0001654954-20-012266 | 10-Q | XBRL Viewer | Vistagen Therapeutics INC

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 12, 2020
Cover [Abstract]
Entity Registrant Name	VistaGen Therapeutics, Inc.
Entity Central Index Key	0001411685
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	NV
Entity File Number	001-37761
Entity Common Stock, Shares Outstanding		73,998,057
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 15,399,500	$ 1,355,100
Prepaid expenses and other current assets	455,700	225,100
Deferred contract acquisition costs - current portion	116,900	0
Total current assets	15,972,100	1,580,200
Property and equipment, net	257,600	209,600
Right of use asset - operating lease	3,403,000	3,579,600
Deferred offering costs	268,500	355,100
Deferred contract acquisition cost - non-current portion	321,700	0
Security deposits and other assets	47,800	47,800
Total assets	20,270,700	5,772,300
Current liabilities:
Accounts payable	1,176,400	1,836,600
Accrued expenses	186,900	561,500
Current notes payable, including accrued interest	352,600	56,500
Deferred revenue - current portion	1,244,000	0
Operating lease obligation - current portion	338,500	313,400
Financing lease obligation - current portion	3,500	3,300
Total current liabilities	3,301,900	2,771,300
Non-current liabilities:
Non-current portion of notes payable	87,300	0
Accrued dividends on Series B Preferred Stock	5,694,700	5,011,800
Deferred revenue - non-current portion	3,422,000	0
Operating lease obligation - non-current portion	3,540,900	3,715,600
Financing lease obligation - non-current portion	1,300	3,000
Total non-current liabilities	12,746,200	8,730,400
Total liabilities	16,048,100	11,501,700
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.001 par value; 175,000,000 shares authorized at June 30, 2020 and March 31, 2020; 55,937,472 and 49,348,707 shares issued and outstanding at June 30, 2020 and March 31, 2020, respectively	74,100	49,300
Additional paid-in capital	216,444,600	200,092,800
Treasury stock, at cost, 135,665 shares of common stock held at June 30, 2020 and March 31, 2020	(3,968,100)	(3,968,100)
Accumulated deficit	(208,332,000)	(201,907,400)
Total stockholders' (deficit) equity	4,222,600	(5,729,400)
Total liabilities and stockholders' (deficit) equity	20,270,700	5,772,300
Series A Preferred Stock
Stockholders' equity (deficit):
Preferred stock	500	500
Series B Preferred Stock
Stockholders' equity (deficit):
Preferred stock	1,200	1,200
Series C Preferred Stock
Stockholders' equity (deficit):
Preferred stock	$ 2,300	$ 2,300

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Mar. 31, 2020
Stockholders deficit:
Preferred stock, par value	$ .001	$ 0.001
Preferred stock, authorized	10,000,000	10,000,000
Common stock, par value	$ .001	$ 0.001
Common stock, authorized	175,000,000	175,000,000
Common stock, issued	74,133,722	49,348,707
Common stock, outstanding	74,133,722	49,348,707
Treasury stock	135,665	135,665
Series A Preferred Stock
Stockholders deficit:
Preferred stock, authorized	500,000	500,000
Preferred stock, issued	500,000	500,000
Preferred stock, outstanding	500,000	500,000
Series B Preferred Stock
Stockholders deficit:
Preferred stock, authorized	4,000,000	4,000,000
Preferred stock, issued	1,160,240	1,160,240
Preferred stock, outstanding	1,160,240	1,160,240
Series C Preferred Stock
Stockholders deficit:
Preferred stock, authorized	3,000,000	3,000,000
Preferred stock, issued	2,318,012	2,318,012
Preferred stock, outstanding	2,318,012	2,318,012

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Sublicense revenue	$ 334,000	$ 0	$ 334,000	$ 0
Total revenues	334,000	0	334,000	0
Operating expenses:
Research and development	2,358,200	4,205,200	4,089,400	8,519,100
General and administrative	1,269,500	1,146,100	2,660,100	3,056,200
Total operating expenses	3,627,700	5,351,300	6,749,500	11,575,300
Loss from operations	(3,293,700)	(5,351,300)	(6,415,500)	(11,575,300)
Other income (expenses), net:
Interest income (expense), net	(3,900)	15,400	(7,100)	31,900
Other income	0	0	600	0
Loss before income taxes	(3,297,600)	(5,335,900)	(6,422,000)	(11,543,400)
Income taxes	(200)	0	(2,600)	(2,400)
Net loss and comprehensive loss	(3,297,800)	(5,335,900)	(6,424,600)	(11,545,800)
Accrued dividends on Series B Preferred stock	(347,200)	(313,800)	(683,000)	(616,300)
Net loss attributable to common stockholders	$ (3,645,000)	$ (5,649,700)	$ (7,107,600)	$ (12,162,100)
Basic and diluted net loss attributable to common stockholders per common share	$ (0.05)	$ (0.13)	$ (0.12)	$ (0.29)
Weighted average shares used in computing basic and diluted net loss attributable to common stockholders per common share	67,082,935	42,622,965	59,245,209	42,622,965

