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Description of Business

VistaGen Therapeutics, Inc., a Nevada corporation (“VistaGen” or the “Company”), is a biotechnology company with expertise in human pluripotent stem cell technology (“hPSC technology”). The Company is currently applying its hPSC technology for drug rescue, predictive toxicology and drug metabolism screening. The Company’s primary goal is to use its hPSC technology platform, which it also refers to as Human Clinical Trials in a Test Tube™, and the novel pharmaceutical assay systems developed using its hPSC technology expertise and network of strategic relationships, to generate novel, proprietary, safer variants (Drug Rescue Variants) of once-promising small molecule drug candidates originally discovered, developed and ultimately discontinued by large pharmaceutical or biotechnology companies prior to market approval due to unexpected safety concerns relating to heart toxicity, liver toxicity or adverse drug-drug interactions. The Company’s strategy is to leverage substantial prior third-party investment in drug discovery and drug development and to generate early indications, or predictions, of how humans will ultimately respond to new drug candidates, including Drug Rescue Variants, before they are ever tested in humans, bringing human biology to the front end of the drug development process..

VistaGen's orally-available, small molecule drug candidate, AV-101, has successfully completed Phase 1 development in the Unites States for treatment of neuropathic pain. Neuropathic pain, a serious and chronic condition causing pain after an injury or disease of the peripheral or central nervous system, affects millions of people worldwide. The NIH awarded VistaGen approximately $8.8 million for preclinical and clinical development of AV-101.

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

The Merger

VistaGen Therapeutics, Inc., a California corporation (“VistaGen California”) is a wholly-owned subsidiary of the Company. VistaGen California was incorporated in California on May 26, 1998. Excaliber Enterprises, Ltd. (“Excaliber”), a publicly-held company (formerly OTCBB: EXCA) was incorporated under the laws of the State of Nevada on October 6, 2005. After being unable to generate material revenues based on its original business plan, Excaliber became inactive in 2007. In May 2011, after assessing the prospects associated with its original business plan and the business opportunities associated with a strategic merger with an established, privately-held, biotechnology company seeking the potential advantages of being a publicly-held company, Excaliber’s Board of Directors agreed to pursue a strategic merger with VistaGen California, as described below.

On May 11, 2011, pursuant to a strategic merger transaction with VistaGen California, Excaliber acquired all outstanding shares of VistaGen California in exchange for 6,836,452 shares of Excaliber common stock (the “Merger”), and Excaliber assumed all of VistaGen California’s pre-Merger obligations to contingently issue shares of common stock in accordance with VistaGen California’s stock option agreements, warrant agreements, and a convertible promissory note. In connection with the Merger, Excaliber repurchased 5,064,207 shares of its common stock from two of its stockholders for a nominal amount, resulting in a total of 784,500 shares of Excaliber common stock outstanding at the date of the Merger. The 6,836,452 shares issued to VistaGen California stockholders in connection with the Merger represented approximately ninety percent (90%) of the outstanding shares of Excaliber’s common stock after the closing of the Merger. As a result of the Merger, the business of VistaGen California became the operating business of Excaliber.

Immediately preceding and concurrent with the Merger:

· VistaGen California sold 2,216,106 Units, consisting of one share of VistaGen California restricted common stock and a three-year warrant to purchase one-fourth (1/4) of one share of VistaGen California restricted common stock at an exercise price of $2.50 per share, at a price of $1.75 per Unit in a private placement for aggregate gross offering proceeds of $3,878,200, including $2,369,200 in cash (the “2011 Private Placement”). See Note 9, Capital Stock, for a further description;

· Holders of certain promissory notes issued by VistaGen California from 2006 through 2010 converted notes totaling $6,174,793, including principal and accrued but unpaid interest, into 3,528,290 Units at $1.75 per Unit. These Units were the same Units issued in connection with the 2011 Private Placement. See Note 8, Convertible Promissory Notes and Other Notes Payable; and

· All holders of VistaGen California's then-outstanding 2,884,655 shares of restricted preferred stock converted all of their preferred shares into 2,884,655 shares of VistaGen California restricted common stock. See Note 9, Capital Stock.

Shortly after the Merger:

· Each of VistaGen California’s pre-Merger directors was appointed as a director of Excaliber;

· The pre-Merger directors and officers of Excaliber resigned as officers and directors of Excaliber;

· Each of VistaGen California’s pre-Merger officers was appointed an officer of like tenor of Excalber;

· The post-Merger directors of Excaliber (consisting of the pre-Merger directors of VistaGen California) approved a two-for-one (2:1) forward stock split of Excaliber’s common stock;

· The post-Merger directors of Excaliber approved an increase in the number of shares of common stock Excaliber was authorized to issue from 200 million to 400 million shares (see Note 9, Capital Stock);

· Excaliber’s name was changed 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

· VistaGen adopted VistaGen California's fiscal year-end of March 31st.

VistaGen California, as the accounting acquirer in the Merger, recorded the Merger as the issuance of common stock for the net monetary assets of Excaliber, accompanied by a recapitalization. This accounting for the Merger 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 (2:1) stock split noted above, have been retroactively reflected as outstanding for all periods presented in the accompanying Consolidated Financial Statements of the Company. Additionally, the accompanying Consolidated Balance Sheets of the Company retroactively reflect the $0.001 par value of Excaliber’s common stock and the two-for one (2:1) stock split after the Merger.

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”). Pursuant to the Note Exchange and Purchase Agreement of October 11, 2012 (the “October 2012 Agreement”), as amended, between the Company and Platinum Long Term Growth VII, LLC (“Platinum”), currently the Company’s largest institutional security holder, Platinum has the right and option to exchange 500,000 shares of the Company’s Series A Preferred held by Platinum for (i) a total of 15,000,000 restricted shares of the Company’s common stock, and (ii) a five-year warrant to purchase 7,500,000 restricted shares of the Company’s common stock at an exercise price of $1.50 per share (see Note 9, Capital Stock).

The Consolidated Financial Statements of the Company in this Report represent the activity of VistaGen California from May 26, 1998, and the consolidated activity of VistaGen California and Excaliber (now VistaGen Therapeutics, Inc., a Nevada corporation) from May 11, 2011 (the date of the Merger). The Consolidated Financial Statements of the Company also include the accounts of VistaGen California’s two wholly-owned subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation (“Artemis”), and VistaStem Canada, Inc., an Ontario corporation (“VistaStem Canada”).

Basis of Presentation and Going Concern

12 Months Ended

Mar. 31, 2013

Basis of Presentation and Going Concern

The accompanying Consolidated Financial Statements of the Company have been prepared assuming the Company will continue as a going concern. As a development stage company without sustainable revenues, VistaGen has experienced recurring losses and negative cash flows from operations. From inception through March 31, 2013, VistaGen has a deficit accumulated during its development stage of $67.7 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 regenerative cell therapy business programs.

At March 31, 2013, the Company had approximately $638,100 in cash and cash equivalents. Such cash and cash equivalents are not sufficient to enable the Company to fund its operations, including expected cash expenditures of approximately $5 million, through the next twelve months. However, in April 2013, the Company entered into a securities purchase agreement, as amended, with an institutional investor involving the Company’s private issuance and sale of its restricted common stock in a transaction involving a series of closings scheduled to occur between June 27, 2013 and September 30, 2013, which financing transaction is expected to generate aggregate cash proceeds to the Company of $36.0 million (see Note 16, Subsequent Events, for a further description of this private placement). Additionally, the Company expects that its participation in strategic collaborations, including licensing transactions, may provide additional cash in support of its future working capital requirements.

Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2013

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“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 the assumptions used to value warrants, warrant modifications and put option, note term extension, and warrant liabilities.

Principles of Consolidation

The accompanying consolidated financial statements include the Company’s accounts, and the accounts of VistaGen California’s wholly-owned inactive subsidiaries, Artemis, and VistaStem Canada.

Change in Authorized Number of Shares

Effective with the Merger, the Company was authorized to issue up to 400,000,000 shares of common stock, $0.001 par value and no shares of preferred stock. On October 28, 2011, the Company held a special meeting of its stockholders at which the stockholders approved a proposal to amend the Company’s Articles of Incorporation to (1) reduce the number of authorized shares of the Company’s common stock from 400,000,000 shares to 200,000,000 shares; (2) authorize the Company to issue up to 10,000,000 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. See Note 9, Capital Stock.

Cash and Cash Equivalents

Cash and cash equivalents are considered to be highly liquid investments with maturities of three months or less at the date of purchase.

Property and Equipment

Property and equipment is stated at cost. Repairs and maintenance costs are expensed in the period incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from five to seven years.

Impairment or Disposal of Long-Lived Assets

The Company evaluates its long-lived assets, primarily property and equipment, for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use or eventual disposition. If the estimates of future undiscounted net cash flows are insufficient to recover the carrying value of the assets, the Company records an impairment loss in the amount by which the carrying value of the assets exceeds their fair value. If the assets are determined to be recoverable, but the useful lives are shorter than originally estimated, the Company depreciates or amortizes the net book value of the assets over the newly determined remaining useful lives. The Company has not recorded any impairment charges to date.

Revenue Recognition

The Company generates revenue principally from collaborative research and development arrangements, technology transfer agreements, including strategic licenses, 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 up front 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, development and/or regulatory milestone payments 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, and, in the case of development and/or regulatory milestone payments, when the applicable event triggering such a payment has occurred.

•

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 the Company’s internal scientific personnel and direct project costs. External research and development expenses consist of sponsored stem cell research and development costs, costs associated with non-clinical and clinical drug rescue and development activities, including development of AV-101, the Company’s drug development candidate which has successfully completed Phase 1 development, and costs related to protection of the Company’s intellectual property, including, but not limited to, application and prosecution of patents related to the Company’s stem cell technology platform, Human Clinical Trials in a Test Tube™, and AV-101. All such research and development costs are charged to expense as incurred.

Share-Based Compensation

The Company recognizes compensation cost for all share-based awards to employees in its financial statements based on their grant date fair value. Share-based compensation expense is recognized over the period during which the employee is required to perform service in exchange for the award, which generally represents the scheduled vesting period of options and warrants to purchase common stock of the Company. The Company has no awards with market or performance conditions. For share-based awards to non-employees, the Company re-measures the fair value of such awards as they vest and the resulting value is recognized as an expense during the period over which applicable services are performed by the recipient.

Income Taxes

The Company accounts for income taxes using the asset and liability approach for financial reporting purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce the deferred tax assets to an amount expected to be realized.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. The Company’s investment policies limit any such investments to short-term, low-risk investments. The Company deposits cash and cash equivalents with quality financial institutions and is insured to the maximum of federal limitations. Balances in these accounts may exceed federally insured limits at times.

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 its net loss for the periods presented.

Loss per Common Share

Basic loss per share of common stock excludes 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. A total of 1,569,000 shares of common stock, representing the 784,500 shares held by stockholders of Excaliber immediately prior to the Merger and effected for the post-Merger two-for-one (2:1) stock split described in Note 1, Description of Business, have been retroactively reflected as outstanding for the period prior to the Merger in the fiscal year ended March 31, 2012 for purposes of determining basic and diluted loss per common share in the accompanying Consolidated Statements of Operations.

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

	March 31,
	2013		2012

Series A preferred stock issued and outstanding (1)		15,000,000		4,370,550
Common stock warants issuable to Platinum upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement		7,500,000		-
Outstanding options under the 2008 and 1999 Stock Incentive Plans		4,912,604		4,805,771
Outstanding warrants to purchase common stock		14,660,335		4,126,589
10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including accrued interest through March 31, 2013 (2)		6,775,682		-

Total		48,848,621		13,302,910

(1) at March 31, 2013, assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum

(2) assumes conversion under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum and the terms of the individual notes

Recently Adopted Accounting Standards

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 beginning after December 15, 2011. The Company’s adoption of this ASU effective April 1, 2012 did not have any impact on its consolidated results of operations or financial position; however it required modification of the format of the former “Consolidated Statements of Operations” to include total comprehensive loss and changing the title of the statements to “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.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the fiscal year ended March 31, 2013 that are of significance, or of potential significance, to the Company.

Fair Value Measurements

12 Months Ended

Mar. 31, 2013

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 that 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. In conjunction with the issuance of the Senior Secured Convertible Promissory Notes and related Exchange Warrant and Investment Warrants to Platinum in October 2012, February 2013 and March 2013 (see Note 8, Convertible Promissory Notes and Other Notes Payable), and the potential issuance of the Series A Exchange Warrant (see Note 9, Capital Stock), all pursuant to the October 2012 Agreement, the Company determined that the warrants included certain exercise price adjustment features requiring the warrants to be treated as liabilities, which were recorded at their estimated fair value. The Company determined the fair value of the warrant liability using a Monte Carlo simulation model with Level 3 inputs. Inputs used to determine fair value include the remaining contractual term of the warrants, risk-free interest rates, expected volatility of the price of the underlying common stock, and the probability of a financing transaction that would trigger a reset in the warrant exercise price, and, in the case of the Series A Exchange Warrant, the probability of Platinum’s exchange of the shares of Series A Preferred it holds into shares of common stock. Changes in the fair value of these warrant liabilities have been recognized as non-cash expense in other income (expense) in the Consolidated Statements of Operations and Comprehensive Loss for the year ended March 31, 2013.

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 “May 2011 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 Platinum with the right to require the Company to repay part of the debt in cash at a 25% premium, and (ii) the note term extension option, which provided Platinum 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 included 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 and Comprehensive Loss for the year ended March 31, 2012.

As a result of the May 2011 Amendment, Platinum’s cash payment or put option was eliminated. 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 terminated 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 first quarter of the fiscal year ended March 31, 2012. The remaining put option and note term extension option liabilities, in the amount of $161,800, were reclassified to note discount in connection with the May 2011 Amendment. The aggregate 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 May 2011 Platinum Note and the warrants issued to Platinum were cancelled in exchange for shares of the Company’s Series A Preferred stock.

The fair value hierarchy for liabilities measured at fair value on a recurring basis is as follows:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
	Total		Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2013:
Warrant liability	$	6,394,000	$	-	$	-	$	6,394,000
March 31, 2012:
Put option and note term extension option liabilities	$	-	$	-	$	-	$	-
Warrant liability	$	-	$	-	$	-	$	-

During the fiscal years ended March 31, 2013 and 2012, there were no significant changes to the valuation models used for purposes of determining the fair value of the Level 3 warrant liability or the put option and note term extension liabilities.

The changes in Level 3 liabilities measured at fair value on a recurring basis are as follows:

		Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
		Put Option and
		Note Term Extension			Warrant
		Liabilities			Liability			Total
Balance at March 31, 2011		$	90,800		$	417,100		$	507,900

Mark to market loss included in net loss			71,000			7,000			78,000
Reclassification of liability to note discount on Original Platinum Notes upon Merger			(161,800	)		-			(161,800	)
Reclassification of remaining warrant liability to equity upon Merger			-			(424,100	)		(424,100	)

Balance at March 31, 2012		$	-		$	-		$	-

Recognition of warrant liability upon issuance of Exchange and Investment Warrants
to Platinum under October 2012 Agreement			-			1,690,000			1,690,000
Recognition of warrant liability in connection with Series A Exchange Warrant
potentially issuable to Platinum under October 2012 Agreement			-			3,068,200			3,068,200
Mark to market loss included in net loss			-			1,635,800			1,635,800

Balance at March 31, 2013		$	-		$	6,394,000		$	6,394,000

No assets or other liabilities were measured on a recurring basis at fair value at March 31, 2013 or 2012.

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.

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
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
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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
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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
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
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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
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Property, Plant and Equipment [Abstract]

Property and Equipment

12 Months Ended

Mar. 31, 2013

Property and Equipment

Property and equipment consists of the following:

	March 31,
	2013			2012

Laboratory equipment	$	649,500		$	515,800
Computers and network equipment		12,900			12,900
Office furniture and equipment		69,600			75,600
		732,000			604,300

Accumulated depreciation and amortization		(551,300	)		(529,800	)

Property and equipment, net	$	180,700		$	74,500

In connection with the issuance of Senior Secured Convertible Promissory Notes to Platinum in July and August 2012 and with the October 2012 Agreement with Platinum, the Company entered into a Security Agreement with Platinum under which the repayment of all amounts due under the terms of the various notes issued to Platinum are secured by the Company’s assets, including its tangible and intangible personal property, licenses, patent licenses, trademarks and trademark licenses (see Note 8, Convertible Promissory Notes and Other Notes Payable). In February 2004, the Company granted a security interest covering its laboratory and computer equipment in conjunction with notes payable under a line of credit agreement. The security interest was released in April 2011 in connection with the consolidation of certain notes payable.

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

AV-101 Acquisition

12 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

AV-101 Acquisition

In November 2003, pursuant to an Agreement and Plan of Merger (the “Artemis Agreement”), the Company acquired Artemis, a private company also in the development stage, for the purpose of acquiring exclusive licenses to patents and other intellectual property related to the use and function of AV-101, a new drug candidate then in nonclinical development, with the potential to treat neuropathic pain, depression, and other neurological diseases and disorders, epilepsy, Huntington’s disease and Parkinson’s disease. Pursuant to the Artemis Agreement, each share of common stock of Artemis was converted into the right to receive 0.9045 shares of VistaGen California’s Series B-1 Preferred Stock, resulting in VistaGen California’s pre-Merger issuance of 1,356,750 shares of its Series B-1 Preferred Stock. The shares of Series B-1 Preferred Stock were valued, pre-Merger, at $5.545 per share, and accordingly the pre-Merger purchase price of all outstanding shares of Artemis in 2003 was $7,523,200. The total purchase price was allocated to AV-101 acquired in-process research and development and was expensed subsequent to the acquisition, since AV-101 required further research and development before the Company could commence clinical trials and did not have any proven alternative future uses.

The NIH awarded the Company an aggregate of $4.2 million to support nonclinical development of AV-101 during fiscal years 2006 through 2008, culminating in the submission in November 2008 of its Investigational New Drug ("IND") application to conduct Phase 1 human clinical testing of AV-101 for neuropathic pain. In April 2009, the NIH awarded the Company an aggregate of $4.2 million grant to support the Phase 1 clinical development of AV-101, and subsequently increased the grant to an aggregate of $4.6 million in July 2010. The Company completed the Phase 1a clinical trial of AV-101 during the third calendar quarter of 2011 and completed the Phase 1b clinical testing in the last half of calendar 2012. To date, VistaGen has received an aggregate of $8.8 million from the NIH for non-clinical and clinical development of AV-101.

Accrued Expenses

12 Months Ended

Mar. 31, 2013

Accrued Expenses

Accrued expenses consist of:

	March 31,		March 31,
	2013		2012

Accrued professional services	$	67,800	$	107,400
Accrued research and development expenses		-		237,500
Accrued vacation pay and other compensation		219,300		229,900
Accrued placement agent fees		-		50,000
Accrued royalties and license fees		25,000		5,000
All other		30,800		27,500

	$	342,900	$	657,300

Convertible Promissory Notes and Other Notes Payable

12 Months Ended

Mar. 31, 2013

Convertible Promissory Notes and Other Notes Payable

The following table summarizes the components of the Company’s convertible promissory notes and other notes payable:

	March 31, 2013									March 31, 2012
	Principal			Accrued						Principal			Accrued
	Balance			Interest			Total			Balance			Interest			Total
*Senior Secured 10% Convertible Promissory Notes*
*issued to Platinum:*
Exchange Note issued on October 11, 2012	$	1,272,600		$	61,700		$	1,334,300		$	-		$	-		$	-
Investment Note issued on October 11, 2012		500,000			24,200			524,200			-			-			-
Investment Note issued on October 19, 2012		500,000			23,000			523,000			-			-			-
Investment Note issued on February 22, 2013		250,000			2,600			252,600			-			-			-
Investment Note issued on March 12, 2013		750,000			4,700			754,700			-			-			-
		3,272,600			116,200			3,388,800			-			-			-
Aggregate note discount		(1,963,100	)		-			(1,963,100	)		-			-			-
Total Senior notes (non-current)	$	1,309,500		$	116,200		$	1,425,700		$	-		$	-		$	-

*Convertible Promissory Notes:*
February 2012 12% convertible promissory notes	$	-		$	-		$	-		$	500,000		$	5,300		$	505,300
Note discount		-			-			-			(499,300	)		-			(499,300	)
Total 12% convertible notes, net (non-current)	$	-		$	-		$	-		$	700		$	5,300		$	6,000

*Notes Payable to unrelated parties:*
7.0% Notes payable (April 2011)	$	-		$	-		$	-		$	63,800		$	400		$	64,200
7.0% Notes payable (August 2012)		59,400			-			59,400			-			-			-
		59,400		$	-		$	59,400			63,800		$	400		$	64,200
less: current portion		(8,100	)		-			(8,100	)		(63,800	)		(400	)		(64,200	)
7.0% Notes payable - non-current portion	$	51,300		$	-		$	51,300		$	-		$	-		$	-

7.5% Notes payable to service providers for
accounts payable converted to notes payable:
Burr, Pilger, Mayer	$	90,400		$	-		$	90,400		$	93,400		$	1,100		$	94,500
Desjardins		194,100			800			194,900			224,300			2,800			227,100
McCarthy Tetrault		403,100			1,700			404,800			459,400			5,700			465,100
May 2011 Morrison Foerster		-			-			-			2,420,100			37,900			2,458,000
August 2012 Morrison & Foerster Note A		937,400			-			937,400			-			-			-
August 2012 Morrison & Foerster Note B, payable solely in restricted shares of the Company's common stock (1)		1,379,400			60,100			1,439,500			-			-			-
University Health Network, payable solely in restricted shares of the Company's common stock (1)		549,500			19,400			568,900			-			-			-
		3,553,900			82,000			3,635,900			3,197,200			47,500			3,244,700
Note discount		(1,142,600	)		-			(1,142,600	)		(228,900	)		-			(228,900	)
		2,411,300			82,000			2,493,300			2,968,300			47,500			3,015,800
less: current portion		(450,300	)		(2,500	)		(452,800	)		(367,700	)		-			(367,700	)
non-current portion and discount	$	1,961,000		$	79,500		$	2,040,500		$	2,600,600		$	47,500		$	2,648,100

5.8% and 8% Notes payable to insurance
premium financing company (current)	$	4,200		$	-		$	4,200		$	4,600		$	-		$	4,600

10% Notes payable to vendors for accounts
payable converted to notes payable	$	128,800		$	23,300		$	152,100		$	165,400		$	16,800		$	182,200
less: current portion		(128,800	)		(23,300	)		(152,100	)		(146,000	)		-			(146,000	)
non-current portion	$	-		$	-		$	-		$	19,400		$	16,800		$	36,200

Total notes payable to unrelated parties	$	2,603,700		$	105,300		$	2,709,000		$	3,202,100		$	64,700		$	3,266,800
less: current portion		(591,400	)		(25,800	)		(617,200	)		(582,100	)		(400	)		(582,500	)
non-current portion and discount	$	2,012,300		$	79,500		$	2,091,800		$	2,620,000		$	64,300		$	2,684,300

*Notes payable to related parties:*
April 2011 7 % Note to Cato Holding Co.	$	-		$	-		$	-		$	293,300		$	6,900		$	300,200
October 2012 7.5% Note to Cato Holding Co.		293,600			7,400			301,000			-			-			-
October 2012 7.5% Note to Cato Research Ltd., payable solely in restricted shares of the Company's common stock (1)		1,009,000			36,200			1,045,200			-			-			-
		1,302,600			43,600			1,346,200			293,300			6,900			300,200
Note discount		(147,200	)		-			(147,200	)		(24,300	)		-			(24,300	)
Total notes payable to related parties		1,155,400			43,600			1,199,000			269,000			6,900			275,900
less: current portion		(85,600	)		(7,400	)		(93,000	)		(168,200	)		-			(168,200	)
non-current portion and discount	$	1,069,800		$	36,200		$	1,106,000		$	100,800		$	6,900		$	107,700

(1) See description of debt restructuring in Note 8.

