109,500	$	107,400
Accrued research and development expenses		150,400		237,500
Accrued vacation pay and other compensation		247,500		229,900
Accrued placement agent fees		50,000		50,000
Accrued registration rights payments		5,500		—
All other		67,300		32,500

	$	630,200	$	657,300

Convertible Promissory Notes and Other Notes Payable (Tables)

3 Months Ended

Jun. 30, 2012

Convertible Promissory Notes And Other Notes Payable Tables

Convertible Promissory Notes and Other Notes Payable

The following table summarizes the activity for the Company’s unsecured convertible promissory notes and other notes payable for the three months ended June 30, 2012:

	Principal										Foreign Currency			Principal			Accrued
	Balance										Adjustments/Other			Balance			Interest
	3/31/2012			Additions		Payments			Amortization		Reclassifications			6/30/2012			6/30/2012

Convertible Promissory Notes:
February 2012 12% convertible promissory notes	$	500,000		$	—	$	—		$	—	$	—		$	500,000		$	20,200
Note discount		(499,300	)		—		—			9,800		—			(489,500	)
12% convertible notes, net	$	700		$	—	$	—		$	9,800	$	—		$	10,500

Notes Payable:
To Related parties:
7 % Note payable to Cato Holding Co.		293,300													293,300		$	12,000
Note discount		(24,300	)		—		—			3,200		—			(21,100	)
Total notes payable to related parties	$	269,000		$	—	$	—		$	3,200	$	—		$	272,200
less: current portion		(168,200	)		—		—			—		(34,500	)		(202,700	)
non-current portion and discount	$	100,800		$	—	$	—		$	3,200	$	(34,500	)	$	69,500

Accrued officer’s compensation
Non-interest bearing notes payable to
Officer for deferred salary	$	57,000		$	—	$	—		$	—	$	—		$	57,000		$	—

To Unrelated parties
7.0% Notes payable - all current	$	63,800		$	—	$	—		$	—	$	—		$	63,800		$	1,500

7.5% Notes payable to vendors for
accounts payable converted to notes
payable:
Burr, Pilger, Mayer	$	93,400		$	—	$	(1,600	)	$	—	$	—		$	91,800		$	500
Desjardins		224,300			—		—			—		(18,400	)		205,900			6,800
McCarthy Tetrault		459,400			—		—			—		(35,500	)		423,900			13,100
Morrison Foerster		2,420,100			—		—			—		—			2,420,100			83,200
note discount		(228,900	)		—		—			17,700		—			(211,200	)		—
		2,968,300			—		(1,600	)		17,700		(53,900	)		2,930,500		$	103,600
less: current portion		(367,700	)		—		1,600			—		(206,300	)		(572,400	)
non-current portion and discount	$	2,600,600		$	—	$	—		$	17,700	$	(260,200	)	$	2,358,100

5.8% and 8% Notes payable to
insurance premium financing company	$	4,600		$	77,200	$	(16,800	)	$	—	$	—		$	65,000		$	—

10% Notes payable to vendors for
accounts payable converted to notes
payable	$	165,400		$	—	$	(3,100	)	$	—	$	—		$	162,300		$	19,200
less: current portion		(146,000	)		—		3,100			—		(2,500	)		(145,400	)
non-current portion	$	19,400		$	—	$	—		$	—	$	(2,500	)	$	16,900

Capital Stock (Tables)

3 Months Ended

Jun. 30, 2012

Capital Stock Tables

Black-Scholes Option Pricing Model

Assumption:	Pre-modification			Post-modification
Market price per share	$	1.96		$	1.96
Exercise price per share (weighted average)	$	2.76		$	0.50
Risk-free interest rate		0.16% - 0.41%			0.06	%
Expected term (years)		0.62 – 2.85			0.12
Volatility		74.5% - 85.7%			85.7	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	0.65		$	1.46