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (6,424,600)	$ (11,545,800)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	50,900	52,100
Stock-based compensation	1,085,500	1,456,500
Amortization of fair value of common stock issued for services	0	92,100
Amortization of fair value of warrants issued for services	0	13,800
Changes in operating assets and liabilities:
Receivable from supplier	0	300,000
Prepaid expenses and other current assets	91,500	(229,200)
Right of use asset - operating lease	176,700	164,900
Operating lease liability	(149,700)	(127,100)
Deferred sublicense revenue, net of deferred contract acquisition costs	4,352,400	0
Accounts payable and accrued expenses	(985,700)	924,500
Net cash used in operating activities	(1,803,000)	(8,898,200)
Cash flows from investing activities:
Purchases of manufacturing and other equipment	(98,800)	0
Net cash used in investing activities	(98,800)	0
Cash flows from financing activities:
Net proceeds from issuance of common stock and warrants, including units	12,961,300	0
Net proceeds from exercise of warrants	84,600	0
Net proceeds from sale of common stock under equity line	2,841,600	0
Proceeds from issuance of note under Payroll Protection Plan	224,400	0
Repayment of capital lease obligation	(1,600)	(1,500)
Repayment of notes payable	(164,100)	(128,200)
Net cash provided by (used in) financing activities	15,946,200	(129,700)
Net increase (decrease) in cash and cash equivalents	14,044,400	(9,027,900)
Cash and cash equivalents at beginning of period	1,355,100	13,100,300
Cash and cash equivalents at end of period	15,399,500	4,072,400
Supplemental disclosure of noncash activites:
Insurance premiums settled by issuing note payable	322,200	230,200
Accrued dividends on Series B Preferred	$ 683,000	$ 616,300

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Series A Preferred Stock	Series B Preferred Stock	Series C Preferred Stock	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Total
Beginning balance (in shares) at Mar. 31, 2019	500,000	1,160,240	2,318,012	42,758,630
Beginning balance at Mar. 31, 2019	$ 500	$ 1,200	$ 2,300	$ 42,800	$ 192,129,900	$ (3,968,100)	$ (181,133,400)	$ 7,075,200
Accrued dividends on Series B Preferred stock					(302,500)			(302,500)
Stock-based compensation expense					1,063,000			1,063,000
Net loss							(6,209,900)	(6,209,900)
Ending balance (in shares) at Jun. 30, 2019	500,000	1,160,240	2,318,012	42,758,630
Ending balance at Jun. 30, 2019	$ 500	$ 1,200	$ 2,300	$ 42,800	192,890,400	(3,968,100)	(187,343,300)	1,625,800
Accrued dividends on Series B Preferred stock					(313,800)			(313,800)
Stock-based compensation expense					393,500			393,500
Net loss							(5,335,900)	(5,335,900)
Ending balance (in shares) at Sep. 30, 2019	500,000	1,160,240	2,318,012	42,758,630
Ending balance at Sep. 30, 2019	$ 500	$ 1,200	$ 2,300	$ 42,800	192,970,100	(3,968,100)	(192,679,200)	(3,630,400)
Beginning balance (in shares) at Mar. 31, 2020	500,000	1,160,240	2,318,012	49,348,707
Beginning balance at Mar. 31, 2020	$ 500	$ 1,200	$ 2,300	$ 49,300	200,092,800	(3,968,100)	(201,907,400)	(5,729,400)
Proceeds from sale of units of common stock and warrants for cash in private placement (in shares)				125,000
Proceeds from sale of units of common stock and warrants for cash in private placement				$ 200	49,800			50,000
Net proceeds from sale of common stock under equity line (in shares)				6,201,995
Net proceeds from sale of common stock under equity line				$ 6,200	2,741,300			2,747,500
Issuance of common stock at fair value for professional services (in shares)				233,645
Issuance of common stock at fair value for professional services				$ 200	124,800			125,000
Sale of common stock pursuant to 2019 Employee Stock Purchase Plan (in shares)				28,125
Sale of common stock pursuant to 2019 Employee Stock Purchase Plan					12,600			12,600
Expenses related to S-3 registration statement for shares underlying outstanding warrants					(29,400)			(29,400)
Accrued dividends on Series B Preferred stock					(335,800)			(335,800)
Stock-based compensation expense					674,600			674,600
Net loss							(3,126,800)	(3,126,800)
Ending balance (in shares) at Jun. 30, 2020	500,000	1,160,240	2,318,012	55,937,472
Ending balance at Jun. 30, 2020	$ 500	$ 1,200	$ 2,300	$ 55,900	20,330,700	(3,968,100)	(205,034,200)	(5,611,700)
Proceeds from sale of units of common stock and warrants for cash in private placement (in shares)				17,868,250
Proceeds from sale of units of common stock and warrants for cash in private placement				$ 17,900	12,887,200			12,905,100
Net proceeds from sale of common stock under equity line (in shares)				100,000
Net proceeds from sale of common stock under equity line				$ 100	49,200			49,300
Net proceeds from exercise of warrants, shares				228,000
Net proceeds from exercise of warrants, amount				$ 200	113,800			114,000
Accrued dividends on Series B Preferred stock					(347,200)			(347,200)
Stock-based compensation expense					410,900			410,900
Net loss							(3,297,800)	(3,297,800)
Ending balance (in shares) at Sep. 30, 2020	500,000	1,160,240	2,318,012	74,133,722
Ending balance at Sep. 30, 2020	$ 500	$ 1,200	$ 2,300	$ 74,100	$ 216,444,600	$ (3,968,100)	$ (208,332,000)	$ 4,222,600

Description of Business

6 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

VistaGen Therapeutics, Inc., a Nevada corporation (which may be referred to as VistaGen, the Company, we, our, or us), is a clinical-stage biopharmaceutical company committed to developing and commercializing differentiated new generation medications that go beyond the current standard of care for anxiety, depression and other central nervous system (CNS) disorders. Our pipeline includes three CNS drug candidates, each with a differentiated mechanism of action, an exceptional safety profile in all clinical studies to date, and therapeutic potential in multiple CNS markets. Additionally, our subsidiary, VistaStem Therapeutics (VistaStem), has developed CardioSafe 3D™, a customized human heart cell-based cardiac bioassay system, to assess and develop potential small molecule new chemical entities (NCEs) for our CNS pipeline, or for out-licensing. We aim to become a fully-integrated biopharmaceutical company that develops and commercializes innovative CNS therapies for large and growing mental health and neurology markets where we believe current treatments are inadequate to meet the underserved needs of millions of patients and their caregivers worldwide.