Senior Secured Convertible Promissory Notes issued to Platinum

On July 2, 2012 and on August 31, 2012, the Company issued to Platinum senior secured convertible promissory notes in the principal amount of $500,000 (the “July 2012 Platinum Note”) and $750,000 (the "August 2012 Platinum Note"), respectively. The July 2012 Platinum Note and the August 2012 Platinum Note each accrued interest at the rate of 10% per annum and were due and payable on July 2, 2015. The July 2012 Platinum Note and the August 2012 Platinum Note were each mandatorily convertible into securities that may be issued by the Company in an equity, equity-based, or debt financing, or series of financings, subsequent to the issuance of the note resulting in gross proceeds to the Company of at least $3,000,000, excluding any additional investment by Platinum.

On October 11, 2012, the Company and Platinum entered into a Note Exchange and Purchase Agreement (the “October 2012 Agreement”) in which the July 2012 Platinum Note and the August 2012 Platinum Note (together, the “Existing Notes”), as well as the related accrued interest, were consolidated into and exchanged for a single senior secured convertible note in the amount of $1,272,577 (the “Exchange Note”) and Platinum agreed to purchase four additional 10% senior secured convertible promissory notes in the aggregate principal amount of $2.0 million (the “Investment Notes”), issuable over four separate $500,000 tranches between October 2012 and December 2012. The first and second $500,000 Investment Notes, in the aggregate principal amount of $1.0 million, were purchased by Platinum on October 11, 2012 and October 19, 2012, respectively. The Company and Platinum also entered into an amended and restated Security Agreement to secure repayment of all obligations due and payable under the terms of the Investment Notes and Exchange Note.

On November 14, 2012 and January 31, 2013, the Company and Platinum entered into amendments to the October 2012 Agreement (the “NEPA Amendments”), pursuant to which the final two $500,000 tranches contemplated by the October 2012 Agreement were combined into a single Investment Note in the aggregate principal amount of $1.0 million (the “$1.0 Million Note”). Under the terms and conditions of the NEPA Amendment, Platinum agreed to purchase the $1.0 Million Note within five business days of the Company's notice to Platinum of the consummation of a debt or equity financing, or combination of financings, prior to February 15, 2013, resulting in gross proceeds to the Company of at least $1.0 million (the “Additional Financing Requirement”). The Company satisfied the Additional Financing Requirement on February 12, 2013 (See Note 9, Capital Stock). Effective February 22, 2013, the Company and Platinum entered into an additional amendment to the October 2012 Agreement pursuant to which Platinum agreed to purchase an Investment Note in the face amount of $250,000 on February 22, 2013 and an additional Investment Note in the face amount of $750,000 on or before March 12, 2013, which Investment Note was issued by the Company and purchased by Platinum on March 12, 2013.

The Exchange Note and each Investment Note (together, the “Notes”) accrue interest at a rate of 10% per annum and, subject to certain limitations and exceptions set forth in the Notes, unless converted earlier and voluntarily by Platinum, will be due and payable in restricted shares of the Company’s common stock on October 11, 2015, or three years from the date of issuance, as determined by the terms of the Investment Notes. At maturity, all principal and accrued interest under the Notes shall be payable by the Company through the issuance of restricted shares of common stock to Platinum. Subject to certain potential adjustments set forth in the Notes, the number of restricted shares of common stock issuable as payment in full for each of the Notes at maturity will be calculated by dividing the outstanding Note balance plus accrued interest by $0.50 per share. Prior to maturity, the outstanding principal and any accrued interest on the Exchange Note and each of the Investment Notes is convertible, in whole or in part, at Platinum’s option into shares of the Company’s common stock at a conversion price of $0.50 per share, subject to certain adjustments. The conversion feature in each of the Notes constituted a beneficial conversion feature at the date of issuance.

As additional consideration for the purchase of the Investment Notes, the Company agreed to issue to Platinum warrants to purchase an aggregate of 2,000,000 shares of the Company’s common stock, issuable in separate tranches together with each Investment Note, of which a warrant to purchase 500,000 shares was issued to Platinum on October 11, 2012 and on October 19, 2012, a warrant to purchase 250,000 shares was issued to Platinum on February 22, 2013 and a warrant to purchase 750,000 shares was issued to Platinum on March 12, 2013 (each an “Investment Warrant”). In addition, the Company issued Platinum a warrant to purchase 1,272,577 shares of the Company’s common stock in connection with the issuance of the Exchange Note (the “Exchange Warrant”). At issuance, the Platinum Exchange Warrant and each Investment Warrant has a term of 5 years and an exercise price of $1.50 per share, subject to certain adjustments. See Note 16, Subsequent Events, regarding a modification of the exercise price of the Exchange Warrant and the Investment Warrants. The Company and Platinum also executed and subsequently amended a security agreement to secure repayment of all obligations due and payable under the terms of the Exchange Note and all of the Investment Notes.

As a result of the beneficial conversion feature in the Exchange Note and the issuance of the Exchange Warrant, the Company determined that the cancellation of the Existing Notes and the issuance of the Exchange Note should be accounted for as an extinguishment of debt. The Company determined that the fair value of the Exchange Note, including the beneficial conversion feature, was $2,355,800 using a Monte Carlo simulation model and inception-date assumptions including market price of common stock of $0.75 per share; stock price volatility of 85%; risk-free interest rate of 0.67%; conversion price of $0.50 per share; note term of 3 years; 75% probability that conversion would occur at or immediately prior to maturity; and 25% probability that an event requiring either the repayment of the Exchange Note or its conversion into common stock would occur prior to maturity. The fair value of the Exchange Note at inception represented a substantial premium over its face value. In accordance with the provisions of ASC 470-20, Debt with Conversion and Other Options, the Company recognized the premium in excess of the face value, $1,083,200, as a non-cash charge to loss on early extinguishment of debt in the accompanying Consolidated Statement of Operations and Comprehensive Income for the year ended March 31, 2013 and as a credit to additional paid-in capital and recorded the liability for the Exchange Note at its face value.

Subject to limited exceptions, which include issuances of common stock pursuant to the 2012 Private Placement of Units (see Note 9, Capital Stock), the Exchange Warrant and each of the Investment Warrants include certain exercise price reset and anti-dilution protection features in the event that the Company issues other shares of common stock during the five-year term of the warrants at a price less than their initial $1.50 per share exercise price. As a result of these provisions, the Exchange Warrant and the Investment Warrants do not meet the criteria set forth in ASC 815, Derivatives and Hedging, to be considered indexed to the Company’s own stock and treated as equity instruments. Consequently, the Company recorded the Exchange Warrant and each of the Investment Warrants as liabilities at their fair value, which was estimated at the issuance date using a Monte Carlo simulation model and the following assumptions:

	Exchange			Investment Warrants Issued on:
	Warrant			10/11/2012			10/19/2012			2/22/2013			3/12/2013

Market price of common stock	$	0.75		$	0.75		$	0.75		$	0.60		$	0.80
Exercise price	$	1.50		$	1.50		$	1.50		$	1.50		$	1.50
Risk-free interest rate		0.67	%		0.67	%		0.67	%		0.84	%		0.88	%
Volatility		85.0	%		85.0	%		85.0	%		85.0	%		85.0	%
Term (years)		5.0			5.0			5.0			5.0			5.0
Dividend rate		0	%		0	%		0	%		0	%		0	%

Fair value per share	$	0.53		$	0.53		$	0.53		$	0.39		$	0.52
Number of shares		1,272,577			500,000			500,000			250,000			750,000
Fair value at date of issuance	$	672,000		$	264,000		$	264,000		$	97,000		$	393,000

The fair value of the Exchange Warrant at the date of issuance was recorded as a liability and as a corresponding charge to loss on early extinguishment of debt in the accompanying Consolidated Statement of Operations and Comprehensive Income for the year ended March 31, 2013. The fair value of each Investment Warrant at the date of issuance was recorded as a liability and as a corresponding discount to the related Investment Note. Subject to limitations of the absolute amount of discount attributable to each Investment Note, the Company treated the issuance-date intrinsic value of the beneficial conversion feature embedded in each Investment Note as an additional component of the discount attributable to each Investment Note and recorded a discount attributable to the beneficial conversion feature for each Investment Note. The Company amortizes the aggregate discount attributable to each of the Investment Notes using the interest method over the respective term of each note. The table below summarizes the components of the discount and the effective interest rate at inception for the Exchange Note and each of the Investment Notes.

	Inception Date Carrying Value of
	Exchange			Investment Notes Issued on:
	Note			10/11/2012			10/19/2012			2/22/2013			3/12/2013

Face value	$	1,272,600		$	500,000		$	500,000		$	250,000		$	750,000
Discount attributable to:
Fair value of warrant		-			(264,000	)		(264,000	)		(97,000	)		(393,000	)
Beneficial conversion feature		-			(231,000	)		(231,000	)		(147,000	)		(349,500	)

Inception date carrying value	$	1,272,600		$	5,000		$	5,000		$	6,000		$	7,500

Effective Interest Rate		10.00	%		159.05	%		159.05	%		127.27	%		159.05	%

The fair value of the Exchange Warrant and Investment Warrants was re-measured as of March 31, 2013 at an aggregate of $1,988,000 and the $298,000 increase in fair value since inception was reflected in the accompanying Consolidated Statement of Operations and Comprehensive Income for the year ended March 31, 2013.

May 2011 Platinum Note

During 2007 and 2008, the Company issued three convertible promissory notes with an aggregate principal balance of $4.0 million to Platinum (the “Original Platinum Notes”). In conjunction with the issuance of the Original Platinum Notes, the Company also issued warrants to Platinum to purchase an aggregate of 560,000 shares of the Company’s common stock. On May 5, 2011, the Original Platinum Notes were amended, restated and consolidated into a single note (the “May 2011Platinum Note”) with a principal balance of $4.0 million and an extended maturity date of June 30, 2012, a one year extension from the June 30, 2011 maturity date of the Original Platinum Notes (the “May 2011 Amendment”). The May 2011 Platinum Note continued to bear interest at an annual rate of 10%. Platinum retained the right, in its sole discretion, to extend the maturity date of the May 2011 Platinum Note by one year to June 30, 2013. The May 2011 Platinum Note would have been automatically converted, subject to certain conditions, upon the last to occur of (i) the closing of an equity or equity-based financing or series of equity or equity-based financings after May 1, 2011 resulting in gross proceeds to the Company totaling at least $5.0 million, including the 2011 Private Placement (see Note 9, Capital Stock) and cancellation of debt not otherwise convertible; and (ii) the Company becoming a publicly traded company ("Amended Qualified Financing"). The number of shares issuable to Platinum upon the automatic conversion of the May 2011 Platinum Note would have been determined in accordance with one of the following three formulas, as selected by Platinum in its sole discretion: (i) the outstanding principal plus accrued but unpaid interest ("Outstanding Balance") as of the closing of the Amended Qualified Financing multiplied by 1.25 and divided by $1.75 per share; (ii) the Outstanding Balance as of the closing of the Amended Qualified Financing multiplied by 1.25 and divided by the per share price of shares sold in the Amended Qualified Financing; or (iii) the Outstanding Balance as of the closing of the Amended Qualified Financing divided by the Company's per share price assuming a pre-Amended Qualified Financing valuation of the Company of $30 million on a fully-diluted basis, subject to certain exclusions. Under the May 2011 Platinum Note, the cash payment option previously included in the Original Platinum Notes was eliminated. In the event the Company had completed an Amended Qualified Financing prior to December 31, 2011, interest accrued on the May 2011 Platinum Note from May 5, 2011 through the date of the closing of the Amended Qualified Financing would have been forgiven.

The May 2011 Platinum Note would have been voluntarily convertible, at the option of Platinum, at any time prior to an Amended Qualified Financing or its maturity date into restricted shares of common stock determined by multiplying the Outstanding Balance being converted by 1.25 and dividing by the lesser of (i) $1.75 per share; (ii) the per share price in any subsequent equity financing; or (iii) the per share price assuming a $30 million valuation of the Company on a fully diluted basis (subject to certain exclusions). Platinum could have elected to convert the May 2011 Platinum Note at any time, but was not obligated to convert the May 2011 Platinum Note until the restricted shares issuable upon conversion of the note were freely tradable pursuant to an effective registration statement or could have been sold in any ninety day period without registration under the Securities Act of 1933, as amended (“Securities Act”), in compliance with Rule 144. Additionally, Platinum could not have converted the May 2011 Platinum Note if the shares issuable upon conversion would result in it beneficially owning in excess of 9.99% of the then outstanding shares of the Company's common stock. However, Platinum could have waived this condition upon giving 61 days’ notice to the Company.

In connection with the issuance of the May 2011 Platinum Note, the Company issued to Platinum a three-year warrant to purchase 825,574 restricted shares of the Company’s common stock at an exercise price of $2.50 per share. The warrant would have expired on May 5, 2014, and become exercisable upon Platinum’s conversion of the May 2011 Platinum Note and would have been exercisable for one-fourth (1/4) of the number of shares issued in the conversion.

In December 2011, the Company and Platinum entered into a Note and Warrant Exchange Agreement pursuant to which the May 2011 Platinum Note was cancelled and all warrants issued to Platinum were exercised in exchange for restricted shares of the Company’s new Series A Preferred stock. See Note and Warrant Exchange Agreement below.

The Company evaluated the extension of the maturity date of the Original Platinum Notes along with the issuance of the new three-year warrant and determined that the modifications were to be accounted for as a troubled debt restructuring on a prospective basis. The Company recorded a discount to the May 2011 Platinum Note of $908,900, which amount was equal to the incremental fair value of the note conversion feature and the cash payment or put option liability, and the fair value of the new warrant. The note discount was to be amortized as non-cash interest expense over the remaining term of the May 2011 Platinum Note using the effective interest method. The effective annual interest rate of the May 2011 Platinum Note was determined to be 17.3%, based on the amount of the note discount, the stated interest rate, and the note term.

Warrant Liability related to Original Platinum Notes

The warrants issued with the Original Platinum Notes included certain exercise price adjustment features and accordingly were not deemed to be indexed to the Company’s common stock. At issuance, the Company recorded the estimated fair value of the warrant liability of $151,300 as a non-current liability in the consolidated balance sheet. Changes in the estimated fair value of the warrant liability were recorded in other income (expense) in the Consolidated Statement of Operations and Comprehensive Loss until the closing of the Merger on May 11, 2011, when the amended warrants no longer contained the exercise price adjustment features, at which time the warrants were deemed to be indexed to the Company’s common stock and therefore no longer treated as a liability. The warrant liability was recorded at its fair value of $424,100 at May 11, 2011, which resulted in non-cash expense of $7,000 that was charged to other income (expense) in the first quarter of the fiscal year ended March 31, 2012. As of May 11, 2011, $424,100, the then-current aggregate fair value of these warrants, was reclassified from warrant liability to additional paid-in capital, a component of stockholders’ deficit.

December 2011 Note and Warrant Exchange Agreement with Platinum

On December 29, 2011, the Company and Platinum entered into a Note and Warrant Exchange Agreement pursuant to which the May 2011 Platinum Note and all outstanding warrants issued to Platinum to purchase an aggregate of 1,599,858 restricted shares of the Company’s common stock were cancelled in exchange for 391,075 restricted shares of the Company’s newly-created Series A Preferred Stock (“Series A Preferred”). Each share of Series A Preferred was initially convertible into ten shares of the Company’s common stock (see Note 9, Capital Stock). The Company issued 231,090 restricted shares of Series A Preferred to Platinum in connection with the note cancellation based on the sum of the $4,000,000 principal balance of the Platinum Note plus accrued but unpaid interest through May 11, 2011 adjusted for a 125% conversion premium, net of the $1,719,800 aggregate exercise price of the outstanding 1,599,858 warrants held by Platinum, and a contractual conversion basis of $1.75 per common share, all adjusted for the stated 1:10 Series A Preferred to common exchange ratio. An additional 159,985 restricted shares of Series A Preferred were issued to Platinum in connection with the warrant exercise and exchange to acquire the common shares issued upon the warrant exercise.

The Company determined that the cancellation of the Platinum Note and exercise of the warrants pursuant to the Note and Warrant Exchange Agreement should be accounted for as a debt extinguishment. The Company estimated the fair value of the restricted shares of Series A Preferred stock tendered to Platinum for the cancellation of the Platinum Note under the terms of the agreement at $15.51 per share ($1.55 on a per common share equivalent basis). The Company recorded a loss of $1,193,500 attributable to the early debt extinguishment, reported in Other expenses, net in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended March 31, 2012. The loss includes $287,278, calculated using the Black-Scholes Option Pricing Model, representing the incremental fair value of the warrants exercised by Platinum as modified to reduce their exercise price. (See Discounted Warrant Exercise Program in Note 9, Capital Stock, for a description of the modification of warrant exercise prices and the resulting valuation that occurred during the quarter ended December 31, 2011.) The restricted common shares issued in connection with the warrant exercise that were exchanged for shares of Series A Preferred Stock are treated as Treasury Stock in the accompanying Consolidated Balance Sheets at March 31, 2013 and 2012.

February 2012 Convertible Promissory 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 accrued interest at the rate of 12% per annum and was to mature 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 holders of the Notes had the right to 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 restricted 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 consummated 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, was at least $2.00 (a “Qualified Financing”), the Outstanding Balance would have automatically converted into such securities, including warrants, that were issued in the Qualified Financing, the amount of which would have been 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 five-year warrant to purchase, for $2.75 per share, the number of restricted 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 restricted shares of the Company’s common stock upon exercise of the warrants (the “Warrant Shares”). The warrants terminate, if not exercised, five years from the date of issuance. The Company valued the warrants at a fair value of $1.99 per share on the date of issuance using the Black-Scholes option pricing model and the following assumptions: fair value of common stock - $2.85; risk-free interest rate – 0.84%; volatility – 89.9%; contractual term – 5.00 years; dividend rate – 0%.

The Company allocated the proceeds from the Notes and associated warrants based on their relative fair values. The relative fair value attributable to the warrants was $260,076, which the Company recorded as a discount to the Notes and a corresponding credit to additional paid-in capital. The Company recorded an additional note discount of $235,084 for the fair value of the non-contingent beneficial conversion feature of the Notes. The note discounts totaling $495,160 were to be amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate on the Notes at the date of issuance was 268.9% based on the stated interest rate, the amount of discount, and the term of the Notes.

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”). Should the Company not have filed the registration statement by the Filing Deadline or if the registration statement had not been declared effective by the agreed upon effectiveness deadline, the Company was 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.

On November 15, 2012, the holders of the February 2012 Notes entered into an Exchange Agreement with the Company (the "Exchange Agreement"). Under the terms of the Exchange Agreement, (i) the current amount due under the terms of the February 2012 Notes, $678,600, which amount included all accrued interest as well as additional consideration for the conversion, was exchanged for a total of 1,357,281 restricted shares of the Company's common stock and five-year warrants to purchase 678,641 restricted shares of the Company's common stock at an exercise price of $1.50 per share (the "Note Exchange Securities"); and (ii) the Registration Rights Agreement was terminated. Additionally, the Company issued a five-year warrant to purchase 72,000 restricted shares of the Company’s common stock at an exercise price of $1.50 per share as partial compensation to an investment bank that had placed certain of the Notes. The Company recorded the issuance of the warrants with a charge to interest expense of $28,200 and a corresponding credit to additional paid-in capital.