Warrant exercises and grants

	Exercise	Expiration	June 30,
	Price	Date	2012

$	0.88	5/17/2012 to 5/11/2014	15,428
$	1.125	12/28/2012	97,679
$	1.25	5/11/2014 to 12/31/2014	120,280
$	1.50	12/31/2012	325,000
$	1.75	12/31/2013	577,784
$	2.00	8/3/2013 to 12/31/2014	609,000
$	2.50	5/11/2014	493,650
$	2.625	12/31/2013	482,990
$	2.75	2/28/2017	272,724
$	3.00	1/4/2015 to 2/13/2016	609,857

			3,604,392

History and Organization (Details Textuals)	Jun. 30, 2012 USD ($) shares	Dec. 02, 2011 shares	Oct. 01, 2011 shares	Sep. 30, 2011 shares
History And Organization Details Textuals
Number of people affecting by injury or disease	1,800,000
Awarded by U.S. National Institutes \| $	$ 8,900,000
Outstanding shares	6,836,452
Shares issued to stockholders in connection with the Merger	6,836,452
Common Stock Authorized Prior to Amendment to Articles of Incorporation				400,000,000
Common Stock Authorized Following Amendment to Articles of Incorporation			200,000,000
Number of Shares of Preferred Stock Company is authorized to Issue			10,000,000
Series A Preferred Stock, par value $0.001		500,000
Series A Conversion Value		10

Basis of Presentation and Going Concern (Details Textuals) - USD ($)	3 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Mar. 31, 2011	May 25, 1998
Auction Market Preferred Securities, Stock Series [Line Items]
Accumulated Deficit during its development stage	$ (56,608,400)	$ (54,782,500)
Cash and cash equivalents	31,700	$ 81,000	$ 942,000	$ 139,300
Cash expenditures, Minimum	4,000,000
Cash expenditures, Maximum	$ 5,000,000
Preferred stock, issued	4,370,550
Percent of convertible promissory note in the principal amount	10.00%
Principal amount	$ 500,000
Gross proceeds	3,000,000
Invest in the Qualified Financing	500,000
MinimumMember
Auction Market Preferred Securities, Stock Series [Line Items]
Anticipated cash expenditures	4,000,000
MaximumMember
Auction Market Preferred Securities, Stock Series [Line Items]
Anticipated cash expenditures	$ 6,000,000

Summary of Significant Accounting Policies (Details) - shares

Jun. 30, 2012

Jun. 30, 2011

Loss per Common Share

All series of preferred stock issued and outstanding

4,370,550

Outstanding options under the 2008 and 1999 Stock Incentive Plan and 1998 Scientific Advisory Board Plan

4,920,771

4,719,153

Outstanding warrants to purchase common stock

3,604,392

6,540,314

February 2012 12% convertible promissory notes and accrued interest (1)

^[1]

347,897

Total

13,243,610

11,259,467

[1]	assumes mandatory conversion in connection with a qualified financing at $2.00 per share, plus fee warrants to placement agent

Summary of Significant Accounting Policies (Details Textuals) - USD ($)	3 Months Ended		169 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012
Summary Of Significant Accounting Policies Details Textuals
Share-based compensation costs	$ 71,000	$ 439,700	$ 4,425,300
Granted options to purchase common stock	155,000	800,000
Exercise price of granted options to purchase common stock	$ 0.51	$ 1.75
outstanding options	4,920,771		4,920,771
outstanding options, weighted average exercise price	$ 1.51		$ 1.51

Fair Value Measurements (Details Textuals) - USD ($)	3 Months Ended
Fair Value Measurements (Details Textuals) - USD ($)	Jun. 30, 2012	May 05, 2012
Fair Value Measurements Details Textuals
convertible promissory notes	$ 4,000,000
Original Principal balance of notes		$ 4,000,000
Repayment of debt convesion premium in Percentage	25.00%
Issued warrant to purchase common stock	560,000
Change in Fair value of the warrant liability	$ 7,000
increase in the put option and note term extension option liabilities	71,000
Remaining put option and note term extension option liabilities	161,700
Aggregated fair value of the warrants	$ 424,100

Prepaid Expenses (Details) - USD ($)	Jun. 30, 2012	Mar. 31, 2012
Prepaid Expenses
Investor relations and awareness services paid by issuance of common stock or warrants	$ 399,400	$ 19,700
Insurance	93,200	19,000
Legal fees	9,900	6,100
Investment banker fees	5,000
All other	3,700	6,100
Total	$ 511,200	$ 50,900

Carrying amount as of the balance sheet date of unamortized costs of insurance coverage, which will be charged against earnings ratably over the period in which contractually agreed upon coverage's will be in effect; such periods expire within one year or the normal operating cycle, if longer.