Our Product Candidates

PH94B is an innovative synthetic neuroactive pherine nasal spray with therapeutic potential in a wide range of mental health disorders involving anxiety or phobia. Self-administered in microgram-level doses, PH94B produces rapid onset anti-anxiety effects and does not require systemic uptake and distribution to do so. We are currently preparing PH94B for pivotal Phase 3 development as a potential acute treatment of anxiety in adults with Social Anxiety Disorder (SAD). With its rapid-onset pharmacology, lack of systemic exposure and sedation, and its excellent safety profile to date, we believe PH94B has potential to displace benzodiazepines in the drug treatment paradigm for anxiety disorders. In addition to SAD, we believe PH94B also has potential as a novel treatment for adjustment disorder, postpartum anxiety, post-traumatic stress disorder, preprocedural anxiety, panic and many other anxiety-related disorders. The FDA has granted Fast Track designation (FTD) for development of PH94B as a potential acute treatment of anxiety in adults with SAD, which we believe to be the first such FTD granted by the FDA for a drug candidate for treatment of SAD.

PH10 is an innovative synthetic neuroactive pherine delivered intranasally with therapeutic potential in a wide range of neuropsychiatric indications involving depression. Self-administered in microgram-level doses, and in contrast to currently available oral antidepressants, PH10 has potential to produce rapid-onset antidepressant effects without requiring systemic uptake and distribution. Based on its differentiated pharmacology and a successful exploratory Phase 2A study of PH10 in patients with major depressive disorder (MDD), we are initially developing PH10 as a potential new generation rapid-onset stand-alone treatment of MDD. We believe PH10 also has potential as a novel rapid-onset treatment for postpartum depression, treatment-resistant depression and suicidal ideation.

AV-101 is a novel, oral prodrug that targets the NMDAR (N-methyl-D-aspartate receptor), an ionotropic glutamate receptor in the brain. Abnormal NMDAR function is associated with numerous CNS diseases and disorders. AV-101’s active metabolite, 7-chloro-kynurenic acid (7-Cl-KYNA), is a potent and selective full antagonist of the glycine coagonist site of the NMDAR that inhibits the function of the NMDAR, but does not block the NMDAR like ketamine and other NMDAR antagonists. We have demonstrated in clinical trials that AV-101 is orally-available, well-tolerated and does not cause dissociative or hallucinogenic psychological side effects or safety concerns similar to those that may be caused by ketamine or other NMDAR antagonists. With its exceptionally few side effects and excellent safety profile, we believe AV-101 has potential to be an oral, new generation treatment for multiple CNS indications involving abnormal NMDAR function and where current the current standard of care is inadequate to meet underserved patient needs. The FDA has granted FTD for development of AV-101 as both a potential adjunctive treatment for MDD and as a non-opioid treatment for neuropathic pain. Based on successful preclinical studies of AV-101 in combination with probenecid, we are assessing potential Phase 1 development of the combination to enable potential exploratory Phase 2A studies in MDD, neuropathic pain, dyskinesia associated with levodopa therapy for Parkinson’s disease, epilepsy and/or suicidal ideation.

VistaStem is applying pluripotent stem cell (hPSC) technology and CardioSafe 3D, our customized cardiac bioassay system, to discover and develop, novel small molecule NCEs for our CNS pipeline or for out-licensing. To advance potential cell therapy (CT) and regenerative medicine (RM) applications of VistaStem’s hPSC technologies related to heart cells, we have licensed to BlueRock Therapeutics LP, a next generation CT/RM company formed jointly by Bayer AG and Versant Ventures and now a subsidiary of Bayer AG, rights to develop and commercialize certain proprietary technologies relating to the production of cardiac stem cells for the treatment of heart disease. As a result of its acquisition of BlueRock Therapeutics LP in 2019, Bayer AG now holds such rights (the Bayer Agreement). The Bayer Agreement is described more completely in Note 11, Sublicensing and Collaboration Agreements.

Our product candidates are protected through a combination of patents, trade secrets, and proprietary know-how. If approved, they may also be eligible for periods of regulatory exclusivity. Our intellectual property portfolio includes issued U.S. and foreign patents, as well as U.S. and foreign patent applications.

Subsidiaries

As noted above, VistaStem Therapeutics, a California corporation, is our wholly-owned subsidiary. Our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q (Report) also include the accounts of VistaStem and VistaStem’s two wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation, and VistaStem Canada, Inc., a corporation organized under the laws of Ontario, Canada.

Basis of Presentation

6 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not contain all of the information and footnotes required for complete consolidated financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our interim financial information. The accompanying Condensed Consolidated Balance Sheet at March 31, 2020 has been derived from our audited consolidated financial statements at that date but does not include all disclosures required by U.S. GAAP. The operating results for the three and six months ended September 30, 2020 are not necessarily indicative of the operating results to be expected for our fiscal year ending March 31, 2021, or for any other future interim or other period.