The Company determined that the exchange of the Notes into restricted shares of its common stock should be accounted for as an extinguishment of debt. The Company recognized as consideration in the exchange the sum of (i) the fair value of the restricted common stock issued in the exchange at the quoted market price of $0.70 per share on the date of the exchange, or $950,100, and (ii) the fair value of the warrants, which was determined to be $0.39 per share, or $265,500, using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.70; exercise price per share: $1.50; risk-free interest rate: 0.62%; contractual term: 5 years; volatility: 89.5%; expected dividend rate: 0%. The aggregate consideration less the net carrying value of the Notes, including accrued interest, resulted in the recognition of $1,145,100 as a non-cash loss on early extinguishment of debt in the accompanying Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2013. The warrants issued to the investment bank were valued using the same assumptions as used for the warrants issued to the exchanging note holders.

Restructuring of Note Payable to Morrison & Foerster

On May 5, 2011, the Company and Morrison & Foerster LLP (“Morrison & Foerster”), then the Company’s general corporate and and intellectual property counsel, amended a previously outstanding note (the “Original Note”) issued by the Company in payment of legal services (the “Amended Note”). Under the Amended Note, the principal balance of the Original Note was increased to $2,200,000, interest accrued at the rate of 7.5% per annum, and the Company was required to make an additional payment of $100,000 within three business days of the date of the Amended Note. The Company made the required $100,000 payment in a timely manner.

On August 31, 2012, the Company restructured the Amended Note (the “Restructuring Agreement”). Pursuant to the Restructuring Agreement, the Company issued to Morrison & Foerster two new unsecured promissory notes to replace the Amended Note, one in the principal amount of $1,000,000 ("Replacement Note A") and the other in the principal amount of $1,379,400 ("Replacement Note B") (together, the "Replacement Notes"); amended an outstanding warrant to purchase restricted shares of the Company’s common stock (the “Amended M&F Warrant”); and issued a new warrant to purchase restricted shares of the Company’s common stock (the “New M&F Warrant”). Under the terms of the Restructuring Agreement, the Amended Note was cancelled and all of the Company's past due payment obligations under the Amended Note were satisfied. The Company made a payment of $155,000 to Morrison & Foerster on August 31, 2012 pursuant to the terms of the Amended Note, and issued the Replacement Notes, each dated as of August 31, 2012. Both Replacement Notes accrue interest at the rate of 7.5% per annum and are due and payable on March 31, 2016. Replacement Note A requires monthly payments of $15,000 per month through March 31, 2013, and $25,000 per month thereafter until maturity. Payment of the principal and interest on Replacement Note B will be made solely in restricted shares of the Company’s common stock pursuant to Morrison & Foerster’s surrender from time to time of all or a portion of the principal and interest balance due on Replacement Note B in connection with its exercise of the New M&F Warrant, at an exercise price of $1.00 per share, and concurrent cancellation of indebtedness and surrender of Replacement Note B; provided, however, that Morrison & Foerster shall have the option to require payment of Replacement Note B in cash upon the occurrence of a change in control of the Company or an event of default, and only in such circumstances.

The Company treated the aggregate of the incremental value of the Amended M&F Warrant and the fair value of the New M&F Warrant as a discount to the Replacement Notes. Under the terms of the Amended M&F Warrant, the Company amended the warrant to purchase 425,000 restricted shares of its common stock originally issued to Morrison & Foerster on March 15, 2010 to extend the expiration date of the warrant from December 31, 2014 to September 15, 2017 and to provide for exercise by paying cash or by the cancellation in whole or in part of the Company’s indebtedness under either of the Replacement Notes. The Company determined that the incremental value of the Amended M&F Warrant was $121,650 at the modification date using the Black-Scholes Option Pricing Model and the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share	$	0.94		$	0.94
Exercise price per share	$	2.00		$	2.00
Risk-free interest rate		0.25	%		0.60	%
Expected term in years		2.33			5.04
Volatility		77.9	%		88.8	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	0.24		$	0.52

The New M&F Warrant is exercisable for the number of restricted shares of the Company’s common stock equal to the principal and accrued interest due under the terms of Replacement Note B divided by the warrant exercise price of $1.00 per share. At the August 31, 2012 date of grant, the New M&F Warrant was exercisable to purchase 1,379,376 restricted shares of the Company’s common stock. The New M&F Warrant effectively permits exercise only by the cancellation in whole or in part of the Company’s indebtedness under either of the Replacement Notes. The New M&F Warrant expires on September 15, 2017. The Company determined the fair value of the New M&F Warrant to be $0.64 per share, or $876,800, at the date of grant using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.94; exercise price per share: $1.00; risk-free interest rate: 0.61%; contractual term: 5.04 years; volatility: 88.8%; expected dividend rate: 0%. The note discounts totaling $1,197,900, including the $199,500 remaining unamortized discount recorded prior to the modification, will be amortized to interest expense using the effective interest method over the term of the Replacement Notes. The aggregate amount of the incremental fair value of the Amended M&F Warrant and the fair value of the New M&F Warrant, $998,450, was recognized as equity and was credited to additional paid-in capital in the accompanying Consolidated Balance Sheets. The effective interest rate on the Replacement Notes at the date of issuance was 32.3%, based on the stated interest rate, the amount of discount, and the term of the Replacement Notes. Through March 31, 2013, the Company has adjusted the New M&F Warrant to increase the number of restricted shares available for purchase by 60,088 shares, based on interest accrued on Replacement Note B through that date. The Company has recorded the fair value of the additional shares as a charge to interest expense and a corresponding credit to additional paid-in capital.

Restructuring of Accounts Payable to Cato Research Ltd. (“CRL”)

On October 10, 2012, the Company issued to CRL, a contract research and development partner and a related party: (i) an unsecured promissory note in the initial principal amount of $1,009,000, which is payable solely in restricted shares of the Company’s common stock and which accrues interest at the rate of 7.5% per annum, compounded monthly (the “CRL Note”), as payment in full for all contract research and development services and regulatory advice (“CRO Services”) rendered by CRL to the Company and its affiliates through December 31, 2012 with respect to the non-clinical and clinical development of AV-101, and (ii) a five-year warrant to purchase, at a price of $1.00 per share, 1,009,000 restricted shares of the Company’s common stock, the amount equal to the sum of the principal amount of the CRL Note, plus all accrued interest thereon, divided by $1.00 per share (the “CRL Warrant”). The principal amount of the CRL Note may, at the Company’s option, be automatically increased as a result of future CRO Services rendered by CRL to the Company and its affiliates from January 1, 2013 to June 30, 2013. The CRL Note is due and payable on March 31, 2016 and is payable solely by CRL's surrender from time to time of all or a portion of the principal and interest balance due on the CRL Note in connection with its concurrent exercise of the CRL Warrant, provided, however, that CRL will have the option to require payment of the CRL Note in cash upon the occurrence of a change in control of the Company or an event of default, and only in such circumstances.

The Company determined that the cancellation of the accounts payable to CRL for CRO Services and the related issuance of the CRL Note should be accounted for as an extinguishment of debt. Accordingly, the Company recorded the CRL Note at its fair value of $857,900 based on the present value of its scheduled cash flows and assumptions regarding market interest rates for unsecured debt of similar quality. The Company determined the fair value of the CRL Warrant to be $0.48 per share, or $486,164, using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.75; exercise price per share: $1.00; risk-free interest rate: 0.66%; contractual term: 5 years; volatility: 89.9%; expected dividend rate: 0%. The Company recognized the difference between the sum of the fair values of the CRL Note and the CRL Warrant less the accounts payable balance due to CRL, $335,100, as a non-cash loss on early extinguishment of debt in the accompanying Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2013. The fair value of the warrant, $486,164, which is treated as an equity instrument, was credited to additional paid in capital at the issuance date. The difference between the face value of the CRL Note and its fair value, $151,100, has been treated as a discount to the note and is being amortized over the term of the note using the interest method, resulting in an effective interest rate of 12.1% on the CRL Note. Through March 31, 2013, the Company has adjusted the CRL Warrant to increase the number of restricted shares available for purchase by 36,188 shares, based on interest accrued on the CRL Note through that date. The Company has recorded the fair value of the additional shares as a charge to interest expense and a corresponding credit to additional paid-in capital.

Issuance and Restructuring of Long-Term Promissory Note to Cato Holding Company

In April 2011, all amounts owed by the Company to Cato Holding Company ("CHC") and its affiliates, which included the $105,000 balance of an August 2010 Short-Term Note issued to Cato BioVentures, were consolidated into a single note, in the principal amount of $352,273 (the “2011 CHC Note”). Concurrently, CHC released all of its security interests in certain of the Company’s personal property. The 2011 CHC note accrued 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 was repaid in full. The Company had the option to prepay the outstanding balance under this note in full or in part at any time during its term without penalty.

On October 10, 2012, the Company and CHC restructured the 2011 CHC Note. The 2011 CHC Note was cancelled and exchanged for a new unsecured promissory note in the principal amount of $310,443 (the “2012 CHC Note”) and a five-year warrant to purchase 250,000 restricted shares of the Company’s common stock at a price of $1.50 per share (the “CHC Warrant”). The 2012 CHC Note accrues interest at a rate of 7.5% per annum and is due and payable in monthly installments of $10,000, beginning November 1, 2012 and continuing until the outstanding balance is paid in full.

The Company determined that the cancellation of the 2011 CHC Note and the issuance of the 2012 CHC Note should be accounted for as an extinguishment of debt. Accordingly, the Company recorded the 2012 CHC Note at its fair value of $291,100 based on the present value of its scheduled cash flows and assumptions regarding market interest rates for unsecured debt of similar quality. The Company determined the fair value of the CHC Warrant to be $0.48 per share, or $120,462, using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.75; exercise price per share: $1.50; risk-free interest rate: 0.66%; contractual term: 5 years; volatility: 89.9%; expected dividend rate: 0%. The Company recognized the difference between the sum of the fair values of the 2012 CHC Note and the CHC Warrant less the carrying value of the 2011 CHC Note, $119,100, as a non-cash loss on early extinguishment of debt in the accompanying Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2013. The fair value of the warrant, $120,462, which is treated as an equity instrument, was credited to additional paid in capital at the issuance date. The difference between the face value of the 2012 CHC Note and its fair value, $19,343, has been treated as a discount to the note and is being amortized over the term of the note using the interest method, resulting in an effective interest rate of 11.9% on the CHC 2012 Note.

Restructuring of Accounts Payable to University Health Network (“UHN”)

On October 10, 2012, the Company issued to UHN: (i) an unsecured promissory note in the principal amount of $549,500, which is payable solely in restricted shares of the Company’s common stock and which accrues interest at the rate of 7.5% per annum, as payment in full for all sponsored stem cell research and development activities by UHN and Gordon Keller, Ph.D. under the SCRA through September 30, 2012 (the “UHN Note”), and (ii) a five-year warrant to purchase, at a price of $1.00 per share, 549,500 restricted shares of the Company’s common stock, the amount equal to the sum of the principal amount of the UHN Note, plus all accrued interest thereon, divided by $1.00 per share (the “UHN Warrant”). The UHN Note is due and payable on March 31, 2016 and is payable solely by UHN's surrender from time to time of all or a portion of the principal and interest balance due on the UHN Note in connection with its concurrent exercise of the UHN Warrant, provided, however, that UHN will have the option to require payment of the UHN Note in cash upon the occurrence of a change in control of the Company or an event of default, and only in such circumstances.

The Company determined that the restructuring of the accounts payable to UHN under the SRCA, defined below, and the related issuance of the UHN Note should be accounted for as an extinguishment of debt. Accordingly, the Company recorded the UHN Note at its fair value of $467,211 based on the present value of its scheduled cash flows and assumptions regarding market interest rates for unsecured debt of similar quality. The Company determined the fair value of the UHN Warrant to be $0.48 per share, or $264,775, using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.75; exercise price per share: $1.00; risk-free interest rate: 0.66%; contractual term: 5 years; volatility: 89.9%; expected dividend rate: 0%. The Company recognized the difference between the sum of the fair values of the UHN Note and the UHN Warrant less the accounts payable balance due to UHN, $182,500, as a non-cash loss on early extinguishment of debt in the accompanying Consolidated Statements of Operations and Comprehensive Income for the year ended March 31, 2013. The fair value of the warrant, $264,775, which is treated as an equity instrument, was credited to additional paid in capital at the issuance date. The difference between the face value of the UHN Note and its fair value has been treated as a discount to the note and is being amortized over the term of the note using the interest method, resulting in an effective interest rate of 11.3% on the UHN Note. Through March 31, 2013, the Company has adjusted the UHN Warrant to increase the number of restricted shares available for purchase by 19,421 shares, based on interest accrued on the UHN Note through that date. The Company has recorded the fair value of the additional shares as a charge to interest expense and a corresponding credit to additional paid-in capital.

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 during any three-month period, 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 was required to make payments of CDN $4,000 per month beginning May 31, 2011, increasing to CDN $6,000 per month on January 31, 2012. Beginning on January 1, 2012, the Company is also required to make payments equal to one-half of one percent (0.5%) of the net proceeds of all private or public equity financings closed during the term of the note.

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 Canadian 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 was required to make payments of CDN $10,000 per month beginning May 31, 2011, which payment amounts increased to CDN $15,000 per month on January 31, 2012. 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.

On August 30, 2012, the Company issued a promissory note in the principal amount of $60,000 and 15,000 restricted shares of its common stock valued at a market price of $0.94 per share to Progressive Medical Research in settlement of past due obligations for clinical research services in the amount of $79,900. Under the terms of the settlement, the Company also agreed to make monthly cash payments of $5,000 in August 2012 through December 2012. The promissory note bears interest at 7% per annum and requires payments of $1,000 per month beginning January 15, 2013 until all principal and interest is paid in full. The note requires payment in full upon the sale of all or substantially all of the Company’s assets or upon the Company completing a financing transaction, or series of transactions, resulting in gross proceeds to the Company of at least $4.0 million in any three-month period, excluding proceeds from stock option or warrant exercises. The Company charged the loss on the settlement to interest expense.

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

In August 2010, the Company issued short-term, (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 restricted shares of the Company’s common stock and three-year warrants to purchase restricted 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 a non-interest bearing, unsecured promissory note issued in August 2010 in the face amount of $175,000 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 repaid the note and accrued interest in installments through March 2013.

Notes Payable Issued for the Cancellation of Accounts Payable

On October 12, 2009, the Company issued a promissory note payable to the Regents of the University of California (“UC”) with a principal balance of $90,000 in exchange for the cancellation of certain amounts payable under a research collaboration agreement (the “UC Note 1”). UC Note 1 was payable in monthly principal installments of $15,000 through May 30, 2010. Interest on UC Note 1 at 10% per annum was payable on May 30, 2010. If the Company had completed an initial public offering of its stock prior to May 30, 2010, the remaining balance of UC Note 1 would have been payable within 10 business days after the initial public offering was consummated. The Company made the first two monthly installments totaling an aggregate of $30,000. On February 25, 2010, the Company issued a promissory note payable to UC having a principal balance of $170,000 in exchange for the cancellation of the remaining $60,000 principal balance of UC Note 1 and certain amounts payable under a research collaboration agreement (“UC Note 2”). UC Note 2 was payable in monthly principal installments of $15,000 through May 31, 2010, with the remaining $125,000 plus all accrued and unpaid interest due on or before June 30, 2010. If the Company had completed an initial public offering of its stock prior to June 30, 2010, the remaining balance of the Note would have been payable within 10 business days after the initial public offering was consummated. On June 28, 2010, the Company amended UC Note 2 to extend the payment terms as follows: monthly installments of $15,000 payable through May 31, 2010, $10,000 due on June 30, 2010 and $115,000 plus all accrued and unpaid interest due and payable on or before August 30, 2010. On August 25, 2010 and again on October 30, 2010, the Company amended UC Note 2 to extend the date of the final installment payment to be made under UC Note 2 to December 31, 2010 while adding a strategic premium to preserve license rights under the research collaboration agreement in exchange for an increase in the then-outstanding principal amount of UC Note 2 by $15,000 to $125,000. On December 22, 2010, the Company amended UC Note 2 a fourth time and decreased the monthly payment amount to $5,000 with payments continuing until the outstanding balance of principal and interest is paid in full. The provision requiring the payment of the outstanding balance within 10 business days following the closing of an initial public offering remains unchanged.

On March 1, 2010, the Company issued a 10% promissory note with a principal balance of $75,000 to National Jewish Health in exchange for the cancellation of certain amounts payable for accrued royalties. The principal balance plus all accrued and unpaid interest was initially due on or before December 31, 2010 (“March 2010 Note”). If the Company had completed an initial public offering of its stock prior to any installment dates, $25,000 of the remaining balance of the March 2010 Note would have been due on June 30, 2010, and any remaining principal balance and all accrued and unpaid interest would have been payable within 90 business days after the initial public offering was consummated. On December 28, 2010, the Company amended the March 2010 Note and extended its maturity date to the first to occur of April 30, 2011 or 30 days following the closing of a financing with gross proceeds of $5,000,000 or more. The Company has been in extended discussions with the holder of the March 2010 Note and expects the Note will be cancelled in favor of certain amounts payable to the Company equal to or greater than the outstanding balance of the Note. At March 31, 2013, the Company has made no payments on the March 2010 Note.

On August 13, 2010, the Company issued a 10% promissory note with a principal balance of $40,962 to MicroConstants, Inc. in exchange for the cancellation of certain amounts payable for services rendered. Under the terms of this note, the Company is to make payments of $1,000 per month with any unpaid principal or accrued interest due and payable upon the first to occur of (i) August 1, 2013, (ii) the issuance and sale of equity securities whereby the Company raises at least $5,000,000 or (iii) the sale or acquisition of all or substantially all of the Company’s stock or assets.

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.

Capital Stock

12 Months Ended

Mar. 31, 2013

Capital Stock

Changes in Amounts of Capital Stock Authorized

At March 31, 2011 and prior to the Merger, Excaliber was authorized to issue up to 200,000,000 shares of common stock, $0.001 par value, and no shares of preferred stock. Effective with the Merger, the Company was authorized to issue up to 400,000,000 shares of common stock, $0.001 par value and no shares of preferred stock. On October 28, 2011, the Company held a special meeting of its stockholders at which the stockholders approved a proposal to amend its Articles of Incorporation to (1) reduce the number of shares of common stock the Company is authorized to issue from 400,000,000 shares to 200,000,000 shares; (2) authorize the Company to issue up to 10,000,000 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.

Series A 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 restricted share of Series A Preferred is convertible at the option of the holder into ten restricted shares of the Company's common stock. The Series A Preferred ranks prior to the common stock for purposes of liquidation preference.

The Series A Preferred has no separate dividend rights, however, whenever the Board of Directors declares a dividend on the common stock, each holder of record of a share of Series A Preferred shall be entitled to receive an amount equal to such dividend declared on one share of common stock multiplied by the number of shares of common stock into which such share of Series A Preferred could be converted on the Record Date.

Except with respect to transactions upon which the Series A Preferred shall be entitled to vote separately as a class, the Series A Preferred has no voting rights. The restricted common stock into which the Series A Preferred is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding shares of the Company’s common stock.

In the event of the liquidation, dissolution or winding up of the affairs of the Company, after payment or provision for payment of the debts and other liabilities of the Company, the holders of Series A Preferred then outstanding shall be entitled to receive an amount per share of Series A Preferred calculated by taking the total amount available for distribution to holders of all the Company's outstanding common stock before deduction of any preference payments for the Series A Preferred, divided by the total of (x), all of the then outstanding shares of the Company's common stock, plus (y) all of the shares of the Company's common stock into which all of the outstanding shares of the Series A Preferred can be converted before any payment shall be made or any assets distributed to the holders of the common stock or any other junior stock.

At March 31, 2013, there were 500,000 restricted shares of Series A Preferred outstanding, all issued to Platinum under the terms of the Note and Warrant Exchange Agreement described in Note 8, Convertible Promissory Notes and Other Notes Payable, and the December 2011 Common Stock Exchange Agreement, described below. Platinum’s exchange rights with respect to the Series A Preferred have been modified as described in the section entitled 2012 Exchange Agreement with Platinum and Deemed Dividend, below.

2011 Private Placement of Units

On May 11, 2011, and immediately preceding the closing of the Merger, VistaGen California sold 2,216,106 Units in a private placement for aggregate gross proceeds of $3,878,200, including $2,369,200 in cash, a $500,000 short-term note receivable due on September 6, 2011, cancellation of $840,000 of short-term notes maturing on April 30, 2011, a note cancellation premium of $94,500, and cancellation of $74,500 of accounts payable (the “2011 Private Placement”). The Units were sold for $1.75 per Unit and consisted of one restricted share of common stock and a three-year warrant to purchase one-fourth (1/4) of one restricted share of common stock at an exercise price of $2.50 per share. Warrants to purchase a total of 554,013 restricted shares of common stock were issued to the purchasers of the Units. Concurrently, VistaGen California issued to its placement agent three-year warrants to purchase 114,284 restricted shares of its common stock at $2.50 per share, and agreed to pay $200,000 in placement agent fees, $150,000 of which amount was paid on May 11, 2011.

In October 2011, VistaGen restructured the terms of a $500,000 short term promissory note received from an investor in conjunction with the 2011 Private Placement. The Company modified the note to extend the repayment term through September 1, 2012 and to increase the interest rate to 5% per annum. On November 8, 2012 the Company and the investor again amended the note to require payment of the outstanding balance of $256,000, reflecting unpaid principal and accrued interest, in twenty-four monthly payments of $11,000 beginning in December 2012 and continuing through November 2014, with a final payment of the remaining unpaid principal and interest due in December 2014. The outstanding principal balance of the note receivable at March 31, 2013 is $209,100.

Conversion of Convertible Promissory Notes

On May 11, 2011, concurrent with the Merger, holders of certain promissory notes issued by VistaGen California from 2006 through 2010 converted their notes totaling aggregate principal and interest of $6,174,793 into 3,528,290 Units, at a price of $1.75 per Unit. These Units were the same Units issued in connection with the 2011 Private Placement.