Accrued Expenses (Details) - USD ($)	Jun. 30, 2012	Mar. 31, 2012
Accrued Expenses
Accrued professional services	$ 109,500	$ 107,400
Accrued research and development expenses	150,400	237,500
Accrued vacation pay and other compensation	247,500	229,900
Accrued placement agent fees	50,000	50,000
Accrued registration rights payments	5,500
All other	67,300	32,500
Total	$ 630,200	$ 657,300

Carrying value as of the balance sheet date of obligations incurred through that date and payable for professional fees, such as for legal and accounting services received. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

Carrying value as of the balance sheet date of obligations incurred and payable for unused vacation time owed to employees based on the entity's vacation benefit given to its employees. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

Carrying value as of the balance sheet date of obligations incurred through that date and payable arising from transactions not otherwise specified in the taxonomy. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

Convertible Promissory Notes and Other Notes Payable (Details)	3 Months Ended
	Jun. 30, 2012 USD ($)
ConvertiblePromissoryNotes12PercentFebruary2012Member
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	$ 500,000
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	500,000
Accrued Interest	20,200
Notediscount12PercentConvertiblePromissoryNotesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(499,300)
Additions
Payments
Amortization	9,800
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	(489,500)
Net12PercentConvertiblePromissoryNotesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	700
Additions
Payments
Amortization	9,800
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	10,500
NotePayabletoCatoHoldingCo.7PercentRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	293,300
Ending Balance	293,300
Accrued Interest	12,000
NoteDiscount7percentRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(24,300)
Additions
Payments
Amortization	3,200
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	(21,100)
TotalNotesPayableto7PercentRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	269,000
Additions
Payments
Amortization	3,200
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	272,200
LessCurrentPortion7PercentRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(168,200)
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications	(34,500)
Ending Balance	(202,700)
NonCurrentPortionAndDiscount7PercentRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	100,800
Additions
Payments
Amortization	3,200
Foreign Currency Adjustments/Other Reclassifications	(34,500)
Ending Balance	69,500
AccruedOfficersCompensationNotesPayableToOfficersForDefferedSalaryRelatedPartiesMember \| RelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	57,000
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	57,000
Accrued Interest
NotesPayable7PercentAllCurrentUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	63,800
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	63,800
Accrued Interest	1,500
NotesPayable7Point5PercentToVendorsBurrAndPilgerAndMayerUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	93,400
Additions
Payments	(1,600)
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	91,800
Accrued Interest	500
NotesPayable7Point5PercentToVendorsDesjardinsUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	224,300
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications	(18,400)
Ending Balance	205,900
Accrued Interest	6,800
NotesPayable7Point5PercentToVendorsMcCarthyTetraultUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	459,400
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications	(35,500)
Ending Balance	423,900
Accrued Interest	13,100
NotesPayable7Point5PercentToVendorsMorrisonFoersterUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	2,420,100
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	2,420,100
Accrued Interest	83,200
NotesPayable7Point5PercentNoteDiscountUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(228,900)
Additions
Payments
Amortization	17,700
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	(211,200)
Accrued Interest
NotesPayable7Point5PercentTotalNotePayableUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	2,968,300
Additions
Payments	(1,600)
Amortization	17,700
Foreign Currency Adjustments/Other Reclassifications	(53,900)
Ending Balance	2,930,500
Accrued Interest	103,600
NotesPayable7Point5PercentLessCurrentPortionUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(367,700)
Additions
Payments	1,600
Amortization
Foreign Currency Adjustments/Other Reclassifications	(206,300)
Ending Balance	(572,400)
NotesPayable7Point5PercentNonCurrentPortionAndDiscountUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	2,600,600
Additions
Payments
Amortization	17,700
Foreign Currency Adjustments/Other Reclassifications	(260,200)
Ending Balance	2,358,100
NotesPayable5Point8PercentAnd8PercentToInsurancePremiumFinancingCompanyUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	4,600
Additions	77,200
Payments	(16,800)
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	65,000
Accrued Interest
NotesPayable10PercentToVendorsForaccountsPayableConvertedToNotesPayableUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	165,400
Additions
Payments	(3,100)
Amortization
Foreign Currency Adjustments/Other Reclassifications
Ending Balance	162,300
Accrued Interest	19,200
NotesPayable10PercentLessCurrentPortionUnrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	(146,000)
Additions
Payments	3,100
Amortization
Foreign Currency Adjustments/Other Reclassifications	(2,500)
Ending Balance	(145,400)
NotesPayable10PercentNonCurrentPortionUrelatedPartiesMember \| UnrelatedPartiesMember
Convertible Promissory Notes and Other Notes Payable
Beginning Balance	19,400
Additions
Payments
Amortization
Foreign Currency Adjustments/Other Reclassifications	(2,500)
Ending Balance	$ 16,900