The accompanying unaudited Condensed Consolidated Financial Statements and notes to the Condensed Consolidated Financial Statements contained in this Report should be read in conjunction with our audited Consolidated Financial Statements for our fiscal year ended March 31, 2020 contained in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (SEC) on June 29, 2020.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared assuming we will continue as a going concern. As a clinical-stage biopharmaceutical company having not yet developed commercial products or achieved sustainable revenues, we have experienced recurring losses and negative cash flows from operations resulting in a deficit of approximately $208.3 million accumulated from inception (May 1998) through September 30, 2020. We expect losses and negative cash flows from operations to continue for the foreseeable future as we engage in further development of PH94B, PH10 and AV-101, execute our drug rescue programs and pursue potential drug development and regenerative medicine opportunities.

Since our inception in May 1998 through September 30, 2020, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and debt securities for cash proceeds of approximately $99.2 million, as well as from an aggregate of approximately $22.7 million of government research grant awards (excluding the fair market value of government sponsored and funded clinical trials), strategic collaboration payments and intellectual property licensing, and other revenues. Additionally, we have issued equity securities with an approximate value at issuance of $38.2 million in noncash acquisitions of product licenses and in settlements of certain liabilities, including liabilities for professional services rendered to us or as compensation for such services.

Recent Developments

At September 30, 2020, we had cash and cash equivalents of approximately $15.4 million. As described more completely in Note 8, Capital Stock, in August 2020, we entered into an underwriting agreement (the Underwriting Agreement) pursuant to which we sold, in an underwritten public offering (the August 2020 Public Offering), an aggregate of 15,625,000 shares (the Shares) of our common stock for a public offering price of $0.80 per Share, resulting in gross proceeds to us of $12,500,000. Under the terms of the Underwriting Agreement, we granted to the underwriter an over-allotment option (the Over-Allotment Option) to purchase up to an additional 2,343,750 Shares (the Option Shares) at a public offering price of $0.80 per Option Share. The underwriter exercised the Over-Allotment Option with respect to 2,243,250 Option Shares (the Exercised Option Shares), resulting in additional gross proceeds to us of $1,794,600. Net proceeds to us from the sale of the Shares and the Exercised Option Shares, after deducting underwriting discounts and commissions and offering expenses payable by us, were approximately $12.9 million.

As more completely described in Note 11, Sublicensing and Collaboration Agreements, in June 2020, we entered into a strategic licensing and collaboration agreement for the clinical development and commercialization of PH94B for acute treatment of anxiety in adults with SAD and other potential anxiety-related disorders (the EverInsight Agreement), with EverInsight Therapeutics Inc., (EverInsight), a biopharmaceutical company focused on developing and commercializing transformative pharmaceutical products for patients in Greater China and other parts of Asia, and funded by CBC Group, a global healthcare-focused venture capital firm. In October 2020, it was announced that EverInsight is to merge with AffaMed Therapeutics, also funded by CBC Group, which as a combined, complementary entity will focus on developing and commercializing therapeutics to address ophthalmologic and CNS disorders in Greater China and beyond. Under the terms of the EverInsight Agreement, EverInsight agreed to make a non-dilutive upfront license payment of $5.0 million to us, which we received in August 2020. Upon successful development and commercialization of PH94B in EverInsight’s territory, we are eligible to receive up to $172 million in additional development and commercial milestone payments, plus royalties on commercial sales in the licensed territory. The $5.0 million upfront license payment resulted in net cash proceeds to us of approximately $4.655 million after the sublicense payment we agreed to make to Pherin Pharmaceuticals, Inc. (Pherin) pursuant to our PH94B license from Pherin, and payment for consulting services related to the EverInsight Agreement.

As more completely described in Note 8, Capital Stock, on March 24, 2020, we entered into a purchase agreement and a registration rights agreement with Lincoln Park Capital Fund (Lincoln Park) pursuant to which Lincoln Park committed to purchase up to $10,250,000 of our common stock at market-based prices over a period of 24 months (the LPC Agreement). To satisfy our obligations under the registration rights agreement, we filed a Registration Statement on Form S-1 (the LPC Registration Statement) with the Securities and Exchange Commission (the SEC) on March 31, 2020, which the SEC declared effective on April 14, 2020 (Registration No. 333-237514). Subsequent to the effectiveness of the LPC Registration Statement, through September 30, 2020, we sold 6,301,995 registered shares of our common stock to Lincoln Park and received gross cash proceeds of $2,891,200.

Going Concern

Although the transactions described above have generated approximately $20.0 million in net cash proceeds to us between April 1, 2020 and the date of this Report, we believe it is probable that our cash position at September 30, 2020, which reflects such net proceeds, will not be sufficient to fund our planned operations for the twelve months following the issuance of these financial statements, which raises substantial doubt that we can continue as a going concern. During the next twelve months, subject to securing appropriate and adequate additional financing, we plan to (i) prepare for and launch a pivotal Phase 3 clinical trial of PH94B for acute treatment of anxiety in adult patients with SAD, (ii) prepare for and launch a small exploratory Phase 2A study of PH94B for acute treatment of adult patients with adjustment disorder, (iii) prepare for and potentially launch small exploratory Phase 2A clinical studies of PH94B in postpartum anxiety, post-traumatic stress disorder and/or pre-procedural (i.e. pre-MRI) anxiety, (iv) assess and potentially launch a Phase 1 study of AV-101 in combination with probenecid to enable exploratory Phase 2A development of the combination for treatment of CNS disorders, and (v) conduct several nonclinical studies involving PH94B, PH10 and AV-101. When necessary and advantageous, we plan to raise additional capital through the sale of our equity securities in one or more (i) private placements to accredited investors, (ii) public offerings and/or (iii) in strategic licensing and development collaborations involving one or more of our drug candidates in markets outside the United States, similar to the EverInsight Agreement. Subject to certain restrictions, our Registration Statement on Form S-3 (Registration No. 333-234025) (the S-3 Registration Statement), which became effective on October 7, 2019 and was used to register the Shares and the Exercised Option Shares sold in the August 2020 Public Offering, remains available for future sales of our equity securities in one or more public offerings from time to time. While we may make additional sales of our equity securities under the S-3 Registration Statement, we do not have an obligation to do so. Further, at September 30, 2020 and through the date of this Report, there are approximately 2.04 million registered shares of our common stock remaining available for sale under the LPC Agreement. We have no obligation to sell any additional shares to LPC under the LPC Agreement.