Conversion of Pre-Merger Preferred Stock

On May 11, 2011, concurrent with the Merger, all holders of VistaGen California's then-outstanding preferred stock converted all of their preferred shares into 2,884,655 restricted shares of VistaGen California common stock so that, at the completion of the Merger, VistaGen California had no shares of preferred stock outstanding.

Fall 2011 Follow-On Unit Offering

Beginning in October 2011, the Company initiated a follow-on private placement of Units. These Units were essentially the same as the Units issued in connection with the 2011 Private Placement, namely, each Unit was priced at $1.75 and consisted of one restricted share of the Company’s common stock and a three-year warrant to purchase one-fourth (1/4) of one restricted share of the Company’s common stock at an exercise price of $2.50 per share. The Company sold a total of 63,570 Units and received aggregate cash proceeds of $111,300.

Discounted Warrant Exercise Program

During the quarter ended December 31, 2011, certain warrant holders exercised warrants to purchase an aggregate of 3,121,259 restricted shares of the Company’s common stock at reduced exercise prices, including warrants to purchase 1,599,858 restricted shares of common stock exercised by Platinum under the terms of the Note and Warrant Exchange Agreement, as described in Note 8, Convertible Promissory Notes and Other Notes Payable. The warrants exercised by Platinum were exercised at reduced prices ranging from $0.75 per share to $1.25 per share, resulting in proceeds of $1,719,800 which was applied to reduce the outstanding balance of the Platinum Note and accrued interest under the terms of the Note and Exchange Agreement.

Other investors and service providers exercised warrants to purchase an aggregate of 1,028,860 restricted shares of the Company’s common stock at reduced exercise prices ranging from $0.75 per share to $1.31 per share. In conjunction with these exercises, the Company:

· issued 965,734 restricted shares of its common stock and received cash proceeds of $1,106,100;

· issued 29,426 restricted shares of its common stock to warrant holders who elected to exercise their warrants in lieu of payment by the Company in satisfaction of outstanding indebtedness to such holders totaling an aggregate of $30,100; and

· issued 33,700 restricted shares of its common stock to warrant holders who elected to exercise their warrants in lieu of payment by the Company in satisfaction of payment for services in the aggregate amount of $41,400 to be performed in the future by such holders.

Additionally, in December 2011, the Company entered into an Agreement Regarding Payment of Invoices and Warrant Exercises with Cato Holding Company (“CHC”), CRL, and certain individual warrant holders affiliated with CHC and CRL (collectively, the “CHC Affiliates”) under the terms of which CHC and the CHC Affiliates exercised warrants to purchase an aggregate of 492,541 restricted shares of the Company’s common stock at reduced exercise prices ranging from $0.88 per share to $1.25 per share. As a result of these warrant exercises, the Company received cash payments of $60,200 in connection with the exercise of warrants to purchase 68,417 restricted shares and, in lieu of cash payments for the remainder of the warrants to purchase 424,124 restricted shares, CHC and CRL agreed to the satisfaction of outstanding indebtedness to CRL in the amount of $245,300 and pre-payment for future services in the amount of $226,400.

The Company determined that the increase in the fair value of the warrants exercised as a result of the Discounted Warrant Exercise Program was $618,400, of which $287,300 is a component of the loss on debt extinguishment related to the conversion of the Platinum Note, as described in Note 8, Convertible Promissory Notes and Other Notes Payable, $101,200 is attributable to the modifications of the CHC and CHC Affiliates warrants and reflected in research and development expense, and $229,800 is reflected in general and administrative expense for the fiscal year ended March 31, 2012 in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The warrants subject to the exercise price modifications were valued at the inception of the Discounted Warrant Exercise Program using the Black-Scholes Option Pricing Model and using the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share	$	2.60		$	2.60
Exercise price per share	$	1.50 - $2.625		$	0.75 - $1.31
Risk-free interest rate		0.18% - 0.45	%		0.02	%
Expected term in years		0.90 – 3.25			0.25
Volatility		65.7% - 82.8	%		41.1	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.30		$	1.50

With respect to use of the Black-Scholes Option Pricing Model for determining the fair value of warrants issued or modified, the Company employs the following in determining its valuation input assumptions. 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 issuance or modification. Because of its short history as a public company, the Company estimates volatility based on the historical volatilities of a peer group of public companies over the expected term of the warrants. The risk-free rate of interest is based on the quoted constant maturity rate for U.S Treasury Bills on the date of issuance or 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.

December 2011 Common Stock Exchange Agreement with Platinum

On December 22, 2011, the Company entered into a Common Stock Exchange Agreement (the "Exchange Agreement") with Platinum, pursuant to which Platinum converted 484,000 restricted shares of the Company’s common stock into 45,980 restricted shares of the then newly created Series A Preferred (the "Exchange"). Each restricted share of Series A Preferred issued to Platinum is convertible into ten restricted shares of the Company’s common stock. In consideration for the Exchange, the Series A Preferred received by Platinum in connection with the Exchange is convertible into the equivalent of 0.95 restricted shares of common stock surrendered in connection with the Exchange. The Company determined the fair value of the common stock subject to the Exchange to be $1.55 per share and has reflected the 484,000 restricted common shares as treasury stock on that basis in the accompanying Consolidated Balance Sheet at March 31, 2012 and 2013.

2012 Exchange Agreement with Platinum and Deemed Dividend

On June 29, 2012, the Company and Platinum entered into an Exchange Agreement (the “2012 Platinum Exchange Agreement”) pursuant to which the Company agreed to issue Platinum 62,945 restricted shares of Series A Preferred in exchange for 629,450 restricted shares of common stock then owned by Platinum, in consideration for Platinum’s agreement to purchase from the Company the July 2012 Platinum Note, as described in Note 8, Convertible Promissory Notes and Other Notes Payable. Under the terms of the 2012 Platinum Exchange Agreement, Platinum, at its option, could have exchanged all or a portion of its Series A Preferred for the securities issued in connection with a qualified financing, an equity or equity-based financing, or series of financing transactions resulting in gross proceeds to the Company of at least $3.0 million, based on the stated value of $15.00 per share of Series A Preferred. The Company estimated the fair value of the Series A Preferred shares tendered to Platinum under the terms of the 2012 Platinum Exchange Agreement at $736,400 ($1.17 per share on a common share equivalent basis). Following the issuance of the Series A Preferred pursuant to the 2012 Platinum Exchange Agreement, Platinum owns all 500,000 authorized and outstanding restricted shares of the Company’s Series A Preferred, each share of which, in accordance with the certificate of designations, is convertible into ten shares of the Company’s common stock. The common shares exchanged for shares of Series A Preferred are treated as treasury stock in the accompanying Consolidated Balance Sheet at March 31, 2013.

Pursuant to the October 2012 Agreement described in Note 8, Convertible Promissory Notes and Other Notes Payable, Platinum’s exchange rights in the Series A Preferred were modified such that Platinum now has the right and option to exchange 500,000 restricted shares of the Company’s Series A Preferred that it holds for (i) a total of 15,000,000 restricted shares of the Company’s common stock, and (ii) a five-year warrant to purchase 7,500,000 restricted shares of the Company’s common stock at an initial exercise price of $1.50 per share (the “Series A Exchange Warrant”). The modification of the exchange ratio resulted in a deemed dividend of $7,125,000 to Platinum for accounting purposes, which has been reflected in the accompanying Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2013. The amount of the deemed dividend was determined based on the value of the 10 million incremental shares to which Platinum is entitled pursuant to the October 2012 Agreement valued at the $0.75 per share quoted market price for the Company’s common stock on the date of the agreement, an aggregate of $7.5 million, adjusted for an expected 95% probability of exercise of the exchange rights by Platinum. The fair value of the Series A Exchange Warrant, determined to be $0.43 per share, or $3,228,700, on the date of the agreement using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.75; exercise price per share: $1.50; risk-free interest rate: 0.67%; contractual term: 5 years; volatility: 89.9%; expected dividend rate: 0%; and adjusted for an expected 95% probability of exercise of the exchange rights by Platinum, was recognized as a liability in the amount of $3,068,200 at the date of the October 2012 Agreement, with a corresponding charge to Additional paid-in capital in the accompanying Consolidated Balance Sheet. The fair value of the Series A Exchange Warrant was treated as an additional component of the deemed dividend in the accompanying Consolidated Statement of Operations and Comprehensive Loss for the fiscal year ended March 31, 2013.

The fair value of the Series A Exchange Warrant was re-measured as of March 31, 2013 at $4,406,000 and the $1,337,800 increase in fair value since the date of the October 2012 Agreement was reflected in the accompanying Consolidated Statement of Operations and Comprehensive Loss for the year ended March 31, 2013.

2012 Private Placement of Units

Between September 2012 and March 2013, the Company sold 2,366,330 Units in a private placement to accredited investors and received cash proceeds of $1,133,200 and settled outstanding amounts payable for legal fees in lieu of cash payment for services in the amount of $50,000. The Units were sold for $0.50 per Unit and each Unit consisted of one restricted share of the Company’s common stock and a five year warrant to purchase one half (1/2) of one restricted share of the Company’s common stock at an exercise price of $1.50 per share. In addition, in November 2012, pursuant to an Exchange Agreement, the holders of the February 2012 Notes exchanged the aggregate amount of $678,600 due under the terms of such notes for a total of 678,641 Units, consisting of 1,357,281 restricted shares of the Company's common stock and five-year warrants to purchase 678,641 restricted shares of the Company's common stock at an exercise price of $1.50 per share. The gross cash proceeds from this private placement of Units satisfied the Additional Financing Requirement under the October 2012 Agreement with Platinum, as amended, described in Note 8, Convertible Promissory Notes and Other Notes Payable, entitling the Company to sell and requiring Platinum to purchase senior secured convertible promissory notes in the aggregate face amount of $1.0 million in February and March 2013. In connection with the settlement of legal fees payable by issuing Units, the Company recorded a loss on extinguishment of debt of $30,800 based on the fair market value of the common shares and the warrant comprising the Unit on the effective date of the settlement.

Common Stock and Warrant Grants

On April 29, 2011, VistaGen California issued 157,143 restricted shares of its common stock at a per share price of $1.75 as a prepayment for CRO services to be performed by Cato Research Ltd., a related party, during 2011. The prepayment of $275,000 was recognized in research and development expense in the Consolidated Statement of Operations and Comprehensive Loss as the services were performed by Cato Research, Ltd. during the fiscal year ended March 31, 2012.

In December 2010, VistaGen California agreed to issue 700,000 restricted shares of its common stock, valued at $1.50 per share, related to its execution of the second amendment to its Sponsored Research Collaboration Agreement (“SRCA”) with UHN as described in Note 12, Licensing and Collaborative Agreements, and recorded $1,050,000 of research and development expense in the Consolidated Statements of Operations for the fiscal year ended March 31, 2011. Such shares were issued in May 2011. In April 2011, VistaGen California agreed to issue to UHN an additional 100,000 restricted shares of its common stock valued at $1.75 per share in conjunction with its execution of the third amendment to the SRCA, as also described in Note 12, and recorded $175,000 of research and development expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012. Such shares were issued in May 2011.

On May 10, 2011, VistaGen California issued 75,000 restricted shares of common stock, valued at $1.75 per share, to a strategic consultant for services rendered and recorded $131,250 in general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012.

In January 2012, the Company issued an aggregate of 50,000 restricted shares of its common stock, valued at $3.15 per share, and three-year warrants to purchase an aggregate of 50,000 restricted shares of its common stock at an exercise price of $3.00 per share to two service providers as compensation for services. The Company recorded $157,500 in general and administrative expense in the Consolidated Statements of Operations for the fiscal year ended March 31, 2012 related to the restricted stock grants. The Company valued the warrants at a fair value of $1.73 per share on the date of issuance using the Black-Scholes option pricing model and the following assumptions: fair value of common stock - $3.15; risk-free interest rate – 0.40%; volatility – 84.6%; contractual term – 3.00 years; dividend rate – 0%, and recorded $86,700 in general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012 related to the warrant grants.

In February 2012, the Company granted four-year warrants to non-employee members of its Board of Directors and Scientific Advisory Board and to certain strategic consultants to purchase an aggregate of 280,000 restricted shares of its common stock at an exercise price of $3.00 per share. The Company valued the warrants at a fair value of $1.71 per share on the date of issuance using the Black-Scholes option pricing model and the following assumptions: fair value of common stock - $2.75; risk-free interest rate – 0.63%; volatility – 90.0%; contractual term – 4.00 years; dividend rate – 0%, and recorded $179,200 in research and development expense and $298,600 in general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012.

In March 2012, the Company granted three-year warrants to purchase an aggregate of 100,000 restricted shares of its common stock at an exercise price of $3.00 per share to investors who had exercised warrants generating more than $100,000 in cash proceeds to the Company during the Discounted Warrant Exercise Program. The Company valued the warrants at a fair value of $1.38 per share on the date of issuance using the Black-Scholes option pricing model and the following assumptions: fair value of common stock - $2.79; risk-free interest rate – 0.54%; volatility – 79.5%; contractual term – 3.00 years; dividend rate – 0%, and recorded $138,100 in interest expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012.

During March 2012, the Company issued 50,000 restricted shares of its common stock, valued at $2.79 per share, to a strategic consultant for services rendered and recorded $139,500 in general and administrative expense in expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012. The Company also issued 55,555 restricted shares of its common stock, valued at $2.79 per share, to University Health Network, a related party, in connection with the execution of License Agreement No. 2, and recorded $155,000 in research and development expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012. The Company also issued 8,000 restricted shares of its common stock, valued at $2.80 per share, in connection with the extension of the term of a promissory note, and recorded $22,400 in interest expense in the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended March 31, 2012.

In April 2012, the Company entered into a contract for investor relations consulting services pursuant to which it granted three-year warrants to purchase 50,000 restricted 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 initially recorded as a prepaid expense and was to be expensed over one year in accordance with the terms of the contract. The contract and related warrant were cancelled in October 2012 and the remaining amount attributable to the fair value of the warrant was expensed.

In June 2012, the Company entered into a contract for investor relations and public company support services through December 31, 2012 pursuant to which it granted 280,000 restricted 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 restricted 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 investor relations consulting services pursuant to which it granted 120,000 restricted 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.

In August 2012, the Company modified an existing warrant and issued a new warrant to Morrison & Foerster as additional consideration for the Restructuring Agreement, as disclosed in Note 8, Convertible Promissory Notes and Other Notes Payable. As described in Note 8, the Company has treated the aggregate of the incremental value of the Amended M&F Warrant and the fair value of the New M&F Warrant as a discount to the Replacement Notes, which discount is being amortized to interest expense using the effective interest rate method over the term of the Replacement Notes.

During August 2012, the Company issued 88,235 restricted shares of its common stock valued at a market price of $1.01 per share in settlement of a past-due obligation for business development consulting services in the amount of $25,000. The Company charged the loss on the settlement to interest expense. As disclosed in Note 8, Convertible Promissory Notes and Other Notes Payable, in August 2012, the Company issued a promissory note in the principal amount of $60,000 and 15,000 restricted shares of its common stock valued at $0.94 per share in settlement of its past due obligation for AV-101 clinical development services.

In February 2013, the Company entered into a contract for various strategic consulting services pursuant to which it granted a five-year warrant to purchase 25,000 shares of the Company’s common stock at an exercise price of $1.50 per share. The Company valued the warrant at $11,200 using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.79; exercise price per share: $1.50; risk-free interest rate: 0.84%; contractual term: 5 years; volatility: 87.14%; expected dividend rate: 0%, and expensed the fair value of the warrant during the fourth quarter of the fiscal year ended March 31, 2013.

On March 3, 2013, the Company granted ten-year warrants to purchase an aggregate of 3,000,000 restricted shares of the Company’s unregistered common stock at an exercise price of $0.64 per share to the independent members of its Board of Directors and certain of its officers. The warrants become exercisable for 50% of the shares on April 1, 2013, 25% of the shares on April 1, 2014 and 25% of the shares on April 1, 2015, provided that the warrant will become fully vested upon a change in control of the Company, as defined, or the consummation by the Company and a third party of a license or sale transaction involving at least one new drug rescue variant. The Company valued the warrants at $1,604,800 using the Black Scholes Option Pricing Model and the following assumptions: market price per share: $0.64; exercise price per share: $0.64; risk-free interest rate: 1.86%; contractual term: 10 years; volatility: 84.73%; expected dividend rate: 0%. The Company recognized stock compensation expense of $802,400 related to the grants in the fourth quarter of the fiscal year ended March 31, 2013.

Warrant Modifications

Between May and June 30, 2012, the Company offered certain warrant holders the opportunity to exercise their warrants to purchase restricted shares of the Company’s common stock at reduced exercise prices. The Company subsequently extended the offer through August 2012. Warrant holders exercised warrants to purchase an aggregate of 524,056 restricted shares of the Company’s common stock and the Company received cash proceeds of $262,000. In addition, certain warrant holders exercised warrants to purchase 25,000 restricted 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 on the exercise date for the exercises occurring after June 30, 2012, and determined that the increase in the fair value of the warrants exercised was $440,700, which is reflected in general and administrative expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended March 31, 2013. The warrants subject to the exercise price modifications were valued using the Black-Scholes Option Pricing Model and the following assumptions:

Assumption:	Pre-modification		Post-modification
Market price per share (weighted average)	$	1.95	$	1.95
Exercise price per share (weighted average)	$	2.75	$	0.50
Risk-free interest rate (weighted average)		0.29%		0.06%
Expected term in years (weighted average)		1.93		0.12
Volatility (weighted average)		78.0%		85.7%
Dividend rate		0.0%		0.0%

Weighted Average Fair Value per share	$	0.64	$	1.45

In connection with the foregoing exercises, the Company issued three-year warrants to purchase 183,025 restricted shares of the Company’s common stock at an exercise price of $3.00 per share. The Company valued these warrants at $35,900 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 February 2013, the Company modified certain outstanding warrants to purchase an aggregate of 1,706,709 restricted shares of the Company’s common stock at exercise prices in excess of $1.50 per share to reduce the exercise price to $1.50 per share. The Company determined that the increase in the fair value of the warrants exercised was $67,500, which is reflected in general and administrative expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss for the year ended March 31, 2013. The warrants subject to the exercise price modification were valued using the Black-Scholes Option Pricing Model and the following assumptions:

Assumption:	Pre-modification		Post-modification
Market price per share (weighted average)	$	0.60	$	0.60
Exercise price per share (weighted average)	$	2.51	$	1.50
Risk-free interest rate (weighted average)		0.21%		0.21%
Expected term in years (weighted average)		1.38		1.38
Volatility (weighted average)		80.8%		80.8%
Dividend rate		0.0%		0.0%

Weighted Average Fair Value per share	$	0.03	$	0.07

Other Warrant Modifications

In December 2011, the Company entered into a consulting agreement with a strategic consultant for general and capital markets advisory services. As consideration for the services to be provided under this agreement, the Company modified the term and exercise price of certain previously-issued warrants to purchase an aggregate of 384,184 restricted shares of its common stock. The Company determined that the increase in the fair value of the modified warrants was $397,500, which is reflected in general and administrative expense for the fiscal year ended March 31, 2012 in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The warrants modified were valued using the Black-Scholes Option Pricing Model and using the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share	$	2.99		$	2.99
Exercise price per share	$	2.25 - $3.00		$	1.125 - $1.50
Risk-free interest rate		0.02% - 0.29	%		0.29	%
Expected term in years		0.53 – 2.39			2.39
Volatility		69.4% – 81.0	%		81.0	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.00		$	2.03

In December 2011, the Company also entered into a consulting agreement with an individual for strategic consulting services. As consideration for the services to be provided under this agreement, the Company modified the term and exercise price of certain previously-issued warrants to purchase an aggregate of 23,138 restricted shares of its common stock and will pay the consultant $1,000 per month for the period June 2012 through December 2012. The Company determined that the increase in the fair value of the modified warrants was $13,100, which is reflected in general and administrative expense for the fiscal year ended March 31, 2012 in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The warrants modified were valued using the Black-Scholes Option Pricing Model and using the following assumptions:

Assumption:	Pre-modification			Post-modification
Market price per share	$	3.05		$	$3.05
Exercise price per share	$	1.75 - $2.50		$	$0.88 - $1.25
Risk-free interest rate		0.25% - 0.29	%		0.29	%
Expected term in years		2.00 – 2.36			2.36
Volatility		74.8% – 78.3	%		78.3	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.69		$	2.25

Warrants Outstanding

The following table summarizes outstanding warrants to purchase restricted shares of the Company’s common stock as of March 31, 2013 and 2012. The weighted average exercise price of outstanding warrants at March 31, 2013 and 2012 was $1.26 and $2.16 per share, respectively.