Convertible Promissory Notes and Other Notes Payable (Details Textuals) - USD ($)	3 Months Ended
	Jun. 30, 2012	Aug. 31, 2012	Jul. 02, 2012	Feb. 28, 2012
Debt Instrument [Line Items]
Debt amount raised		$ 750,000	$ 500,000
February 2012 12% Convertible Notes Member
Debt Instrument [Line Items]
Debt amount raised				$ 500,000
Interest rate, Note				12.00%
Maturity, Note	earlier of (i) twenty-four months from the date of issuance, or (ii) the consummation of an equity, equity-based, or series of equity-based financings resulting in gross proceeds to the Company of at least $4.0 million
Conversion term, Note principal amount	number of shares of the Company’s common stock equal to the Outstanding Balance, divided by $3.00
Threshold for qualified financing, per share	$ 2.0
Conversion feature of note	The purchaser of each Note was issued a warrant to purchase, for $2.75 per share, the number of shares of the Company’s common stock equal to 150% of the total principal amount of the Notes purchased by such purchaser, divided by $2.75
Issuance of common stock upon exercise of the warrants	272,724
Registration Rights Agreement term	The Company agreed to file a registration statement no later than ninety days from the February 28, 2012 closing date, or by May 28, 2012 (the “Filing Deadline”). If the Company does not file the registration statement by the Filing Deadline or if the registration statement is not declared effective by the agreed upon effectiveness deadline, the Company is required to make aggregate payments to the purchasers in an amount equal to 1% of the $500,000 aggregate face amount of the February 2012 Notes for each 30-day period following the Filing Deadline, or pro-rata portion thereof, with an aggregate limitation of $50,000
Liability under the Registration Rights Agreement	$ 5,500

Convertible Promissory Notes and Other Notes Payable (Details Textuals 1) - USD ($)	1 Months Ended		4 Months Ended	6 Months Ended		7 Months Ended		8 Months Ended	9 Months Ended
	May 31, 2011	Apr. 30, 2011	Aug. 30, 2011	May 01, 2012	Dec. 01, 2011	Dec. 01, 2012	May 01, 2012	Jun. 30, 2012	May 01, 2012	Aug. 31, 2012	Jul. 02, 2012	Aug. 30, 2010
Debt Instrument [Line Items]
Debt amount raised										$ 750,000	$ 500,000
LegalEntityAxis
Debt Instrument [Line Items]
Principal amount converted to shares	$ 105,000	$ 352,273
Periodic payments					$ 10,000			$ 12,500
Frequency of payments					six monthly payments
August2010ShortTermNoteConvertedTo7PercentNotePayableMember
Debt Instrument [Line Items]
Debt amount raised												$ 1,120,000
Principal amount converted to shares	840,000	$ 175,000
Common stock at an exercise price												$ 2.5
Repayment of note	$ 50,000
Periodic payments			$ 5,000	$ 11,125		$ 9,171	$ 5,000		$ 11,125
Frequency of payments			four monthly payments	six monthly payments		seven monthly payments			nine monthly payments