As we have been in the past, we expect that, when and as necessary, we will be successful in raising additional capital from the sale of our equity securities either in one or more public offerings or in one or more private placement transactions with individual accredited investors and institutions. In addition to the potential sale of our equity securities, we may also seek to enter research, development and/or commercialization collaborations similar to the EverInsight Agreement and the Bayer Agreement that could generate revenue or provide funding, including non-dilutive funding, for development of one or more of our CNS product candidate programs. We may also seek additional government grant awards or agreements similar to our prior agreement with the U.S. National Institutes of Health (NIH), Baylor University and the U.S. Department of Veterans Affairs in connection with certain government-sponsored studies of AV-101. Such strategic collaborations may provide non-dilutive resources to advance our strategic initiatives while reducing a portion of our future cash outlays and working capital requirements. We may also pursue intellectual property arrangements similar to the EverInsight Agreement and the Bayer Agreement with other parties. Although we may seek additional collaborations that could generate revenue and/or provide non-dilutive funding for development of our product candidates, as well as new government grant awards and/or agreements, no assurance can be provided that any such collaborations, awards or agreements will occur in the future.

Our future working capital requirements will depend on many factors, including, without limitation, potential impacts related to the current COVID-19 pandemic, the scope and nature of opportunities related to our success and the success of certain other companies in nonclinical and clinical trials, including our development and commercialization of our current product candidates and various applications of our stem cell technology platform, the availability of, and our ability to obtain, government grant awards and agreements, and our ability to enter into collaborations on terms acceptable to us. To further advance the clinical development of PH94B, PH10, and AV-101 and, to a lesser extent, our stem cell technology platform, as well as support our operating activities, we plan to continue to carefully manage our routine operating costs, including our employee headcount and related expenses, as well as costs relating to regulatory consulting, contract manufacturing, research and development, investor and public relations, business development, legal, intellectual property acquisition and protection, public company compliance and other professional services and operating costs.

Notwithstanding the foregoing, there can be no assurance that our current strategic collaborations under the EverInsight Agreement and the Bayer Agreement will generate revenue from future potential milestone payments, or that future financings or government or other strategic collaborations will be available to us in sufficient amounts, in a timely manner, or on terms acceptable to us, if at all. If we are unable to obtain substantial additional financing on a timely basis when needed in 2021 or thereafter, our business, financial condition, and results of operations may be harmed, the price of our stock may decline, we may be required to reduce, defer, or discontinue certain of our research and development activities and we may not be able to continue as a going concern. As noted above, these Condensed Consolidated Financial Statements do not include any adjustments that might result from the negative outcome of this uncertainty.

Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of Estimates

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

Revenue Recognition

We generate revenue from collaborative research and development arrangements, licensing and technology transfer agreements, including strategic licenses or sublicenses, and government grants. We expect that our primary source of revenue beginning in the quarter ended September 30, 2020 will be from the EverInsight Agreement involving clinical development and commercialization of PH94B for acute treatment of anxiety in adults with SAD, and potentially other anxiety-related disorders, in Greater China, South Korea, and Southeast Asia. The terms of the EverInsight Agreement include a $5.0 million non-refundable upfront license fee which we received in August 2020, potential payments based upon achievement of certain development and commercial milestones, and royalties on product sales. We also have the Bayer Agreement, pursuant to which we recorded sublicense revenue in the third quarter of our fiscal year ended March 31, 2017, also described in Note 11, Sublicensing and Collaborative Agreements, as a potential revenue generating arrangement.

Under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606), we recognize revenue when our customers obtain control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of Topic 606, we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to a customer.

Performance Obligations

We assess whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires judgments about the individual promised goods or services and whether such components are separable from the other aspects of the contractual relationship. In assessing whether a promised good or service is distinct in the evaluation of a collaboration arrangement subject to Topic 606, we consider factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace.

Collaboration arrangements can have several promised goods or services including a license for our intellectual property, product supply and development and regulatory services. When the customer could not obtain the intended benefit of the contract from a promised good or service without one or more other promises in the contract, the promise is determined to be not distinct in the context of the contract and is combined with other promises until the combined promises are distinct to identify performance obligations. We have determined that the EverInsight Agreement includes a single combined performance obligation that includes both the license to intellectual property and development and regulatory services.

Arrangements can include promises for optional additional items, which are considered marketing offers and are accounted for as separate contracts when the customer elects such options. Arrangements that include a promise for future supply of product for either clinical development or commercial supply and optional research and development services at the customer’s or the Company’s discretion are generally considered as options. We assess whether these options provide a material right to the customer and if so, such material rights are accounted for as separate performance obligations. When the customer exercises an option, any additional payments related to the option are recorded in revenue when the customer obtains control of the goods or services.