		Shares Subject to Purchase
Exercise	Expiration	March 31,		March 31,
Price	Date	2013		2012
$0.64	3/3/2023		3,000,000		-
$0.88	5/11/2014		15,428		314,328
$1.00	9/15/2017 to 9/30/2017		3,053,573		1,500
$1.125	12/28/2012		-		97,679
$1.25	5/11/2014 to 12/31/2014		120,280		120,280
$1.50	12/31/2012 to 3/14/2018		7,460,816		375,000
$1.75	12/31/2013		349,235		643,184
$2.00	8/3/2013 to 9/15/2017		425,000		609,000
$2.50	5/11/2014		42,443		617,394
$2.625	12/31/2013		68,560		588,200
$2.75	2/28/2017		-		272,724
$3.00	5/11/2015 to 2/13/2016		125,000		430,000
$6.00	6/28/2012 to 12/31/2013		-		57,300
			14,660,335		4,126,589

Reserved Shares

At March 31, 2013, the Company has reserved shares of its common stock for future issuance as follows:


Upon exchange of all shares of Series A Preferred Stock currently issued and outstanding (1)			15,000,000

Warrant shares issuable to Platinum upon exercise of common stock warrant upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement			7,500,000

110% of shares issuable upon conversion of 10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including interest accrued through maturity (2)			9,747,422

Pursuant to warrants to purchase common stock:
Subject to outstanding warrants			14,660,335
Issuable pursuant to accrued interest through maturity on outstanding promissory notes
issued to Morrison & Foerster, Cato Research Ltd., and University Health Network			1,196,427
			15,856,762

Pursuant to stock incentive plans:
Subject to outstanding options under the 2008 and 1999 Stock Incentive Plans			4,912,604
Available for future grants			257,867
			5,170,471

Upon sales of additional Units pursuant to the 2012 Private Placement of Units			15,414,583

Total			68,689,238

(1) assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum
(2) assumes conversion under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum and the terms of the individual notes

Research and Development Expenses	12 Months Ended
Research and Development Expenses	Mar. 31, 2013
Research and Development [Abstract]
Research and Development Expenses	The Company recorded research and development expenses of approximately $3.4 million and $5.4 million in the fiscal years ended March 31, 2013 and 2012, respectively. Research and development expense is composed primarily of employee compensation expenses, including stock–based compensation, and direct project expenses, including costs incurred by third-party research collaborators, some of which may be reimbursed under the terms of grant or collaboration agreements.

The entire disclosure for research, development, and computer software activities, including contracts and arrangements to be performed for others and with federal government. Includes costs 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 whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility and in-process research and development acquired in a business combination consummated during the period.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 1
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-Topic 985
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6501960&loc=d3e128462-111756

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 86
-Paragraph 11, 12
-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 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 2
-Paragraph 12, 13
-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 AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-FGC
-Paragraph 56, 57
-IssueDate 2006-05-01
-Chapter 3
-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 68
-Paragraph 14
-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.

Income Taxes

12 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

The provision for income taxes for the periods presented in the consolidated statements of operations represents minimum California franchise taxes. Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 34% to pretax losses as a result of the following:

	Fiscal Years Ended March 31,
	2013			2012

Computed expected tax benefit		(34.0	%)		(34.0	%)
Losses not benefitted		34.0	%		34.0	%
Other		0.1	%		0.1	%

Income tax expense		0.1	%		0.1	%

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows (in thousands):

	March 31,
	2013			2012
Deferred tax assets:
Net operating loss carryovers	$	19,010		$	16,191
Basis differences in fixed assets		9			13
Accruals and reserves		8			9

Total deferred tax assets		19,027			16,213

Valuation allowance		(19,027	)		(16,213	)

Net deferred tax assets	$	-		$	-

Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $2,814,000 and $2,991,000 during the fiscal years ended March 31, 2013 and 2012, respectively. When realized, deferred tax assets related to employee stock options will be credited to additional paid-in capital.

As of March 31, 2013, the Company had U.S. federal net operating loss carryforwards of $47.9 million, which will expire in fiscal years 2019 through 2033. As of March 31, 2013, the Company had state net operating loss carryforwards of $34.8 million, which will expire in fiscal years 2013 through 2033.

U.S. federal and state tax laws include substantial restrictions on the utilization of net operating loss carryforwards in the event of an ownership change of a corporation. The Company has not performed a change in ownership analysis since its inception in 1998 and accordingly some or all of its net operating loss carryforwards may not be available to offset future taxable income, if any. Even if the loss carryforwards are available they may be subject to substantial annual limitations resulting from past ownership changes, and ownership changes occurring after March 31, 2013, that could result in the expiration of the loss carryforwards before they are utilized.

The Company files income tax returns in the U.S. federal and Canadian jurisdictions and California and Maryland state jurisdictions. The Company is subject to U.S. federal and state income tax examinations by tax authorities for tax years 1999 through 2013 due to net operating losses that are being carried forward for tax purposes.

The Company does not have any uncertain tax positions or unrecognized tax benefits at March 31, 2013 and 2012. The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: 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.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-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 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 8: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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-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.

Licensing and Collaborative Agreements

12 Months Ended

Mar. 31, 2013

Licensing and Collaborative Agreements

University Health Network

On September 17, 2007, the Company and UHN entered into 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 elected to fund additional projects through 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 committed to making monthly payments of $50,000 per month from October 2011 through September 2012 to fund these programs. As disclosed in Note 8, Convertible Notes and Other Notes Payable, in October 2012, the Company issued to UHN a promissory note in the principal amount of $549,500 and a warrant to purchase 549,500 restricted shares of the Company’s common stock as payment in full for services rendered under the fourth amendment. Additionally, the Company and UHN entered into Amendment No. 5 to the SRCA establishing the sponsored research projects and the sponsored research budgets under the SRCA from October 1, 2012 to September 30, 2013, as well as a schedule of the Company’s sponsored research payments for such period totaling $309,000, including payments aggregating $150,000 applicable to services for the period from October 1, 2012 through March 31, 2013.

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 commercial milestones set forth in the License Agreement, and to pay UHN royalties based on the receipt of revenue, if any, by the Company attributable to the licensed patents.

In March 2012, the Company and UHN entered into License Agreement No. 2 under the terms of which UHN granted the Company exclusive rights to the use of technology included in a new U.S. patent application to develop hematopoietic precursor stem cells from human pluripotent stem cells. Hematopoietic precursor stem cells give rise to all red and white blood cells and platelets in the body. The Company plans to use the UHN invention to improve the cell culture methods utilized to efficiently produce hematopoietic stem cell populations. In consideration for the grant of the license, the Company issued to UHN 55,555 restricted shares of its common stock, valued at $155,000 in March 2012 and was obligated to make a cash payment of $25,000 in July 2012. Under the terms of License Agreement No. 2, the Company has also agreed to make payments to UHN totaling $3.9 million, if, and when, it achieves certain milestones designated in License Agreement No. 2, and to pay UHN royalties based on the receipt of revenue, if any, by the Company attributable to the licensed patents.

U.S. National Institutes of Health

From 1998 through 2008, the U.S. National Institutes of Health ("NIH") awarded VistaGen California a total of $11.3 million in non-dilutive research and development grants, including $2.3 million to support research and development of its stem cell technology-based Human Clinical Trials in a Test Tube™ platform and, as described below, a total of $8.8 million for nonclinical and Phase 1 clinical development of AV-101 (also referred to in scientific literature as “4-Cl-KYN”). AV-101, the Company’s small molecule drug candidate, has successfully completed Phase 1 clinical development.

During fiscal years 2006 through 2008, the NIH awarded VistaGen California a $4.2 million grant to support preclinical development of AV-101 for treatment of neuropathic pain and other neurodegenerative diseases such as Huntington’s and Parkinson’s diseases. In April 2009, the NIH awarded VistaGen California 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 $0.2 million and $1.2 million of grant revenue related to AV-101 in the fiscal years ended March 31, 2013 and 2012, respectively.

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, and an affiliate of one of the Company’s largest stockholders. See Note 14, Related Party Transactions. CRL has provided the Company with access to essential CRO services supporting its nonclinical and Phase 1 clinical development programs. The Company recorded research and development expenses of $703,800 and $1,461,300 in the fiscal years ended March 31, 2013 and 2012, respectively, for services provided by CRL. As disclosed in Note 8, Convertible Notes and Other Notes Payable, in October 2012, the Company issued to CRL a promissory note in the initial principal amount of $1,009,000, which is payable solely in restricted shares of the Company’s common stock as payment in full for all contract research and development services and regulatory advice rendered by CRL to the Company and its affiliates through December 31, 2012 with respect to the preclinical and clinical development of AV-101, and a five-year warrant to purchase 1,009,000 restricted shares of the Company’s common stock.

Stock Option Plans and 401(k) Plan

12 Months Ended

Mar. 31, 2013

Text Block [Abstract]

Stock Option Plans and 401(k) Plan

The Company has the following share-based compensation plans.

2008 Stock Incentive Plan

The Company’s 2008 Stock Incentive Plan (the “2008 Plan”) was adopted by the shareholders of VistaGen California on December 19, 2008 and assumed by the Company in connection with the Merger. The maximum number of shares of the Company’s common stock that may be granted pursuant to the 2008 Plan is 5,000,000 shares. The maximum number of shares that may be granted under the 2008 Plan is subject to adjustments for stock splits, stock dividends or other similar changes in the common stock or capital structure.

1999 Stock Incentive Plan

The Company’s 1999 Stock Incentive Plan (the “1999 Plan”) was adopted by the shareholders of VistaGen California on December 6, 1999 and assumed by the Company in connection with the Merger. The Company initially reserved 900,000 shares for the issuance of awards under the 1999 Plan. The 1999 Plan has terminated under its own terms and, as a result, no awards may currently be granted under the 1999 Plan. However, the unexpired options and awards that have already been granted pursuant to the 1999 Plan remain operative.

Scientific Advisory Board 1998 Stock Incentive Plan

The Company’s Scientific Advisory Board 1998 Stock Incentive Plan (the “SAB Plan”) was adopted by VistaGen California’s Board of Directors in July 1998. The VistaGen California Board of Directors authorized 25,000 shares of common stock for awards from the SAB Plan. No awards have been granted from the SAB Plan since August 2001. The SAB Plan expired in July 2008 and all of the options granted from the SAB Plan have either been exercised or expired during fiscal 2012.

Description of the 2008 Plan

Under the terms of the 2008 Plan, the Compensation Committee of the Company’s Board of Directors may grant shares, options or similar rights having either a fixed or variable price related to the fair market value of the shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any other security with the value derived from the value of the shares. Such awards include stock options, restricted stock, restricted stock units, stock appreciation rights and dividend equivalent rights.

The Compensation Committee may grant nonstatutory stock options under the 2008 Plan at a price of not less than 100% of the fair market value of the Company’s common stock on the date the option is granted. Incentive stock options under the 2008 Plan may be granted at a price of not less than 100% of the fair market value of the Company’s common stock on the date the option is granted. Incentive stock options granted to employees who, on the date of grant, own stock representing more than 10% of the voting power of all of the Company’s classes of stock are granted at an exercise price of not less than 110% of the fair market value of the Company’s common stock. The maximum term of these incentive stock options granted to employees who own stock possessing more than 10% of the voting power of all classes of the Company’s stock may not exceed five years. The maximum term of an incentive stock option granted to any other participant may not exceed ten years. The Compensation Committee determines the term and exercise or purchase price of all other awards granted under the 2008 Plan. The Compensation Committee also determines the terms and conditions of awards, including the vesting schedule and any forfeiture provisions. Awards under the 2008 Plan may vest upon the passage of time or upon the attainment of certain performance criteria established by the Compensation Committee.

Unless terminated sooner, the 2008 Plan will automatically terminate in 2017. The Board of Directors may at any time amend, suspend or terminate the Company’s 2008 Plan.

During the first quarter of fiscal 2013, when the quoted market price of the Company’s common stock was $0.51, 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 to certain of its employees, excluding the Company’s Chief Executive Officer and President and Chief Scientific Officer, and to certain scientific consultants. Options granted during the first quarter of fiscal 2013 have a contractual term of 10 years and vest over a period of 4 years. During the third quarter of fiscal 2013, when the quoted market price of the Company’s common stock was $0.71 per share, the Company cancelled outstanding options to purchase an aggregate of 870,550 shares of its common stock at exercise prices between $1.13 per share and $2.58 per share held by certain employees, excluding the Company’s Chief Executive Officer and President and Chief Scientific Officer, and by certain consultants and granted those persons new options to purchase an aggregate of 920,550 shares at an exercise price of $0.75 per share. Options granted during the third quarter of fiscal 2013 have a contractual term of 10 years and options to purchase 604,699 shares were granted as immediately vested, with the remaining option shares vesting over a period of two years. The cancellation and reissuance was accounted for as a modification of the options. During fiscal year 2012, the Company granted options to purchase an aggregate of 1,020,000 shares of its common stock at exercise prices ranging from $1.75 per share to $2.99 per share to certain of its employees and scientific and business consultants, including members of the Company's Board of Directors and Scientific Advisory Board, and one of the Company’s officers exercised options to purchase 113,636 restricted shares of its common stock at an exercise price of $0.88 per share. Including the impact of the modification of the option grants during fiscal 2013 described above, the Company recorded share-based compensation costs related to 2008 Plan option grants of $438,800 for the fiscal year ended March 31, 2013 compared with $1,591,300 for the fiscal year ended March 31, 2012.

The following table summarizes share-based compensation expense, including share-based expense related to the March 2013 grant of warrants to certain of the Company’s officers and to its independent directors as described in Note 9, Capital Stock, included in the accompanying Consolidated Statement of Operations and Comprehensive Loss for the years ended March 31, 2013 and 2012.

	Fiscal Years Ended March 31,
	2013		2012
Research and development expense:
related to stock option grants	$	242,300	$	477,400
related to warrant grants to officers and directors		267,500		-
		509,800		477,400
General and administrative expense:
related to stock option grants		196,600		1,113,900
related to warrant grants to officers and directors		534,900		-
		731,500		1,113,900
Total share-based compensation expense	$	1,241,300	$	1,591,300

The Company used the Black-Scholes option valuation model with the following assumptions to determine share-based compensation expense related to option grants during the fiscal years ended March 31, 2013 and 2012:

	Fiscal Years Ended March 31,
	2013		2012

Exercise price	$0.51 and $0.75		$	1.75 to $2.99
Market price on date of grant	$0.51 and $0.71		$	1.75 to $2.99
Risk-free interest rate	0.895% to 1.74%		1.19% to 3.39%
Expected term (years)	6.25 to 10.0		6.25 to 10.0
Volatility	82.9% to 85.4%		78.9% to 91.3%
Expected dividend yield		0%		0%

Fair value per share at grant date	$	0.36 to $0.59	$	1.08 to $2.48

The expected term of options represents the period that the Company’s share-based compensation awards are expected to be outstanding. The Company has calculated the weighted-average expected term of the options using the simplified method as prescribed by Securities and Exchange Commission Staff Accounting Bulletins No. 107 and No. 110 (“SAB No. 107 and 110”). The utilization of SAB No. 107 and 110 was based on the lack of relevant historical data due to the Company’s limited historical experience as a publicly traded company as well as the lack of liquidity resulting from the limited number of freely-tradable shares of its common stock. Limited historical experience and lack of liquidity in its stock also resulted in the Company’s decision to utilize the historical volatilities of a peer group of public companies’ stock over the expected term of the option in determining its expected volatility assumptions. The risk-free interest rate for periods related to the expected life of the options is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is zero, as the Company has not paid any dividends and does not anticipate paying dividends in the near future. The Company calculated the forfeiture rate based on an analysis of historical data, as it reasonably approximates the currently anticipated rate of forfeitures for granted and outstanding options that have not vested.

The following table summarizes activity for the fiscal years ended March 31, 2013 and 2012 under the Company’s stock option plans:

	Fiscal Years Ended March 31,
	2013					2012
				Weighted					Weighted
				Average					Average
	Number of			Exercise		Number of			Exercise
	Shares			Price		Shares			Price
Options outstanding at beginning of period		4,805,771		$	1.53		3,949,153		$	1.42
Options granted		1,075,550		$	0.72		1,020,000		$	1.88
Options exercised		-		$	-		(113,979	)	$	0.88
Options cancelled		(870,550	)	$	1.72		-		$	-
Options forfeited		(29,167	)	$	1.75		(30,000	)	$	1.75
Options expired		(69,000	)	$	1.34		(19,403	)	$	0.80

Options outstanding at end of period		4,912,604		$	1.32		4,805,771		$	1.53
Options exercisable at end of period		4,227,436		$	1.35		3,740,135		$	1.45
Weighted average grant-date fair value of
options granted during the period				$	0.52				$	1.36

The following table summarizes information on stock options outstanding and exercisable under the Company’s option plans as of March 31, 2013:

		Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
Exercise		Number		Years until		Exercise		Number		Exercise
Price		Outstanding		Expiration		Price		Exercisable		Price
$	0.51 - $0.72		267,540		7.05	$	0.60		112,540	$	0.72
$	0.75		920,550		9.58	$	0.75		670,494	$	0.75
$	0.80 - $1.13		455,776		3.83	$	1.00		455,776	$	1.00
$	1.50		2,413,250		6.68	$	1.50		2,413,250	$	1.50
$	1.65 - $1.925		695,833		5.99	$	1.76		415,721	$	1.74
$	2.10 - $2.99		159,655		5.08	$	2.16		159,655	$	2.16

			4,912,604		6.83	$	1.32		4,227,436	$	1.35

At March 31, 2013, there were 257,867 shares of the Company’s common stock remaining available for grant under the 2008 Plan. There were no option exercises during the year ended March 31, 2013. The Company received cash proceeds of $102,200 as a result of options exercised during the year ended March 31, 2012.

Aggregate intrinsic value is the sum of the amounts by which the fair value of the stock exceeded the exercise price (“in-the-money-options”). Based on the quoted market price of the Company’s common stock of $0.83 per share on March 31, 2013, the aggregate intrinsic value of outstanding options at that date was $165,000, of which $87,300 related to exercisable options.

As of March 31, 2013, there was approximately $743,000 of unrecognized compensation cost related to non-vested share-based compensation awards from the 2008 Plan, which is expected to be recognized through May 2016.

Stock Grants from 2008 Plan

As discussed in Note 8, Convertible Promissory Notes and Other Notes Payable, in April and May 2011, the Company issued an aggregate of 139,600 restricted shares of its common stock from the 2008 Plan to Desjardins and McCarthy as partial compensation for services performed by the two entities. At the date of issuance, the shares were valued at $1.75 per share and the Company recorded $244,300 in general and administrative expense in connection with the issuances.

401(k) Plan

The Company, through a third-party agent, maintains a retirement and deferred savings plan for its employees. This plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Internal Revenue Code. The retirement and deferred savings plan provides that each participant may contribute a portion of his or her pre-tax compensation, subject to statutory limits. Under the plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee. The retirement and deferred savings plan also permits the Company to make discretionary contributions, subject to established limits and a vesting schedule. To date, the Company has not made any discretionary contributions to the retirement and deferred savings plan on behalf of participating employees.

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

Related Party Transactions

12 Months Ended

Mar. 31, 2013

Related Party Transactions

Cato Holding Company (“CHC”), doing business as Cato BioVentures ("CBV"), the parent of CRL, is one of the Company’s largest institutional stockholders at March 31, 2013, holding common stock and warrants to purchase common stock. Prior to the May 11, 2011 conversion of certain of the Company’s outstanding promissory notes and the conversion of preferred stock into shares of common stock, CBV held various promissory notes and a majority of the Company's Series B-1 Preferred Stock. Shawn Singh, the Company’s Chief Executive Officer and member of its Board of Directors, served as Managing Principal of CBV and as an officer of CRL until August 2009. As described in Note 8, Convertible Promissory Notes and Other Notes Payable, in April 2011, CBV loaned the Company $352,273 under the terms of the 2011 CHC Note. On October 10, 2012, the Company and CHC cancelled the 2011 CHC Note and exchanged it for a new unsecured promissory note in the principal amount of $310,443 (the “2012 CHC Note”) and a five-year warrant to purchase 250,000 restricted shares of the Company’s common stock at a price of $1.50 per share (the “CHC Warrant”). Additionally, on October 10, 2012, the Company issued to CRL: (i) an unsecured promissory note in the initial principal amount of $1,009,000, which is payable solely in restricted shares of the Company’s common stock and which accrues interest at the rate of 7.5% per annum, compounded monthly (the “CRL Note”), as payment in full for all contract research and development services and regulatory advice rendered by CRL to the Company and its affiliates through December 31, 2012 with respect to the preclinical and clinical development of AV-101, and (ii) a five-year warrant to purchase, at a price of $1.00 per share, 1,009,000 restricted shares of the Company’s common stock.

During fiscal year 2007, the Company entered into a contract research organization arrangement with CRL related to the development of AV-101, under which the Company incurred expenses of $703,800 and $1,461,300 for the fiscal years ended March 31, 2013 and 2012, respectively, a substantial portion of which were reimbursed under the NIH grant. Total interest expense on notes payable to CHC and CRL was $101,700 and $93,100 for the fiscal years ended March 31, 2013 and 2012, respectively, with the majority of amounts reported for periods prior to May 2011 having been converted to equity. On April 29, 2011, the Company issued 157,143 restricted shares of common stock, valued at $1.75 per share, as prepayment for research and development services to be performed by CRL during 2011. As described in Note 9, Capital Stock, in December 2011, the Company entered into an Agreement Regarding Payment of Invoices and Warrant Exercises with CHC, CRL and the CHC affiliates pursuant to which CHC and the CHC Affiliates exercised warrants at discounted exercise prices to purchase an aggregate of 492,541 restricted shares of the Company’s common stock and the Company received $60,200 cash, and, in lieu of cash payment for certain of the warrant exercises, settled outstanding liabilities of $245,300 for past services received from CRL and prepaid $226,400 for future services to be received from CRL, which services had been fully received by March 31, 2012.

Prior to his April 2003 appointment as one of the Company’s officers (on a part-time basis) and as a director, the Company retained Mr. Singh as a consultant to provide legal and other consulting services. During the course of the consultancy, as payment for his services, the Company issued him warrants to purchase 55,898 restricted shares of common stock at $0.80 per share and a 7% promissory note in the principal amount of $26,400. On May 11, 2011, and concurrent with the Merger, the Company paid the outstanding balance of principal and accrued interest totaling $36,000 (see Note 8, Convertible Promissory Notes and Other Notes Payable). Upon the approval by the Board of Directors, in December 2006, VistaGen California accepted a full-recourse promissory note in the amount of $103,400 from Mr. Singh in payment of the exercise price for options and warrants to purchase an aggregate of 126,389 restricted shares of the Company’s common stock. The note accrued interest at a rate of 4.90% per annum and was due and payable no later than the earlier of (i) December 1, 2016 or (ii) ten days prior to the Company becoming subject to the requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”). On May 11, 2011, in connection with the Merger, the $128,200 outstanding balance of the principal and accrued interest on this note was cancelled in accordance with Mr. Singh's employment agreement and recorded as additional compensation. In accordance with his employment agreement, Mr. Singh is also entitled to an income tax gross-up on the compensation related to the note cancellation. At March 31, 2012 and 2013, the Company had accrued $101,900 as an estimate of the gross-up amount, but had not yet paid that amount to Mr. Singh.