Convertible Promissory Notes and Other Notes Payable (Details Textuals 2) - LegalEntityAxis - USD ($)	1 Months Ended		6 Months Ended	8 Months Ended
	May 31, 2011	Apr. 30, 2011	Dec. 01, 2011	Jun. 30, 2012
Debt Instrument [Line Items]
Principal amount converted to shares	$ 105,000	$ 352,273
Periodic payments			$ 10,000	$ 12,500
Frequency of payments			six monthly payments

Convertible Promissory Notes and Other Notes Payable (Details Textuals 3) - USD ($)	1 Months Ended		3 Months Ended	5 Months Ended	8 Months Ended	10 Months Ended	12 Months Ended	16 Months Ended
	Apr. 30, 2013	Jun. 01, 2011	Jun. 30, 2012	Jun. 30, 2012	Jan. 31, 2012	Mar. 31, 2012	Mar. 31, 2013	Jun. 30, 2012	Aug. 31, 2012	Jul. 02, 2012	May 05, 2011	Apr. 29, 2011	Feb. 25, 2011
Debt Instrument [Line Items]
Debt amount raised									$ 750,000	$ 500,000
BurrPilgerAndMayerLLCMember
Debt Instrument [Line Items]
Debt amount raised													$ 98,674
Interest rate													7.50%
Periodic payments								$ 1,000
Frequency of payments								Monthly
Payment due in case of sale								$ 25,000
Conditions for payment								upon the sale of the Company or upon the Company completing a financing transaction of at least $5.0 million, with the payment increasing to $50,000 (or the amount then owed under the note, if less) upon the Company completing a financing of over $10.0 million
DesjardinsSecuritiesIncMember
Debt Instrument [Line Items]
Debt amount raised												$ 236,000
Interest rate												7.50%
Periodic payments				$ 6,000	$ 4,000
Conditions for payment			if, prior to June 30, 2012, the Company closes an equity financing or series of equity financings with aggregate proceeds of $5.0 million or more, then the Company shall make a payment of $39,600 to Desjardins within 10 business days of the closing of such transaction(s). Beginning on January 1, 2012, the Company shall also make payments equal to one-half percent (0.5%) of the net proceeds of all private or public equity financings closed during the term of the note
Maturity, Note			earliest of (i) June 30, 2014, (ii) the consummation of a Change of Control, as defined in the Desjardins note, and (iii) any failure to pay principal or interest when due
McCarthyTetraultLLPMember
Debt Instrument [Line Items]
Debt amount raised											$ 502,797
Interest rate											7.50%
Periodic payments				$ 15,000	$ 10,000
Conditions for payment			if, prior to June 30, 2012, the Company had closed an equity financing or series of equity financings with aggregate proceeds of $5.0 million or more, then the Company would have been required to make a payment of $100,000 to McCarthy within 10 business days of the closing of such transaction(s). Beginning on January 1, 2012, the Company is also required to make payments equal to one percent (1%) of the net proceeds of all private or public equity financings closed during the term of the note
Maturity, Note			(i) June 30, 2014, (ii) the consummation of a Change of Control, as defined in the McCarthy note, and (iii) any failure to pay principal or interest when due
MorrisonAndFoersterLLPMember
Debt Instrument [Line Items]
Debt amount raised											$ 2,200,000
Interest rate											7.50%
Periodic payments	$ 50,000	$ 10,000				$ 15,000	$ 25,000
Conditions for payment			the Company will make payments equal to five percent (5%) of the net proceeds of any equity financing closed during the term of the note until all outstanding principal and interest is paid in full. If the Company prepays the entire amount due by December 31, 2012, however, the amount of such payment shall be reduced by ten percent (10%), up to a maximum of $100,000
Maturity, Note			earliest of (i) March 31, 2016, (ii) the consummation of a Change of Control, as defined in the Morrison & Foerster note, and (iii) any failure to pay principal or interest when due
Additional amount											$ 100,000