Transaction Price

Arrangements may have both fixed and variable consideration. For collaboration agreements, the non-refundable upfront fees and product supply selling prices are considered fixed, while milestone payments are considered variable consideration when determining the transaction price. At the inception of each arrangement, we evaluate whether the development milestones are considered probable of being achieved and estimate an amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within our control or the licensee’s control, such as approvals from regulators, are generally not considered probable of being achieved until such approvals are received.

For sales-based royalties, including commercial milestone payments based on the level of sales, for which the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of when (a) the related sales occur, or (b) the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

In determining the transaction price, we adjust consideration for the effects of the time value of money if the timing of payments provides us with a significant benefit of financing. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensee and the transfer of the promised goods or services to the licensee will be one year or less.

Allocation of Consideration

As part of the accounting for collaboration arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price of each performance obligation identified in the contract. The transaction price is allocated to the identified performance obligations in proportion to their standalone selling prices (SSP) on a relative SSP basis. SSP is determined at contract inception and is not updated to reflect changes between contract inception and satisfaction of the performance obligations. In developing the SSP for a performance obligation, we consider applicable market conditions and relevant Company-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. We validate the SSP for performance obligations by evaluating whether changes in the key assumptions used to determine the SSP will have a significant effect on the allocation of arrangement consideration between multiple performance obligations. Since the EverInsight Agreement includes a single combined performance obligation that is not distinct, there is no allocation of consideration.

Timing of Recognition

Significant management judgment is required to determine the level of effort required under collaboration arrangements and the period over which we expect to complete our performance obligations under the arrangement. The performance period or measure of progress is estimated at the inception of the arrangement and re-evaluated in each reporting period. This re-evaluation may shorten or lengthen the period over which revenue is recognized. Changes to these estimates are recorded on a cumulative catch up basis. Revenue is recognized for products at a point in time and for licenses of functional intellectual property at the point in time the customer can use and benefit from the license. For performance obligations that are services, revenue is recognized over time using an output or input method. For performance obligations that are a combination of licenses to intellectual property and interdependent services, the nature of the combined performance obligation is considered when determining the method and measure of progress that best represents the satisfaction of the performance obligation. For the single combined performance obligation of the EverInsight Agreement, the measure of progress is stand-ready straight-line over the period in which we expect to perform the services related to the license of PH94B.

The difference between revenue recognized to-date and the consideration invoiced or received to-date is recognized as either a contract asset/unbilled revenue (revenue earned exceeds cash received) or a contract liability/deferred revenue (cash received exceeds revenue earned). At September 30, 2020, we have recorded deferred revenue of $4,666,000. The following table presents changes in our contract liabilities for the six months ended September 30, 2020 (in thousands):

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Revenue - current portion	$	—	$	1,244,000	$	—		$	1,244,000
Deferred Revenue - non-current portion		—		3,756,000		(334,000	)		3,422,000
Total	$	—	$	5,000,000	$	(334,000	)	$	4,666,000

For the single combined performance obligation under the EverInsight Agreement, the measure of progress is stand-ready straight-line over the period in which we expect to perform the services related to the license of PH94B. Accordingly, deferred revenue is being recognized on a straight-line basis over the period in which we expect to perform the services.

During the three and six months ended September 30, 2020 and 2019, we recognized the following revenue:

	Three and Six Months Ended September 30,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period:
Performance obligations satisfied	$	-	$	-
New activities in the period:
Performance obligations satisfied		334,000		-

	$	334,000	$	-

Contract Acquisition Costs

During the quarter ended September 30, 2020, we made cash payments aggregating $345,000 for sublicense fees which we were obligated to make pursuant to our PH94B license from Pherin, and fees for consulting services exclusively related to the EverInsight Agreement. Additionally, on June 24, 2020, we issued 233,645 unregistered shares of our common stock, valued at $125,000, as partial compensation for consulting services exclusively related to the EverInsight Agreement. These sublicense fees and consulting payments and the fair value of the common stock issued, aggregating $470,000, were incurred solely as a result of obtaining the EverInsight Agreement, and, accordingly, have been capitalized as deferred contract acquisition costs in our Condensed Consolidated Balance Sheet. Capitalized contract acquisition costs are amortized over the period in which we expect to satisfy the performance obligations under the EverInsight Agreement and the amortization expense has been included in general and administrative expenses in our Condensed Consolidated Statement of Operations and Comprehensive Loss. In the quarter and six months ended September 30, 2020, we amortized $31,400 to general and administrative expense in recognition of the services performed under the arrangement. There has been no impairment loss in relation to the costs capitalized.

The following table summarizes our contract acquisition costs for the six months ended September 30, 2020.

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Contract Acquisition Costs - current portion	$	—	$	116,900	$	—		$	116,900
Deferred Contract Acquisition Costs - non-current portion		—		353,100		(31,400	)		321,700
Total	$	—	$	470,000	$	(31,400	)	$	438,600

Research and Development Expenses

Research and development expenses are composed of both internal and external costs. Internal costs include salaries and employment-related expenses, including stock-based compensation expense, of scientific personnel and direct project costs. External research and development expenses consist primarily of costs associated with clinical and nonclinical development of PH94B, PH10, AV-101, and stem cell research and development costs, and costs related to the application and prosecution of patents related to those product candidates and, to a lesser extent, our stem cell technology platform. All such costs are charged to expense as incurred. We also record accruals for estimated ongoing clinical trial costs. Clinical trial costs represent costs incurred by contract research organizations (CROs) and clinical trial sites. Progress payments are generally made to contract research and development organizations, clinical sites, investigators and other professional service providers. We analyze the progress of clinical trials, including levels of subject enrollment, invoices received and contracted costs, when evaluating the adequacy of accrued liabilities. Significant judgments and estimates must be made and used in determining the clinical trial accrual in any reporting period. Actual results could differ from those estimates under different assumptions. Revisions are charged to research and development expense in the period in which the facts that give rise to the revision become known. Costs incurred in obtaining product or technology licenses are charged immediately to research and development expense if the product or technology licensed has not achieved regulatory approval or reached technical feasibility and has no alternative future uses, as was the case with our acquisition of the exclusive worldwide licenses for PH94B and PH10 from Pherin during our fiscal year ended March 31, 2019.