In March 2007, VistaGen California accepted a full recourse promissory note in the amount of $46,400 from A. Franklin Rice, its former Chief Financial Officer and a former director of the Company in exchange for his exercise of options to purchase 52,681 restricted shares of the Company’s common stock. The note accrued interest at a rate of 4.90% per annum and was due and payable no later than the earlier of (i) March 1, 2017 or (ii) ten days prior to the Company becoming subject to the requirements of the Exchange Act. On May 11, 2011, in connection with the Merger, the $57,000 outstanding balance of principal and accrued interest on this note was cancelled in accordance with Mr. Rice's employment agreement and recorded as additional compensation. In accordance with his employment agreement, Mr. Rice is entitled to an income tax gross-up on the compensation related to the note cancellation. At March 31, 2012 and 2013, the Company had accrued $33,900 as an estimate of the gross-up amount, but had not paid it to Mr. Rice.

Prior to the Merger, VistaGen California engaged Jon A. Saxe, a current director, separately from his duties as a director, as a management consultant from July 1, 2000 through June 30, 2010 to provide strategic and other business advisory services. As payment for consulting services rendered through June 30, 2010, Mr. Saxe has been issued warrants and non-qualified options to purchase an aggregate of 250,815 restricted shares of the Company’s common stock, of which he has exercised warrants to purchase 18,568 restricted shares. Additionally, Mr. Saxe was issued a 7% promissory note in the amount of $8,000. On May 11, 2011, the $14,400 balance of the note and related accrued interest plus a note cancellation premium of $5,100 was converted to 11,142 restricted shares of the Company’s common stock and a three-year warrant to purchase 2,784 restricted shares of common stock at an exercise price of $2.50 per share. In lieu of payment from the Company, in December 2011, Mr. Saxe exercised the warrant as a part of the Discounted Warrant Exercise Program at an exercise price of $1.25 per share in satisfaction of amounts owed to him in conjunction with his service as a member of the Board of Directors.

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.

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.

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies, Guarantees and Indemnifications

12 Months Ended

Mar. 31, 2013

Commitments, Contingencies, Guarantees and Indemnifications

From time to time, the Company may become involved in claims and other legal matters arising in the ordinary course of business. Management is not currently aware of any matters that will have a material adverse effect on the Company’s consolidated financial position, results of operations or its cash flows.

The Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The Company will indemnify the officers or directors against any and all expenses incurred by the officers or directors because of their status as one of the Company’s directors or executive officers to the fullest extent permitted by California law. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company has a director and officer insurance policy which limits the Company's exposure and may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, there are no liabilities recorded for these agreements at March 31, 2013 or 2012.

In the normal course of business, the Company provides indemnifications of varying scopes under agreements with other companies, typically clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, the Company generally indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified parties in connection with the use or testing of the Company's product candidates or with any U.S. patents or any copyright or other intellectual property infringement claims by any third party with respect to the Company's product candidates. The terms of these indemnification agreements are generally perpetual. The potential future payments the Company could be required to make under these indemnification agreements is unlimited. The Company maintains liability insurance coverage that limits its exposure. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of March 31, 2013 or 2012.

Leases

As of March 31, 2013 and 2012, the following assets are under capital lease obligations and included in property and equipment:

	March 31,
	2013			2012

Leased laboratory and computer equipment	$	133,200		$	139,700
Accumulated amortization		(114,900	)		(119,200	)

	$	18,300		$	20,500

Amortization expense for assets recorded under capital leases is included in depreciation expense. Future minimum payments, by year and in the aggregate, required under capital leases are as follows:

	Equipment
Fiscal Years Ending March 31,	Capital Leases

2014	$	8,600
2015		4,300
2016		1,200
2017		1,200
2018		100
Future minimum lease payments		15,400

Less imputed interest included in minimum lease payments		(1,700	)

Present value of minimum lease payments		13,700

Less current portion		(7,600	)

Non-current capital lease obligation	$	6,100

At March 31, 2013, future minimum payments under operating leases relate to the Company’s facility lease in South San Francisco, California through June 30, 2013 and total $45,000 for the fiscal year ended March 31, 2014. See Note 16, Subsequent Events. Total facility rent expense incurred by the Company for the fiscal years ended March 31, 2013 and 2012 was $179,000 and $166,000, respectively.

Long-Term Debt Repayment

At March 31, 2013, future minimum principal payments related to long-term debt were as follows:

Fiscal Years Ending March 31,	Amount
2014	$	684,200
2015		609,800
2016		541,700
2017		185,800
2018		18,000
Thereafter through October 2023		71,600

	$	2,111,100

Subsequent Events

12 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Subsequent Events

The Company has evaluated subsequent events through July 16, 2013 and has identified the following material events and transactions that occurred after March 31, 2013.

Autilion AG Securities Purchase Agreement

On April 8, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Autilion AG, a company organized and existing under the laws of Switzerland (“Autilion”). On April 12, 2013, Autilion assigned the Purchase Agreement to its affiliate, Bergamo Acquisition Corp. PTE LTD, a corporation organized and existing under the laws of Singapore (“Bergamo Singapore”). On April 30, 2013, the Company and Bergamo Singapore amended the Purchase Agreement (“Amendment No. 1”) to modify the investment dates. On June 27, 2013, the Company, Autilion and Bergamo Singapore further amended the Agreement to vacate Autilion’s April 2013 assignment of the Purchase Agreement to Bergamo Singapore, provide for an initial closing under the Purchase Agreement, and amend certain of the investment dates under the Purchase Agreement (“Amendment No. 2”, and together with the Agreement and Amendment No. 1, the “Amended Agreement”). Under the terms of the Amended Agreement, Autilion is contractually obligated to purchase an aggregate of 72.0 million restricted shares of the Company’s common stock at a purchase price of $0.50 per share for aggregate cash consideration of $36.0 million, in a series of tranches between June 27, 2013 and September 30, 2013 (cumulatively, the “Autilion Financing”). The Amended Agreement also provides for the election to the Company’s Board of Directors of a designee of Autilion upon completion of the Autilion Financing. The Company has completed a nominal initial closing of the Autilion Financing.

The Company and Autilion entered into a Voting Agreement, pursuant to which Autilion has agreed to vote all shares of capital stock of the Company held by Autilion consistent with the recommendation of a majority of the members of the Company’s Board of Directors. In addition, in the event of a Change in Control of the Company, as defined in the Voting Agreement, or an extraordinary transaction outside of the ordinary course of the Company’s business, in each case approved by a majority of the Company’s Board of Directors, including Autilion's designee, as well as by the holders of a majority of the outstanding shares of Common Stock held by stockholders unaffiliated with Autilion (an “Approved Transaction”), Autilion is required to vote all shares of capital stock of the Company held by it for such Approved Transaction.

Modification of Warrants held by Platinum

Effective on May 24, 2013, the Company and Platinum entered into an Amendment and Waiver pursuant to which the Company agreed to reduce the exercise price of the Exchange Warrant and the Investment Warrants issued to Platinum in October 2012 and February 2013 and March 2013 (collectively, the “Warrants”) from $1.50 per share to $0.50 per share in consideration for Platinum’s agreement to waive its rights for any increase in the number of shares of common stock issuable under the adjustment provisions of the Exchange Warrant and the Investment Warrants that would otherwise occur from (i) the Company’s sale of shares of its common stock at a price of $0.50 per share in connection with the Bergamo Financing; (ii) the March 2013 grant of warrants to certain of the Company’s officers and independent directors to purchase an aggregate of 3.0 million restricted shares of common stock at an exercise price of $0.64 per share; and (iii) the Company’s issuance of restricted shares of its common stock resulting in gross proceeds not to exceed $1.5 million in connection with the exercise by warrant holders, by no later than June 30, 2013, of previously outstanding warrants for which the Company may reduce the exercise price to not less than $0.50 per share.

Facility Lease

On April 24, 2013, the Company entered into a four-year facility lease for approximately 10,900 square feet of laboratory and headquarters office space in South San Francisco, California beginning July 1, 2013. Future minimum payments under the lease are as follows:

Fiscal Years Ending March 31,	Amount
2014	$	121,100
2015	$	252,000
2016	$	265,100
2017	$	278,200
2018	$	70,400

Warrant Modifications

During June and July 2013, the Company offered certain warrant holders the opportunity to exercise their warrants to purchase restricted shares of the Company’s common stock at an exercise price reduced from $1.50 per share to $0.50 per share. Through the date of this report, warrant holders exercised warrants to purchase an aggregate of 399,106 restricted shares of the Company’s common stock and the Company received cash proceeds of $191,200 and settled accounts payable for professional services in the amount of $8,300 in lieu of cash payment by the Company.

Supplemental Financial Information

12 Months Ended

Mar. 31, 2013

Supplemental Financial Information

Quarterly Results of Operations (Unaudited)

The following table presents the unaudited statements of operations data for each of the eight quarters in the period ended March 31, 2013. This information represents the activity of VistaGen California for the pre-Merger portion of the first quarter of fiscal 2012 and the consolidated activity of VistaGen California and the Company from May 11, 2011 (the date of the Merger) through March 31, 2013. A total of 1,569,000 shares of common stock, representing the 784,500 shares held by stockholders of Excaliber immediately prior to the Merger and effected for the post-Merger two-for-one (2:1) stock split described in Note 1, Description of Business, have been retroactively reflected as outstanding for the entire fiscal year ended March 31, 2012 for purposes of determining basic and diluted loss per common share below.

The information has been presented on the same basis as the audited financial statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts below to present fairly the unaudited quarterly results when read in conjunction with the audited financial statements and related notes. The operating results for any quarter should not be relied upon as necessarily indicative of results for any future period.

Unaudited Quarterly Results of Operations

(in thousands, except share and per share amounts)

	Three Months Ended
	June 30, 2012			September 30, 2012			December 31, 2012			March 31, 2013			Total Fiscal Year 2013

Revenues:
Grant revenue	$	200		$	—		$	—		$	—		$	200
Total revenues		200			—			—			—			200
Operating expenses:
Research and development		866			1,106			1,120			339			3,431
General and administrative		1,055			576			799			1,132			3,562
Total operating expenses		1,921			1,682			1,919			1,471			6,993
Loss from operations		(1,721	)		(1,682	)		(1,919	)		(1,471	)		(6,793	)
Other expenses, net:
Interest expense, net		(103	)		(274	)		(235	)		(309	)		(921	)
Change in put and note extension option and warrant liabilities		—			—			358			(1,994	)		(1,636	)
Loss on early extinguishment of debt		—			—			(3,537	)		(31	)		(3,568	)
Other income		—			—			-			35			35
Loss before income taxes		(1,824	)		(1,956	)		(5,333	)		(3,770	)		(12,883	)
Income taxes		(2	)		—			(2	)		—			(4	)
Net loss		(1,826	)		(1,956	)		(5,335	)		(3,770	)		(12,887	)
Deemed dividend on Series A Preferred Stock		-						(10,193	)					(10,193	)
Net loss attributable to common stockholders	$	(1,826	)	$	(1,956	)	$	(15,528	)	$	(3,770	)	$	(23,080	)
Basic and diluted net loss per common share	$	(0.11	)	$	(0.11	)	$	(0.85	)	$	(0.19	)	$	(1.27	)
Weighted average shares used in computing basic and diluted net loss per common share		16,842,655			17,094,833			18,292,301			20,236,491			18,108,444

Note: reflects adjustment to amount of deemed dividend on Series A Preferred Stock in the quarter ended December 31, 2012.

	Three Months Ended
	June 30, 2011			September 30, 2011			December 31, 2011			March 31, 2012			Total Fiscal Year 2012

Revenues:
Grant revenue	$	555		$	316		$	2		$	469		$	1,342
Total revenues		555			316			2			469			1,342
Operating expenses:
Research and development		1,028			(1,227	)		1,306			1,828			5,389
General and administrative		1,127			894			1,548			1,428			4,997
Total operating expenses		2,155			2,121			2,854			3,256			10,386
Loss from operations		(1,600	)		(1,805	)		(2,852	)		(2,787	)		(9,044	)
Other expenses, net:
Interest expense, net		(731	)		(451	)		(455	)		(256	)		(1,893	)
Change in put and note extension option and warrant liabilities		(78	)		—			—			—			(78	)
Loss on early extinguishment of debt		-			—			(1,193	)		—			(1,193	)
Loss before income taxes		(2,409	)		(2,256	)		(4,500	)		(3,043	)		(12,208	)
Income taxes		(2	)		—			—			—			(2	)
Net loss	$	(2,411	)	$	(2,256	)	$	(4,500	)	$	(3,043	)	$	(12,210	)
Basic and diluted net loss per common share	$	-0.22		$	-0.15		$	-0.28		$	-0.18		$	-0.83
Weighted average shares used in computing basic and diluted net loss per common share		11,105,854			15,241,904			16,035,861			16,542,717			14,736,651

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Mar. 31, 2013

Summary Of Significant Accounting Policies Policies

Basis of Presentation and Going Concern

Use of Estimates

Use of Estimates

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the Company’s accounts, and the accounts of VistaGen California’s wholly-owned inactive subsidiaries, Artemis, and VistaStem Canada.

Change in Authorized Number of Shares

Change in Authorized Number of Shares

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents are considered to be highly liquid investments with maturities of three months or less at the date of purchase.

Property and Equipment

Property and Equipment

Impairment or Disposal of Long-Lived Assets

Impairment or Disposal of Long-Lived Assets

Revenue Recognition

Revenue Recognition

•

Research and Development Expenses

Research and Development Expenses

Share-Based Compensation

Income Taxes

Income Taxes

Concentrations of Credit Risk

Concentrations of Credit Risk

Comprehensive Loss

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 its net loss for the periods presented.

Loss per Common Share

Loss per Common Share

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

	March 31,
	2013		2012

Series A preferred stock issued and outstanding (1)		15,000,000		4,370,550
Common stock warants issuable to Platinum upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement		7,500,000		-
Outstanding options under the 2008 and 1999 Stock Incentive Plans		4,912,604		4,805,771
Outstanding warrants to purchase common stock		14,660,335		4,126,589
10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including accrued interest through March 31, 2013 (2)		6,775,682		-

Total		48,848,621		13,302,910

(1) at March 31, 2013, assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum

(2) assumes conversion under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum and the terms of the individual notes

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Mar. 31, 2013

Summary Of Significant Accounting Policies Tables

Earning Per Share

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

	March 31,
	2013		2012

Series A preferred stock issued and outstanding (1)		15,000,000		4,370,550
Common stock warants issuable to Platinum upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement		7,500,000		-
Outstanding options under the 2008 and 1999 Stock Incentive Plans		4,912,604		4,805,771
Outstanding warrants to purchase common stock		14,660,335		4,126,589
10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including accrued interest through March 31, 2013 (2)		6,775,682		-

Total		48,848,621		13,302,910

(1) at March 31, 2013, assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum

(2) assumes conversion under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum and the terms of the individual notes

Fair Value Measurements (Tables)

12 Months Ended

Mar. 31, 2013

Fair Value Measurements Tables

Fair value heirarchy for liabilities measured at fair value on a recurring basis

The fair value hierarchy for liabilities measured at fair value on a recurring basis is as follows:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
	Total		Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2013:
Warrant liability	$	6,394,000	$	-	$	-	$	6,394,000
March 31, 2012:
Put option and note term extension option liabilities	$	-	$	-	$	-	$	-
Warrant liability	$	-	$	-	$	-	$	-

Changes in Level 3 liabilities

The changes in Level 3 liabilities measured at fair value on a recurring basis are as follows:

		Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
		Put Option and
		Note Term Extension			Warrant
		Liabilities			Liability			Total
Balance at March 31, 2011		$	90,800		$	417,100		$	507,900

Mark to market loss included in net loss			71,000			7,000			78,000
Reclassification of liability to note discount on Original Platinum Notes upon Merger			(161,800	)		-			(161,800	)
Reclassification of remaining warrant liability to equity upon Merger			-			(424,100	)		(424,100	)

Balance at March 31, 2012		$	-		$	-		$	-

Recognition of warrant liability upon issuance of Exchange and Investment Warrants
to Platinum under October 2012 Agreement			-			1,690,000			1,690,000
Recognition of warrant liability in connection with Series A Exchange Warrant
potentially issuable to Platinum under October 2012 Agreement			-			3,068,200			3,068,200
Mark to market loss included in net loss			-			1,635,800			1,635,800

Balance at March 31, 2013		$	-		$	6,394,000		$	6,394,000

Property and Equipment (Tables)

12 Months Ended

Mar. 31, 2013

Property, Plant and Equipment [Abstract]

Property and equipment

Property and equipment consists of the following:

	March 31,
	2013			2012

Laboratory equipment	$	649,500		$	515,800
Computers and network equipment		12,900			12,900
Office furniture and equipment		69,600			75,600
		732,000			604,300

Accumulated depreciation and amortization		(551,300	)		(529,800	)

Property and equipment, net	$	180,700		$	74,500

Accrued Expenses (Tables)

12 Months Ended

Mar. 31, 2013

Accrued Expenses Tables

Accrued Expenses

Accrued expenses consist of:

	March 31,		March 31,
	2013		2012

Accrued professional services	$	67,800	$	107,400
Accrued research and development expenses		-		237,500
Accrued vacation pay and other compensation		219,300		229,900
Accrued placement agent fees		-		50,000
Accrued royalties and license fees		25,000		5,000
All other		30,800		27,500

	$	342,900	$	657,300

Convertible Promissory Notes and Other Notes Payable (Tables)

12 Months Ended

Mar. 31, 2013

Convertible Promissory Notes And Other Notes Payable Tables

Convertible Promissory Notes and Other Notes Payable

The following table summarizes the components of the Company’s convertible promissory notes and other notes payable:

	March 31, 2013									March 31, 2012
	Principal			Accrued						Principal			Accrued
	Balance			Interest			Total			Balance			Interest			Total
*Senior Secured 10% Convertible Promissory Notes*
*issued to Platinum:*
Exchange Note issued on October 11, 2012	$	1,272,600		$	61,700		$	1,334,300		$	-		$	-		$	-
Investment Note issued on October 11, 2012		500,000			24,200			524,200			-			-			-
Investment Note issued on October 19, 2012		500,000			23,000			523,000			-			-			-
Investment Note issued on February 22, 2013		250,000			2,600			252,600			-			-			-
Investment Note issued on March 12, 2013		750,000			4,700			754,700			-			-			-
		3,272,600			116,200			3,388,800			-			-			-
Aggregate note discount		(1,963,100	)		-			(1,963,100	)		-			-			-
Total Senior notes (non-current)	$	1,309,500		$	116,200		$	1,425,700		$	-		$	-		$	-

*Convertible Promissory Notes:*
February 2012 12% convertible promissory notes	$	-		$	-		$	-		$	500,000		$	5,300		$	505,300
Note discount		-			-			-			(499,300	)		-			(499,300	)
Total 12% convertible notes, net (non-current)	$	-		$	-		$	-		$	700		$	5,300		$	6,000

*Notes Payable to unrelated parties:*
7.0% Notes payable (April 2011)	$	-		$	-		$	-		$	63,800		$	400		$	64,200
7.0% Notes payable (August 2012)		59,400			-			59,400			-			-			-
		59,400		$	-		$	59,400			63,800		$	400		$	64,200
less: current portion		(8,100	)		-			(8,100	)		(63,800	)		(400	)		(64,200	)
7.0% Notes payable - non-current portion	$	51,300		$	-		$	51,300		$	-		$	-		$	-

7.5% Notes payable to service providers for
accounts payable converted to notes payable:
Burr, Pilger, Mayer	$	90,400		$	-		$	90,400		$	93,400		$	1,100		$	94,500
Desjardins		194,100			800			194,900			224,300			2,800			227,100
McCarthy Tetrault		403,100			1,700			404,800			459,400			5,700			465,100
May 2011 Morrison Foerster		-			-			-			2,420,100			37,900			2,458,000
August 2012 Morrison & Foerster Note A		937,400			-			937,400			-			-			-
August 2012 Morrison & Foerster Note B, payable solely in restricted shares of the Company's common stock (1)		1,379,400			60,100			1,439,500			-			-			-
University Health Network, payable solely in restricted shares of the Company's common stock (1)		549,500			19,400			568,900			-			-			-
		3,553,900			82,000			3,635,900			3,197,200			47,500			3,244,700
Note discount		(1,142,600	)		-			(1,142,600	)		(228,900	)		-			(228,900	)
		2,411,300			82,000			2,493,300			2,968,300			47,500			3,015,800
less: current portion		(450,300	)		(2,500	)		(452,800	)		(367,700	)		-			(367,700	)
non-current portion and discount	$	1,961,000		$	79,500		$	2,040,500		$	2,600,600		$	47,500		$	2,648,100

5.8% and 8% Notes payable to insurance
premium financing company (current)	$	4,200		$	-		$	4,200		$	4,600		$	-		$	4,600

10% Notes payable to vendors for accounts
payable converted to notes payable	$	128,800		$	23,300		$	152,100		$	165,400		$	16,800		$	182,200
less: current portion		(128,800	)		(23,300	)		(152,100	)		(146,000	)		-			(146,000	)
non-current portion	$	-		$	-		$	-		$	19,400		$	16,800		$	36,200

Total notes payable to unrelated parties	$	2,603,700		$	105,300		$	2,709,000		$	3,202,100		$	64,700		$	3,266,800
less: current portion		(591,400	)		(25,800	)		(617,200	)		(582,100	)		(400	)		(582,500	)
non-current portion and discount	$	2,012,300		$	79,500		$	2,091,800		$	2,620,000		$	64,300		$	2,684,300

*Notes payable to related parties:*
April 2011 7 % Note to Cato Holding Co.	$	-		$	-		$	-		$	293,300		$	6,900		$	300,200
October 2012 7.5% Note to Cato Holding Co.		293,600			7,400			301,000			-			-			-
October 2012 7.5% Note to Cato Research Ltd., payable solely in restricted shares of the Company's common stock (1)		1,009,000			36,200			1,045,200			-			-			-
		1,302,600			43,600			1,346,200			293,300			6,900			300,200
Note discount		(147,200	)		-			(147,200	)		(24,300	)		-			(24,300	)
Total notes payable to related parties		1,155,400			43,600			1,199,000			269,000			6,900			275,900
less: current portion		(85,600	)		(7,400	)		(93,000	)		(168,200	)		-			(168,200	)
non-current portion and discount	$	1,069,800		$	36,200		$	1,106,000		$	100,800		$	6,900		$	107,700

(1) See description of debt restructuring in Note 8.