Capital Stock (Details)	3 Months Ended
Capital Stock (Details)	Jun. 30, 2012 $ / shares
PreModificationWarrantsMember
Assumption:
Market price per share	$ 1.96
Exercise price per share (weighted average)	2.76
Exercise price per share Upper	$ 6
Risk-free interest rate Minimum	0.16%
Risk-free interest rate Maximum	0.41%
Expected term (years) Minimum	7 months 13 days
Expected term (years) Maximum	2 years 10 months 6 days
Volatility Minimum	74.50%
Volatility Maximum	85.70%
Dividend rate	0.00%
Weighted Average Fair Value per share	$ 0.65
PostModificationWarrantsMember
Assumption:
Market price per share	1.96
Exercise price per share (weighted average)	.5
Exercise price per share Upper	$ 0.5
Risk-free interest rate Minimum	0.06%
Risk-free interest rate Maximum	0.06%
Expected term (years) Minimum	1 month 13 days
Expected term (years) Maximum	1 month 13 days
Volatility Minimum	85.70%
Volatility Maximum	85.70%
Dividend rate	0.00%
Weighted Average Fair Value per share	$ 1.46

Capital Stock (Details 1)	Jun. 30, 2012 $ / shares shares
Warrants option
Number of Warrants	4,920,771
ShareBasedCompensationWarrantsOneMember
Warrants option
Exercise Price \| $ / shares	$ 0.88
Expiration Date	5/17/2012 to 5/11/2014
Number of Warrants	15,428
ShareBasedCompensationWarrantsThreeMember
Warrants option
Exercise Price \| $ / shares	$ 1.125
Expiration Date	Dec. 28, 2012
Number of Warrants	97,679
ShareBasedCompensationWarrantsFourMember
Warrants option
Exercise Price \| $ / shares	$ 1.25
Expiration Date	5/11/2014 to 12/31/2014
Number of Warrants	120,280
ShareBasedCompensationWarrantsFiveMember
Warrants option
Exercise Price \| $ / shares	$ 1.5
Expiration Date	Dec. 31, 2012
Number of Warrants	325,000
ShareBasedCompensationWarrantsSixMember
Warrants option
Exercise Price \| $ / shares	$ 1.75
Expiration Date	Dec. 31, 2013
Number of Warrants	577,784
ShareBasedCompensationWarrantsSevenMember
Warrants option
Exercise Price \| $ / shares	$ 2
Expiration Date	8/3/2013 to 12/31/2014
Number of Warrants	609,000
ShareBasedCompensationWarrantsEightMember
Warrants option
Exercise Price \| $ / shares	$ 2.5
Expiration Date	May 11, 2014
Number of Warrants	493,650
ShareBasedCompensationWarrantsNineMember
Warrants option
Exercise Price \| $ / shares	$ 2.625
Expiration Date	Dec. 31, 2013
Number of Warrants	482,990
ShareBasedCompensationWarrantsTenMember
Warrants option
Exercise Price \| $ / shares	$ 2.75
Expiration Date	Feb. 28, 2017
Number of Warrants	272,724
ShareBasedCompensationWarrantsElevenMember
Warrants option
Exercise Price \| $ / shares	$ 3
Expiration Date	1/4/2015 to 2/13/2016
Number of Warrants	609,857

Licensing and Collaborative Agreements (Details Textuals) - USD ($)	3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jul. 31, 2010	Apr. 30, 2009
Licensing And Collaborative Agreements Details Textuals
Monthly payments	$ 50,000
Amount paid for UHN royalties	4
Award given to Support development	4			$ 4
Awarded amount increased to Support development			$ 5
Grant revenue	187,200	$ 474,100
research and development expenses	$ 222,600	$ 221,100

The costs incurred in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, excluding in-process research and development acquired in a business combination consummated during the period. Excludes software research and development, which has a separate concept.