Stock-Based Compensation

We recognize compensation cost for all stock-based awards to employees and non-employee consultants based on the grant date fair value of the award. We record non-cash, stock-based compensation expense over the period during which the employee or other grantee is required to perform services in exchange for the award, which generally represents the scheduled vesting period. We have not granted restricted stock awards to employees nor do we have any awards with market or performance conditions. Non-cash expense attributable to compensatory grants of shares of our common stock to non-employees is determined by the quoted market price of the stock on the date of grant and is either recognized as fully-earned at the time of the grant or amortized ratably over the term of the related service agreement, depending on the terms of the specific agreement.

The table below summarizes stock-based compensation expense included in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended September 30, 2020.

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019

Research and development expense	$	122,400	$	167,500	$	349,000	$	558,100

General and administrative expense		288,500		226,000		736,500		898,400


Total stock-based compensation expense	$	410,900	$	393,500	$	1,085,500	$	1,456,500

Expense amounts reported above include $1,300 and $3,800 in research and development expense for the three and six months ended September 30, 2020, respectively, and $1,300 and $2,800 in general and administrative expense for the three and six months ended September 30, 2020, respectively, attributable to our 2019 Employee Stock Purchase Plan.

During the three and six months ended September 30, 2020, we granted from our 2019 Omnibus Equity Incentive Plan (the 2019 Plan) options to purchase an aggregate of 120,000 shares and 2,065,000 shares, respectively, of our common stock at exercise prices at or above the closing market price of our common stock on the date of grant to the independent members of our Board, our officers and employees and certain consultants. The options generally vested 25% upon grant with the remaining shares vesting ratably over two years for independent directors, officers and employees, and over one to three years for consultants. We valued the options granted during the three and six months ended September 30, 2020 using the Black-Scholes Option Pricing Model and the following assumptions:

	Three Months Ended September 30, 2020					Six Months Ended September 30, 2020
Assumption:	Weighted Average			Range		Weighted Average			Range
Market price per share at grant date	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Exercise price per share	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Risk-free interest rate		0.31	%	0.26% to 0.33%			0.38	%	0.35% to 0.44%
Expected term in years		5.49		5.20 to 5.58			5.36		5.20 to 5.94
Volatility		84.71	%	84.55% to 85.32%			84.14	%	82.93% to 85.85%
Dividend rate		0.0	%		0.0%		0.0	%		0.0%
Shares		120,000					2,065,000

Fair Value per share	$	0.46				$	0.29

At September 30, 2020, there were stock options outstanding under our 2016 Equity Incentive Plan (the 2016 Plan) and our 2019 Plan to purchase 12,068,088 shares of our common stock at a weighted average exercise price of $1.20 per share. At that date, there were also 4,665,162 shares of our common stock available for future issuance under the 2019 Plan. There are no additional shares available for issuance under our 2016 Plan.

Leases, Right-of-Use Assets and Lease Liabilities

On April 1, 2019, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases, which replaced the existing guidance in Accounting Standards Codification (ASC) 840, “Leases”, and its subsequent amendments including ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (ASC 842) using the modified transition method.

We determine whether an arrangement is an operating or financing lease at contract inception. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. In determining the present value of the lease payments, we use the interest rate implicit in the lease when it is readily determinable and we use our estimated incremental borrowing rate based upon information available at the commencement date when the implicit rate is not readily determinable.

The lease payments used to determine our operating lease assets include lease incentives and stated rent increases and may include escalation or other clauses linked to rates of inflation or other factors when determinable and are recognized in our operating lease assets in our condensed consolidated balance sheets.

Our operating leases are reflected in right of use asset – operating leases, other current liabilities and non-current operating lease liability in our condensed consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Short-term leases, defined as leases that have a lease term of 12 months or less at the commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.

Our accounting for financing leases, previously referred to as “capital leases” under earlier guidance, remained substantially unchanged with our adoption of ASC 842. Financing leases are included in property and equipment, net and as current and non-current financing lease liabilities in our condensed consolidated balance sheets. Refer to Note 10, Commitments and Contingencies, for additional information regarding ASC 842 and its impact on our condensed consolidated financial statements.

Comprehensive Loss

We have no components of other comprehensive loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.

Loss per Common Share

Basic net loss attributable to common stockholders per share of common stock excludes the effect of dilution and is computed by dividing net loss increased by the accrual of dividends on outstanding shares of our Series B 10% Convertible Preferred Stock (Series B Preferred), by the weighted-average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock. In calculating diluted net loss attributable to common stockholders per share, we have generally not increased the denominator to include the number of potentially dilutive common shares assumed to be outstanding during the period using the treasury stock method because the result is antidilutive.