Exchange Warrant and Investment Warrants

	Exchange			Investment Warrants Issued on:
	Warrant			10/11/2012			10/19/2012			2/22/2013			3/12/2013

Market price of common stock	$	0.75		$	0.75		$	0.75		$	0.60		$	0.80
Exercise price	$	1.50		$	1.50		$	1.50		$	1.50		$	1.50
Risk-free interest rate		0.67	%		0.67	%		0.67	%		0.84	%		0.88	%
Volatility		85.0	%		85.0	%		85.0	%		85.0	%		85.0	%
Term (years)		5.0			5.0			5.0			5.0			5.0
Dividend rate		0	%		0	%		0	%		0	%		0	%

Fair value per share	$	0.53		$	0.53		$	0.53		$	0.39		$	0.52
Number of shares		1,272,577			500,000			500,000			250,000			750,000
Fair value at date of issuance	$	672,000		$	264,000		$	264,000		$	97,000		$	393,000

Components of note discount and effective interest rate

	Inception Date Carrying Value of
	Exchange			Investment Notes Issued on:
	Note			10/11/2012			10/19/2012			2/22/2013			3/12/2013

Face value	$	1,272,600		$	500,000		$	500,000		$	250,000		$	750,000
Discount attributable to:
Fair value of warrant		-			(264,000	)		(264,000	)		(97,000	)		(393,000	)
Beneficial conversion feature		-			(231,000	)		(231,000	)		(147,000	)		(349,500	)

Inception date carrying value	$	1,272,600		$	5,000		$	5,000		$	6,000		$	7,500

Effective Interest Rate		10.00	%		159.05	%		159.05	%		127.27	%		159.05	%

Amended M&F Warrant

Assumption:	Pre-modification			Post-modification
Market price per share	$	0.94		$	0.94
Exercise price per share	$	2.00		$	2.00
Risk-free interest rate		0.25	%		0.60	%
Expected term in years		2.33			5.04
Volatility		77.9	%		88.8	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	0.24		$	0.52

Capital Stock (Tables)

12 Months Ended

Mar. 31, 2013

Capital Stock Tables

Black-Scholes Option Pricing Model

Assumption:	Pre-modification			Post-modification
Market price per share	$	2.60		$	2.60
Exercise price per share	$	1.50 - $2.625		$	0.75 - $1.31
Risk-free interest rate		0.18% - 0.45	%		0.02	%
Expected term in years		0.90 – 3.25			0.25
Volatility		65.7% - 82.8	%		41.1	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.30		$	1.50

Black-Scholes Option Pricing Model on Modifications

Assumption:	Pre-modification		Post-modification
Market price per share (weighted average)	$	1.95	$	1.95
Exercise price per share (weighted average)	$	2.75	$	0.50
Risk-free interest rate (weighted average)		0.29%		0.06%
Expected term in years (weighted average)		1.93		0.12
Volatility (weighted average)		78.0%		85.7%
Dividend rate		0.0%		0.0%

Weighted Average Fair Value per share	$	0.64	$	1.45

Black-Scholes Option Pricing Model on Assumptions

Assumption:	Pre-modification		Post-modification
Market price per share (weighted average)	$	0.60	$	0.60
Exercise price per share (weighted average)	$	2.51	$	1.50
Risk-free interest rate (weighted average)		0.21%		0.21%
Expected term in years (weighted average)		1.38		1.38
Volatility (weighted average)		80.8%		80.8%
Dividend rate		0.0%		0.0%

Weighted Average Fair Value per share	$	0.03	$	0.07

Other Warrant Modifications assumptions

Assumption:	Pre-modification			Post-modification
Market price per share	$	2.99		$	2.99
Exercise price per share	$	2.25 - $3.00		$	1.125 - $1.50
Risk-free interest rate		0.02% - 0.29	%		0.29	%
Expected term in years		0.53 – 2.39			2.39
Volatility		69.4% – 81.0	%		81.0	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.00		$	2.03

Black-Scholes Other Warrant Modifications Option Pricing Model on Assumptions

Assumption:	Pre-modification			Post-modification
Market price per share	$	3.05		$	$3.05
Exercise price per share	$	1.75 - $2.50		$	$0.88 - $1.25
Risk-free interest rate		0.25% - 0.29	%		0.29	%
Expected term in years		2.00 – 2.36			2.36
Volatility		74.8% – 78.3	%		78.3	%
Dividend rate		0.0	%		0.0	%

Weighted Average Fair Value per share	$	1.69		$	2.25

Warrants outstanding

Warrants Outstanding

		Shares Subject to Purchase
Exercise	Expiration	March 31,		March 31,
Price	Date	2013		2012
$0.64	3/3/2023		3,000,000		-
$0.88	5/11/2014		15,428		314,328
$1.00	9/15/2017 to 9/30/2017		3,053,573		1,500
$1.125	12/28/2012		-		97,679
$1.25	5/11/2014 to 12/31/2014		120,280		120,280
$1.50	12/31/2012 to 3/14/2018		7,460,816		375,000
$1.75	12/31/2013		349,235		643,184
$2.00	8/3/2013 to 9/15/2017		425,000		609,000
$2.50	5/11/2014		42,443		617,394
$2.625	12/31/2013		68,560		588,200
$2.75	2/28/2017		-		272,724
$3.00	5/11/2015 to 2/13/2016		125,000		430,000
$6.00	6/28/2012 to 12/31/2013		-		57,300
			14,660,335		4,126,589

Reserved Shares

Reserved Shares

At March 31, 2013, the Company has reserved shares of its common stock for future issuance as follows:


Upon exchange of all shares of Series A Preferred Stock currently issued and outstanding (1)			15,000,000

Warrant shares issuable to Platinum upon exercise of common stock warrant upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement			7,500,000

110% of shares issuable upon conversion of 10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including interest accrued through maturity (2)			9,747,422

Pursuant to warrants to purchase common stock:
Subject to outstanding warrants			14,660,335
Issuable pursuant to accrued interest through maturity on outstanding promissory notes
issued to Morrison & Foerster, Cato Research Ltd., and University Health Network			1,196,427
			15,856,762

Pursuant to stock incentive plans:
Subject to outstanding options under the 2008 and 1999 Stock Incentive Plans			4,912,604
Available for future grants			257,867
			5,170,471

Upon sales of additional Units pursuant to the 2012 Private Placement of Units			15,414,583

Total			68,689,238

(1) assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum
(2) assumes conversion under the terms of the October 11, 2012 Note Exchange and Purchase Agreement with Platinum and the terms of the individual notes

Tabular disclosure of temporary equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

Provision/benefit computed for income taxes

Income Taxes (Tables)

12 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

	Fiscal Years Ended March 31,
	2013			2012

Computed expected tax benefit		(34.0	%)		(34.0	%)
Losses not benefitted		34.0	%		34.0	%
Other		0.1	%		0.1	%

Income tax expense		0.1	%		0.1	%

Components of deferred tax assets

	March 31,
	2013			2012
Deferred tax assets:
Net operating loss carryovers	$	19,010		$	16,191
Basis differences in fixed assets		9			13
Accruals and reserves		8			9

Total deferred tax assets		19,027			16,213

Valuation allowance		(19,027	)		(16,213	)

Net deferred tax assets	$	-		$	-

Stock Option Plans and 401(k) Plan (Tables)

12 Months Ended

Mar. 31, 2013

Text Block [Abstract]

Share-based compensation expense

	Fiscal Years Ended March 31,
	2013		2012
Research and development expense:
related to stock option grants	$	242,300	$	477,400
related to warrant grants to officers and directors		267,500		-
		509,800		477,400
General and administrative expense:
related to stock option grants		196,600		1,113,900
related to warrant grants to officers and directors		534,900		-
		731,500		1,113,900
Total share-based compensation expense	$	1,241,300	$	1,591,300

Black-Scholes option valuation model assumptions for share-based compensation expense

	Fiscal Years Ended March 31,
	2013		2012

Exercise price	$0.51 and $0.75		$	1.75 to $2.99
Market price on date of grant	$0.51 and $0.71		$	1.75 to $2.99
Risk-free interest rate	0.895% to 1.74%		1.19% to 3.39%
Expected term (years)	6.25 to 10.0		6.25 to 10.0
Volatility	82.9% to 85.4%		78.9% to 91.3%
Expected dividend yield		0%		0%

Fair value per share at grant date	$	0.36 to $0.59	$	1.08 to $2.48

Summary of stock option plan activity

	Fiscal Years Ended March 31,
	2013					2012
				Weighted					Weighted
				Average					Average
	Number of			Exercise		Number of			Exercise
	Shares			Price		Shares			Price
Options outstanding at beginning of period		4,805,771		$	1.53		3,949,153		$	1.42
Options granted		1,075,550		$	0.72		1,020,000		$	1.88
Options exercised		-		$	-		(113,979	)	$	0.88
Options cancelled		(870,550	)	$	1.72		-		$	-
Options forfeited		(29,167	)	$	1.75		(30,000	)	$	1.75
Options expired		(69,000	)	$	1.34		(19,403	)	$	0.80

Options outstanding at end of period		4,912,604		$	1.32		4,805,771		$	1.53
Options exercisable at end of period		4,227,436		$	1.35		3,740,135		$	1.45
Weighted average grant-date fair value of
options granted during the period				$	0.52				$	1.36

Stock options outstanding and exercisable under Company's option plan

		Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
Exercise		Number		Years until		Exercise		Number		Exercise
Price		Outstanding		Expiration		Price		Exercisable		Price
$	0.51 - $0.72		267,540		7.05	$	0.60		112,540	$	0.72
$	0.75		920,550		9.58	$	0.75		670,494	$	0.75
$	0.80 - $1.13		455,776		3.83	$	1.00		455,776	$	1.00
$	1.50		2,413,250		6.68	$	1.50		2,413,250	$	1.50
$	1.65 - $1.925		695,833		5.99	$	1.76		415,721	$	1.74
$	2.10 - $2.99		159,655		5.08	$	2.16		159,655	$	2.16

			4,912,604		6.83	$	1.32		4,227,436	$	1.35

Commitments, Contingencies, Guarantees and Indemnifications (Tables)

12 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Assets under capital lease obligations

As of March 31, 2013 and 2012, the following assets are under capital lease obligations and included in property and equipment:

	March 31,
	2013			2012

Leased laboratory and computer equipment	$	133,200		$	139,700
Accumulated amortization		(114,900	)		(119,200	)

	$	18,300		$	20,500

Future minimum payments required under Capital Leases

Amortization expense for assets recorded under capital leases is included in depreciation expense. Future minimum payments, by year and in the aggregate, required under capital leases are as follows:

	Equipment
Fiscal Years Ending March 31,	Capital Leases

2014	$	8,600
2015		4,300
2016		1,200
2017		1,200
2018		100
Future minimum lease payments		15,400

Less imputed interest included in minimum lease payments		(1,700	)

Present value of minimum lease payments		13,700

Less current portion		(7,600	)

Non-current capital lease obligation	$	6,100

Future minimum principal payments related to Long-Term Debt

Long-Term Debt Repayment

At March 31, 2013, future minimum principal payments related to long-term debt were as follows:

Fiscal Years Ending March 31,	Amount
2014	$	684,200
2015		609,800
2016		541,700
2017		185,800
2018		18,000
Thereafter through October 2023		71,600

	$	2,111,100

Subsequent Events (Tables)

12 Months Ended

Mar. 31, 2013

Subsequent Events Tables

Facility lease future minimum payments

Fiscal Years Ending March 31,	Amount
2014	$	121,100
2015	$	252,000
2016	$	265,100
2017	$	278,200
2018	$	70,400

Supplemental Financial Information (Tables)

12 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Unaudited Quarterly Results of Operations

Unaudited Quarterly Results of Operations

(in thousands, except share and per share amounts)

	Three Months Ended
	June 30, 2012			September 30, 2012			December 31, 2012			March 31, 2013			Total Fiscal Year, 2013

Revenues:
Grant revenue	$	200		$	—		$	—		$	—		$	200
Total revenues		200			—			—			—			200
Operating expenses:
Research and development		866			1,106			1,120			339			3,431
General and administrative		1,055			576			799			1,132			3,562
Total operating expenses		1,921			1,682			1,919			1,471			6,993
Loss from operations		(1,721	)		(1,682	)		(1,919	)		(1,471	)		(6,793	)
Other expenses, net:
Interest expense, net		(103	)		(274	)		(235	)		(309	)		(921	)
Change in put and note extension option and warrant liabilities		—			—			358			(1,994	)		(1,636	)
Loss on early extinguishment of debt		—			—			(3,537	)		(31	)		(3,568	)
Other income		—			—			-			35			35
Loss before income taxes		(1,824	)		(1,956	)		(5,333	)		(3,770	)		(12,883	)
Income taxes		(2	)		—			(2	)		—			(4	)
Net loss		(1,826	)		(1,956	)		(5,335	)		(3,770	)		(12,887	)
Deemed dividend on Series A Preferred Stock		-						(10,193	)					(10,193	)
Net loss attributable to common stockholders	$	(1,826	)	$	(1,956	)	$	(15,528	)	$	(3,770	)	$	(23,080	)
Basic and diluted net loss per common share	$	(0.11	)	$	(0.11	)	$	(0.85	)	$	(0.19	)	$	(1.27	)
Weighted average shares used in computing basic and diluted net loss per common share		16,842,655			17,094,833			18,292,301			20,236,491			18,108,444

Note: reflects adjustment to amount of deemed dividend on Series A Preferred Stock in the quarter ended December 31, 2012.

	Three Months Ended
	June 30, 2011			September 30, 2011			December 31, 2011			March 31, 2012			Total Fiscal Year, 2012

Revenues:
Grant revenue	$	555		$	316		$	2		$	469		$	1,342
Total revenues		555			316			2			469			1,342
Operating expenses:
Research and development		1,028			(1,227	)		1,306			1,828			5,389
General and administrative		1,127			894			1,548			1,428			4,997
Total operating expenses		2,155			2,121			2,854			3,256			10,386
Loss from operations		(1,600	)		(1,805	)		(2,852	)		(2,787	)		(9,044	)
Other expenses, net:
Interest expense, net		(731	)		(451	)		(455	)		(256	)		(1,893	)
Change in put and note extension option and warrant liabilities		(78	)		—			—			—			(78	)
Loss on early extinguishment of debt		-			—			(1,193	)		—			(1,193	)
Loss before income taxes		(2,409	)		(2,256	)		(4,500	)		(3,043	)		(12,208	)
Income taxes		(2	)		—			—			—			(2	)
Net loss	$	(2,411	)	$	(2,256	)	$	(4,500	)	$	(3,043	)	$	(12,210	)
Basic and diluted net loss per common share	$	-0.22		$	-0.15		$	-0.28		$	-0.18		$	-0.83
Weighted average shares used in computing basic and diluted net loss per common share		11,105,854			15,241,904			16,035,861			16,542,717			14,736,651

Description of Business (Details Textuals)	Mar. 31, 2013 USD ($) $ / shares shares
Description Of Business Details Textuals
Awarded by U.S. National Institutes \| $	$ 8,800,000
Outstanding shares acquired	6,836,452
Share repurchase	5,064,207
Shares outstanding at merger	784,500
Outstanding share representation	90.00%
Number of shares authorized following amendment	200,000,000
Number of Preferred shares authorized following amendment	10,000,000
Series A Preferred Stock shares	500,000
Series A Preferred share par value \| $ / shares	$ 0.001
Conversion Rate, Series A Preferred shares	10
Conversion total, Series A Preferred to Common	15,000,000
Conversion to warrant, warrant value	7,500,000
Warrant exercise price \| $ / shares	$ 1.5

Basis of Presentation and Going Concern (Details Textuals) - USD ($)	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2011
Basis Of Presentation And Going Concern Details Textuals
Accumulated Deficit during its development stage	$ (67,669,200)	$ (54,782,500)
Cash and cash equivalents	638,100	$ 81,000	$ 139,300
Cash expenditure	5,000,000
Private placement proceeds	$ 36,000,000

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash
-URI http://asc.fasb.org/extlink&oid=6506951

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section 45
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6361293&loc=d3e6676-107765

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3044-108585

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash Equivalents
-URI http://asc.fasb.org/extlink&oid=6507016

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.1)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 1
-Article 5

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7, 26
-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 95
-Paragraph 7
-Footnote 1
-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 95
-Paragraph 8, 9
-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.

Series A preferred stock issued and outstanding

Summary of Significant Accounting Policies (Details) - shares

Mar. 31, 2013

Mar. 31, 2012

Loss per Common Share

15,000,000

4,370,550

Common stock warants issuable to Platinum upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement

7,500,000

Outstanding options under the 2008 and 1999 Stock Incentive Plans

4,912,604

4,805,771

Outstanding warrants to purchase common stock

14,660,335

4,126,589

10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including accrued interest through March 31, 2013 (2)

6,775,682

^[1]

Total

48,848,621

13,302,910

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

Fair Value Measurements (Details) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Liabilities, Fair Value Disclosure
Warrant liability	$ 6,394,000
Put option and note term extension option liabilities
Fair Value, Inputs, Level 1 [Member]
Liabilities, Fair Value Disclosure
Warrant liability
Put option and note term extension option liabilities
Fair Value, Inputs, Level 2 [Member]
Liabilities, Fair Value Disclosure
Warrant liability
Put option and note term extension option liabilities
Fair Value, Inputs, Level 3 [Member]
Liabilities, Fair Value Disclosure
Warrant liability	$ 6,394,000
Put option and note term extension option liabilities

Fair Value Measurements (Details Textuals) - USD ($)	3 Months Ended
Fair Value Measurements (Details Textuals) - USD ($)	Dec. 31, 2012	Mar. 31, 2013
Fair Value Measurements Details Textuals
Convertible promissory notes		$ 4,000,000
Original Principle balance of notes		$ 4,000,000
Repayment of debt 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	$ 161,800
Aggregated fair value of the warrants		$ 424,100

Property and Equipment (Details) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Property, Plant and Equipment [Abstract]
Laboratory equipment	$ 649,500	$ 515,800
Computers and network equipment	12,900	12,900
Office furniture and equipment	69,600	75,600
Property and equipment gross	732,000	604,300
Accumulated depreciation and amortization	(551,300)	(529,800)
Property and equipment, net	$ 180,700	$ 74,500

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

AV-101 Acquisition (Details Textuals)	12 Months Ended
AV-101 Acquisition (Details Textuals)	Mar. 31, 2013 USD ($) $ / shares shares
Av-101 Acquisition Details Textuals
Conversion feature	90.45%
Series B-1 Shares issued \| shares	1,356,750
Series B-1 value per share \| $ / shares	$ 5.545
Pre-Merger purchase price	$ 7,523,200
NIH awarded the Company aggregate support	$ 8,800,000

Accrued Expenses (Details) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Accrued Expenses
Accrued professional services	$ 67,800	$ 107,400
Accrued research and development expenses		237,500
Accrued vacation pay and other compensation	219,300	229,900
Accrued placement agent fees		50,000
Accrued royalties and license fees	25,000	5,000
All other	30,800	27,500
Total	$ 342,900	$ 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).

7. Convertible Promissory Notes and Other Notes Payable (Details) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Senior Note1 [Member]
Principal Balance	$ 1,272,600
Accrued Interest	61,700
Total	1,334,300
Senior Note 2 [Member]
Principal Balance	500,000
Accrued Interest	24,200
Total	524,200
Senior Note 3 [Member]
Principal Balance	500,000
Accrued Interest	23,000
Total	523,000
Senior Note 4 [Member]
Principal Balance	250,000
Accrued Interest	26,000
Total	252,600
Senior Note 5 [Member]
Principal Balance	750,000
Accrued Interest	47,000
Total	754,700
Note Discount [Member]
Principal Balance	(1,963,100)	$ (499,300)
Accrued Interest
Total	(1,963,100)	(499,300)
SevenPercentNotesPayableAprilTwoThousandEleven [Member]
Principal Balance	38,500	63,800
Accrued Interest	200	400
Total	38,700	64,200
SevenPercentNotesPayableAugustTwoThousandTwelve [Member]
Principal Balance	60,000
Accrued Interest	400
Total	60,400
SevenPercentNotesPayable [Member]
Principal Balance	98,500	63,800
Accrued Interest	600	400
Total	99,100	64,200
CurrentPortion [Member]
Principal Balance	(43,000)	(63,800)
Accrued Interest	(600)	(400)
Total	(43,600)	(64,200)
SevenPercentNotesPayableNonCurrentPortion [Member]
Principal Balance	55,500
Accrued Interest
Total	55,500
BurrPilgerMayer [Member]
Principal Balance	91,800	93,400
Accrued Interest	1,200	1,100
Total	93,000	94,500
Desjardins [Member]
Principal Balance	214,500	224,300
Accrued Interest	10,700	2,800
Total	225,200	227,100
McCarthyTetrault [Member]
Principal Balance	441,700	459,400
Accrued Interest	22,000	5,700
Total	463,700	465,100
MayTwoThousandElevenMorrisonFoerster [Member]
Principal Balance		2,420,100
Accrued Interest		37,900
Total		2,458,000
AugustTwoThousandTwelveMorrisonAndFoersterNoteA [Member]
Principal Balance	991,200
Accrued Interest
Total	991,200
AugustTwoThousandTwelveMorrisonAndFoersterNoteB [Member]
Principal Balance	1,379,400
Accrued Interest	8,300
Total	1,387,700
NoteDiscountOne [Member]
Principal Balance	(1,600,400)	(228,900)
Accrued Interest
Total	(1,600,400)	(228,900)
SevenPointFivePercentNotesPayable [Member]
Principal Balance	1,518,200	2,968,300
Accrued Interest	42,200	47,500
Total	1,560,400	3,015,800
CurrentPortionOne [Member]
Principal Balance	(531,000)	(367,700)
Accrued Interest	(33,900)
Total	(564,900)	(367,700)
NonCurrentPortionAndDiscount [Member]
Principal Balance	987,200	2,600,600
Accrued Interest	8,300	47,500
Total	995,500	2,648,100
FivePointEightPercentAndEightPercentNotesPayableToInsurancePremiumFinancingCompanyCurrent [Member]
Principal Balance	40,300	4,600
Accrued Interest
Total	40,300	4,600
TenPercentNotesPayableToVendorsForAccountsPayableConvertedToNotesPayable [Member]
Principal Balance	158,900	165,400
Accrued Interest	20,800	16,800
Total	179,700	182,200
CurrentPortionTwo [Member]
Principal Balance	(145,400)	(146,000)
Accrued Interest	(20,800)
Total	(166,200)	(146,000)
NonCurrentPortion [Member]
Principal Balance	13,500	19,400
Accrued Interest		16,800
Total	13,500	36,200
TenPercentNotesPayableToUnrelatedParties [Member]
Principal Balance	1,815,900	3,202,100
Accrued Interest	63,600	64,700
Total	1,879,500	3,266,800
CurrentPortionThree [Member]
Principal Balance	(759,700)	(582,100)
Accrued Interest	(55,300)	(400)
Total	(815,000)	(582,500)
NonCurrentPortionAndDiscountOne [Member]
Principal Balance	1,056,200	2,620,000
Accrued Interest	8,300	64,300
Total	1,064,500	2,684,300
SevenPercentNotePayableToCatoHolding [Member]
Principal Balance	293,400	293,300
Accrued Interest	17,200	6,900
Total	310,600	300,200
NoteDiscountTwo [Member]
Principal Balance	(18,000)	(24,300)
Accrued Interest
Total	(18,000)	(24,300)
NotesPayableToRelatedParties [Member]
Principal Balance	275,400	269,000
Accrued Interest	17,200	6,900
Total	292,600	275,900
CurrentPortionFour [Member]
Principal Balance	(237,200)	(168,200)
Accrued Interest	(17,200)
Total	(254,400)	(168,200)
NonCurrentPortionAndDiscountTwo [Member]
Principal Balance	38,200	100,800
Accrued Interest		6,900
Total	$ 38,200	107,700
IssuedToPlatinumOnTwoJulyTwoThousandTwelve [Member]
Principal Balance
Accrued Interest
Total
IssuedToPlatinumOnThirtyAugustTwoThousandTwelve [Member]
Principal Balance
Accrued Interest
Total
SeniorNotesNonCurrent [Member]
Principal Balance
Accrued Interest
Total
FebruaryTwoThousandTwelveTwelvePercentConvertiblePromissoryNotesMember
Principal Balance		500,000
Accrued Interest		5,300
Total		505,300
TwelvePercentConvertibleNotesNetNnonCurrent [Member]
Principal Balance		700
Accrued Interest		5,300
Total		$ 6,000

7. Convertible Promissory Notes and Other Notes Payable (Details 2)	12 Months Ended
	Mar. 31, 2013 USD ($) $ / shares shares
Exchange Warrant [Member]
Exchange Warrant assumptions:
Market price of common stock \| $ / shares	$ .75
Exercise price \| $ / shares	$ 1.5
Risk-free interest rate	0.60%
Volatility	85.00%
Dividend rate	0.00%
Fair value per share \| $ / shares	$ .53
Number of shares \| shares	1,272,577
Fair value at date of issuance	$ 672,000
Components of discount and effective interest rate for Investment Notes
Face value	1,272,600
Discount attributable to fair value of warrant
Discount attributable to Beneficial conversion feature
Inception date carrying value	$ 1,272,600
Effective Interest rate	10.00%
Oct 11 2012 Warrant [Member]
Exchange Warrant assumptions:
Market price of common stock \| $ / shares	$ .75
Exercise price \| $ / shares	$ 1.5
Risk-free interest rate	0.60%
Volatility	85.00%
Dividend rate	0.00%
Fair value per share \| $ / shares	$ .53
Number of shares \| shares	500,000
Fair value at date of issuance	$ 264,000
Components of discount and effective interest rate for Investment Notes
Face value	500,000
Discount attributable to fair value of warrant	(264,000)
Discount attributable to Beneficial conversion feature	(231,000)
Inception date carrying value	$ 5,000
Effective Interest rate	159.05%
Oct 19 2012 Warrant [Member]
Exchange Warrant assumptions:
Market price of common stock \| $ / shares	$ .75
Exercise price \| $ / shares	$ 1.5
Risk-free interest rate	0.60%
Volatility	85.00%
Dividend rate	0.00%
Fair value per share \| $ / shares	$ .53
Number of shares \| shares	500,000
Fair value at date of issuance	$ 264,000
Components of discount and effective interest rate for Investment Notes
Face value	500,000
Discount attributable to fair value of warrant	(264,000)
Discount attributable to Beneficial conversion feature	(231,000)
Inception date carrying value	$ 5,000
Effective Interest rate	159.05%
Feb 22 2013 Warrant [Member]
Exchange Warrant assumptions:
Market price of common stock \| $ / shares	$ .6
Exercise price \| $ / shares	$ 1.5
Risk-free interest rate	0.84%
Volatility	85.00%
Dividend rate	0.00%
Fair value per share \| $ / shares	$ .39
Number of shares \| shares	250,000
Fair value at date of issuance	$ 97,000
Components of discount and effective interest rate for Investment Notes
Face value	250,000
Discount attributable to fair value of warrant	(97,000)
Discount attributable to Beneficial conversion feature	(147,000)
Inception date carrying value	$ 60,000
Effective Interest rate	127.27%
March 12 2013 Warrant [Member]
Exchange Warrant assumptions:
Market price of common stock \| $ / shares	$ .8
Exercise price \| $ / shares	$ 1.5
Risk-free interest rate	0.88%
Volatility	85.00%
Dividend rate	0.00%
Fair value per share \| $ / shares	$ .52
Number of shares \| shares	750,000
Fair value at date of issuance	$ 393,000
Components of discount and effective interest rate for Investment Notes
Face value	750,000
Discount attributable to fair value of warrant	(393,000)
Discount attributable to Beneficial conversion feature	(349,500)
Inception date carrying value	$ 7,500
Effective Interest rate	159.05%

7. Convertible Promissory Notes and Other Notes Payable (Details 1)	12 Months Ended
	Mar. 31, 2013 $ / shares
Pre-Modification [Member]
Market price per share	$ 0.94
Exercise price per share	$ 2
Risk-free interest rate	25.00%
Expected term (years)	2 years 4 months
Volatility	77.90%
Dividend rate	0.00%
Fair Value per share	$ 0.24
Post-Modification [Member]
Market price per share	0.94
Exercise price per share	$ 2
Risk-free interest rate	60.00%
Expected term (years)	5 years 14 days
Volatility	88.80%
Dividend rate	0.00%
Fair Value per share	$ 0.52

7. Convertible Promissory Notes and Other Notes Payable (Details Textuals)	Mar. 31, 2013 USD ($) $ / shares shares
Debt Instrument [Line Items]
Private placement proceeds	$ 36,000,000
February2012ConvertibleNotes12PercentMember
Debt Instrument [Line Items]
Liability under the Registration Rights Agreement	20,700
July 2012 Platinum Note	500,000
August 2012 Platinum Note	$ 750,000
July and August note Rate	10.00%
Expected gross note proceeds	$ 3,250,000
February 2012 Note	$ 500,000
February Note rate	12.00%
Warrant value \| $ / shares	$ 2.75
Aggregate share value	$ 272,724
Registration rights agreement liability	20,700
October 2012 Platinum Note principal amount	2,000,000
October 2012 Platinum Note tranch amount	500,000
October 2012 Platinum Note gross proceeds	$ 1,000,000
Private Placements \| shares	951,256
Private placement proceeds	$ 475,600
Private placement unit price \| $ / shares	$ 0.50
Financing required to sell Note	$ 524,400

7. Convertible Promissory Notes and Other Notes Payable (Details Textuals 2) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Debt Instrument [Line Items]
Shares Exercisable	4,227,436	3,740,135
LegalEntityAxis
Debt Instrument [Line Items]
New unsecured promissory note	$ 1,009,000
Shares Exercisable	1,009,000

9. Capital Stock (Details)	12 Months Ended
9. Capital Stock (Details)	Mar. 31, 2013 $ / shares
PreModificationWarrantsMember
Assumption:
Market price per share	$ 1.95
Exercise price per share (weighted average)	2.75
Exercise price per share Upper	$ 6
Risk-free interest rate Minimum	0.29%
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	1.95
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

9. Capital Stock (Details 1)	Mar. 31, 2013 $ / shares shares
ShareBasedCompensationWarrantsTenMember
Warrants option
Exercise Price \| $ / shares	$ .64
Expiration Date	3/3/2023
Number of Warrants \| shares	3,000,000
ShareBasedCompensationWarrantsOneMember
Warrants option
Exercise Price \| $ / shares	$ 0.88
Expiration Date	5/11/2014
Number of Warrants \| shares	15,428
ShareBasedCompensationWarrantsTwoMember
Warrants option
Exercise Price \| $ / shares	$ 1.00
Expiration Date	9/15/2017
Number of Warrants \| shares	3,053,573
ShareBasedCompensationWarrantsTwelveMember
Warrants option
Exercise Price \| $ / shares	$ 1.125
Expiration Date	12/28/2012
Number of Warrants \| shares
ShareBasedCompensationWarrantsFourMember
Warrants option
Exercise Price \| $ / shares	$ 1.25
Expiration Date	5/11/2014 to 12/31/2014
Number of Warrants \| shares	120,280
ShareBasedCompensationWarrantsFiveMember
Warrants option
Exercise Price \| $ / shares	$ 1.50
Expiration Date	12/31/2012 to 9/4/2017
Number of Warrants \| shares	7,460,816
ShareBasedCompensationWarrantsSixMember
Warrants option
Exercise Price \| $ / shares	$ 1.75
Expiration Date	12/31/2013
Number of Warrants \| shares	349,235
ShareBasedCompensationWarrantsSevenMember
Warrants option
Exercise Price \| $ / shares	$ 2.00
Expiration Date	8/3/2013 to 9/15/2017
Number of Warrants \| shares	425,000
ShareBasedCompensationWarrantsEightMember
Warrants option
Exercise Price \| $ / shares	$ 2.50
Expiration Date	05-11-2014
Number of Warrants \| shares	42,443
ShareBasedCompensationWarrantsNineMember
Warrants option
Exercise Price \| $ / shares	$ 2.625
Expiration Date	12/31/2013
Number of Warrants \| shares	68,560
ShareBasedCompensationWarrantsThirteenMember
Warrants option
Exercise Price \| $ / shares	$ 2.75
Expiration Date	2/28/2017
Number of Warrants \| shares
ShareBasedCompensationWarrantsElevenMember
Warrants option
Exercise Price \| $ / shares	$ 3.00
Expiration Date	5/11/2015 to 2/13/2016
Number of Warrants \| shares	125,000
ShareBasedCompensationWarrantsFourteenMember
Warrants option
Exercise Price \| $ / shares	$ 6
Expiration Date	6/28/2012-12/31/2013
ShareBasedCompensationWarrantsMember
Warrants option
Number of Warrants \| shares	14,660,335

Capital Stock (Details 2)	Mar. 31, 2013 shares
Capital Stock Details 2
Upon exchange of all shares of Series A Preferred Stock currently issued and outstanding	15,000,000
Warrant shares issuable to Platinum upon exercise of common stock warrant upon exchange of Series A preferred stock under the terms of the October 11, 2012 Note Purchase and Exchange Agreement	7,500,000
110% of shares issuable upon conversion of 10% convertible Exchange Note and Investment Notes issued to Platinum in October 2012, February 2013 and March 2013, including interest accrued through maturity (2)	9,747,422
Pursuant to warrants to purchase common stock:
Subject to outstanding warrants	14,660,335
Issuable pursuant to accrued interest through maturity on outstanding promissory notes issued to Morrison & Foerster, Cato Research Ltd., and University Health Network	1,196,427
Pursuant to warrants to purchase common stock, total	15,856,762
Pursuant to stock incentive plans:
Subject to outstanding options under the 2008 and 1999 Stock Incentive Plans	4,912,604
Available for future grants	257,867
Pursuant to stock incentive plans, total	5,170,471
Upon sales of additional Units pursuant to the 2012 Private Placement of Units	15,414,583
Total	68,689,238

9. Capital Stock (Details Textuals) - USD ($)	1 Months Ended		2 Months Ended	3 Months Ended	12 Months Ended		178 Months Ended
9. Capital Stock (Details Textuals) - USD ($)	Jun. 30, 2012	Apr. 30, 2012	Jun. 30, 2012	Jun. 30, 2012	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Cash proceeds from common stock					$ 1,185,100	$ 2,679,200	$ 3,985,100
Preferred stock issued					15,000,000	4,370,550	15,000,000
Convertible promissory note					$ 4,000,000		$ 4,000,000
Securities stated value per share					$ 0.001	$ 0.001	$ 0.001
InvestorRelationServicesMember
Purchase of common stock		50,000
Common stock, exercise price per share		$ 2.80
Fair value of warrant		$ 69,200
Market price per share		$ 2.74
Common stock exercise price per share		$ 2.8
Risk-free interest rate		0.50%
Contractual term		3 years
Volatility		79.09%
Expected dividend rate		0.00%
Common stock granted date market price		$ 2.74
common stock at a weighted average exercise price		$ 2.8
InvestorRelationsAndPublicCompanyServicesMember
Purchase of common stock	100,000
Common stock, exercise price per share	$ 3
Fair value of warrant	$ 25,800
Market price per share	$ 0.85
Common stock exercise price per share	$ 3
Risk-free interest rate	0.46%
Contractual term	3 years 6 months 11 days
Volatility	84.28%
Expected dividend rate	0.00%
Common stock granted	280,000
Common stock granted value	$ 238,000
Common stock granted date market price	$ 0.85
common stock at a weighted average exercise price	3
AdditionalInvestorRelationsServicesMember
Market price per share	$ 0.85
Common stock granted	120,000
Common stock granted value	$ 102,000
Common stock granted date market price	$ 0.85
WarrantModificationsMember
Purchase of common stock			25,000
Common stock exercise price per share			$ 2.24
Cash proceeds from common stock			$ 257,300
Amounts due for services			$ 12,500
Common stock purchse discription			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.
Increased value of warrants exercised			$ 436,400
common stock at a weighted average exercise price			$ 2.24
ForegoingExercisesMember
Purchase of common stock				179,857
Common stock, exercise price per share				$ 3
Fair value of warrant				$ 34,800
Market price per share				$ 0.89
Common stock exercise price per share				$ 3
Risk-free interest rate				0.42%
Contractual term				3 years
Volatility				78.04%
Expected dividend rate				0.00%
Common stock granted date market price				$ 0.89
common stock at a weighted average exercise price				$ 3
PlatinumMember \| SeriesAPreferredStockMember
Preferred stock issued					62,945		62,945
Common stock owned					629,450		629,450
Secured convertible promissory note					10.00%		10.00%
Convertible promissory note					$ 500,000		$ 500,000
Securities stated value per share					$ 15		$ 15
Authorized and outstanding shares					500,000		500,000
PlatinumMember \| QualifiedFinancingMember
Financing transactions gross proceeds					$ 3		$ 3
Investment in Qualified Financing					500,000		500,000
Amount of commitments from other investors					$ 3		$ 3
Period of commitments from other investors					90 days		90 days

Research and Development Expenses (Details Narrative) - USD ($)	3 Months Ended								12 Months Ended		178 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Research and Development [Abstract]
Research and development expenses	$ 339,000	$ 1,120,000	$ 1,106,000	$ 866,000	$ 1,828,000	$ 1,306,000	$ 1,227,000	$ 1,028,000	$ 3,430,800	$ 5,388,600	$ 29,555,700

The aggregate costs 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 whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use.

Income Taxes (Details)	12 Months Ended
Income Taxes (Details)	Mar. 31, 2013	Mar. 31, 2012
Income Taxes Details
Computed expected tax benefit	(34.00%)	(34.00%)
Losses not benefitted	34.00%	34.00%
Other	0.10%	0.10%
Income tax expense	0.10%	0.10%

Income Taxes (Details 1) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Income Taxes Details 1
Net operating loss carry-forwards	$ 19,010	$ 161,911
Basis differences in fixed assets	9	13
Accruals and reserves	8	9
Total deferred tax assets, net	19,027	16,213
Valuation allowance	(19,027)	(16,213)
Net deferred tax asset

Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences from reserves and accruals.

Income Taxes (Details Narrative) - USD ($)	12 Months Ended
Income Taxes (Details Narrative) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Income Tax Disclosure [Abstract]
Valuation allowance increase	$ 2,814,000	$ 2,991,000
U.S. federal net operating loss carryforwards	47,900,000
state net operating loss carryforwards	$ 34,800,000

Amount before allocation of valuation allowances of deferred tax asset attributable to deductible state and local operating loss carryforwards.

Stock Option Plans and 401(k) Plan (Details) - $ / shares	Mar. 31, 2013	Mar. 31, 2012
MinimumMember
Exercise price	$ 0.51	$ 1.75
Market price on date of grant	$ 0.51	$ 1.75
Risk-free interest rate	0.895%	1.19%
Expected (years)	6.25	6.25
Volatility	82.90%	78.90%
Fair value per share at grant date	$ .36	$ 1.08
MaximumMember
Exercise price	0.75	2.99
Market price on date of grant	$ 0.71	$ 2.99
Risk-free interest rate	1.74%	3.39%
Expected (years)	10	10
Volatility	85.40%	91.30%
Fair value per share at grant date	$ .59	$ 2.48

Amount to be paid per share that is classified as temporary equity by entity upon redemption. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

Stock Option Plans and 401(k) Plan (Details 1) - $ / shares	12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Number of Shares
Options outstanding at beginning of period	4,805,771	3,949,153
Options granted	1,075,550	1,020,000
Options exercised		(113,979)
Options cancelled	(870,550)
Options forfeited	(29,167)	(30,000)
Options expired	(69,000)	(19,403)
Options outstanding at end of period	4,912,604	4,805,771
Options exercisable at end of period	4,227,436	3,740,135
Weighted Average Exercise Price
Options outstanding at beginning of period	$ 1.53	$ 1.42
Options granted	0.72	1.88
Options exercised		0.88
Options cancelled	1.72
Options forfeited	1.75	1.75
Options expired	1.34	0.8
Options outstanding at end of period	1.32	1.53
Options exercisable at end of period	1.35	1.45
Weighted average grant-date fair value of options granted during the period	$ .52	$ 1.36

Related Party Transactions (Details Textuals) - CatoBioVentures [Member] - USD ($)	12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Total interest expense on note and the prior line of credit	$ 51,400	$ 85,000
Incurred expenses on research and subsequent other projects	639,300	$ 1,019,000
CRL note interest expense	$ 23,600

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.

Commitments, Contingencies, Guarantees and Indemnifications (Details) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Capital lease obligations
Leased laboratory and computer equipment	$ 113,200	$ 139,700
Accumulated amortization	(114,900)	(119,200)
Leased laboratory and computer equipment, net	$ 18,300	$ 20,500

Long-lived depreciable assets not included within other defined categories that are subject to a lease meeting the criteria for capitalization.

Commitments, Contingencies, Guarantees and Indemnifications (Details 1) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
Future minimum payment, capital leases, Equipment
Lease payment 2014	$ 8,600
Lease payment 2015	4,300
Lease payment 2016	1,200
Lease payment 2017	1,200
Lease payment 2018	100
Future minimum lease payments	15,400
Less imputed interest included in minimum lease payments	(1,700)
Present value of minimum lease payments	13,700
Less current portion	(7,600)
Non-current capital lease obligation	$ 6,100	$ 9,700

Commitments, Contingencies, Guarantees and Indemnifications (Details 2)	Mar. 31, 2013 USD ($)
Future minimum payments, principal
2014	$ 684,200
2015	609,800
2016	541,700
2017	185,800
2018	18,000
Thereafter through October 2023	71,600
Total	$ 2,111,100

Commitments, Contingencies, Guarantees and Indemnifications (Details Narrative) - USD ($)	12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Future minimum payments under operating leases	$ 45,000
Facility rent expense	$ 179,000	$ 166,000

This element represents the payments that the lessee is obligated to make or can be required to make in connection with a property under the terms of an agreement classified as an operating lease, excluding contingent rentals and a guarantee by the lessee of the lessor's debt and the lessee's obligation to pay (apart from the rental payments) executory costs such as insurance, maintenance, and taxes.