As a result of our net loss for all periods presented, potentially dilutive securities were excluded from the computation of diluted net loss per share, as their effect would be antidilutive. Potentially dilutive securities excluded in determining diluted net loss attributable to common stockholders per common share are as follows:

	At September 30,		At March 31,
	2020		2020

Series A Preferred stock issued and outstanding (1)		750,000		750,000
Series B Preferred stock issued and outstanding (2)		1,160,240		1,160,240
Series C Preferred stock issued and outstanding (3)		2,318,012		2,318,012
Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan		12,068,088		10,003,088
Outstanding warrants to purchase common stock		25,761,834		26,555,281


Total		42,058,174		40,786,621

____________

(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended

(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015; excludes shares of unregistered common stock issuable in payment of dividends on Series B Preferred upon conversion

(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016

Fair Value Measurements

We do not use derivative instruments for hedging of market risks or for trading or speculative purposes. We carried no assets or liabilities that are measured on a recurring basis at fair value at September 30, 2020 or March 31, 2020.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06), to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity.

The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives.

In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract.

The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The amendments in ASU 2020-06 are effective for public companies for fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We are evaluating the impact of this new guidance, but do not believe that our adoption of ASU 2020-06 will have a material impact on our consolidated financial statements.

Other than ASU 2020-06 and as described in our Form 10-K for our fiscal year ended March 31, 2020, we do not expect that other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date will have a material impact on our consolidated financial statements upon adoption.

Prepaid Expenses and Other Current Assets

6 Months Ended

Sep. 30, 2020

Other Assets [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are composed of the following at September 30, 2020 and March 31, 2020:

	September 30,		March 31,
	2020		2020

Clinical and nonclinical materials and contract services	$	174,000	$	115,200
Insurance		277,800		107,200
All other		3,900		2,700

	$	455,700	$	225,100

Property and Equipment

6 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment is composed of the following at September 30, 2020 and March 31, 2020:

	September 30,			March 31,
	2020			2020

Laboratory equipment	$	892,500		$	892,500
Tenant improvements		214,400			214,400
Computers and network equipment		57,100			54,600
Office furniture and equipment		84,600			84,600
Construction in progress		96,400			—
		1,345,000			1,246,100

Accumulated depreciation and amortization		(1,087,400	)		(1,036,500	)

Property and equipment, net	$	257,600		$	209,600

We recorded depreciation and amortization expense of $50,900 and $52,100 for the six-month periods ended September 30, 2020 and 2019, respectively. The amount reported above as construction in progress at September 30, 2020 reflects the cost of certain process equipment acquired in connection with the manufacture of PH94B drug product. The equipment has not yet been fully validated or placed in service at September 30, 2020. Included in amounts reported above for office furniture and equipment is the right-of-use asset related to a financing lease of certain office equipment. Amounts associated with assets subject to the financing lease at September 30, 2020 and March 31, 2020 are as follows:

	September 30,			March 31,
	2020			2020

Office equipment subject to financing lease	$	14,700		$	14,700
Accumulated depreciation		(10,900	)		(9,400	)

Net book value of office equipment subject to
financing lease	$	3,800		$	5,300

Accrued Expenses

6 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses are composed of the following at September 30, 2020 and March 31, 2020:

	September 30,		March 31,
	2020		2020

Accrued expenses for clinical and nonclinical
materials, development and contract services	$	92,300	$	462,300
Accrued professional services		78,200		76,500
All other		16,400		22,700

	$	186,900	$	561,500

Notes Payable

6 Months Ended

Sep. 30, 2020

Notes Payable [Abstract]

Notes Payable

The following table summarizes our unsecured promissory notes at September 30, 2020 and March 31, 2020:

	September 30, 2020									March 31, 2020
	Principal			Accrued						Principal		Accrued
	Balance			Interest			Total			Balance		Interest		Total

7.30% and 6.30% Notes payable
to insurance premium financing company (current)	$	214,500		$	-		$	214,500		$	56,500	$	-	$	56,500


1% Note payable under Paycheck Protection Program		224,400			1,000			225,400			-		-		-
less: current portion		(137,100	)		(1,000	)		(138,100	)		-		-		-

Non-current portion	$	87,300		$	-		$	87,300		$	-	$	-	$	-

Total current notes payable	$	351,600		$	1,000		$	352,600		$	56,500	$	-	$	56,500

In May 2020, we executed a 6.30% promissory note in the principal amount of $322,200 in connection with certain insurance policy premiums. The note is payable in monthly installments of $33,200, including principal and interest, through March 2021, and had an outstanding principal balance of $195,300 at September 30, 2020. In February 2020, we executed a 7.30% promissory note in the principal amount of $62,600 in connection with other insurance policy premiums. That note is payable in monthly installments of $6,500 including principal and interest, through December 2020 and had an outstanding principal balance of $19,200 at September 30, 2020.

In April 2020, we entered into a note payable agreement (the PPP Loan Agreement) with Silicon Valley Bank as lender (the Lender), pursuant to which we received net proceeds of $224,400 from a potentially forgivable loan from the U.S. Small Business Administration (SBA) pursuant to the Paycheck Protection Program (PPP) enacted by Congress under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) administered by the SBA (the PPP Loan). The PPP Loan matures on April 22, 2022. The PPP Loan accrues interest at a rate of 1.00% per annum, and interest will continue to accrue throughout the period the PPP Loan is outstanding, or until it is forgiven. Under the CARES Act (including subsequent guidance issued by SBA and U.S. Department of the Treasury related thereto) and the PPP Loan Agreement, payments of both principal and interest are deferred until such time as the SBA remits our loan forgiveness amount to Lender. The CARES Act provides that all or a portion of the PPP Loan may be forgiven upon our request to the Lender, subject to requirements in the PPP Loan Agreement and the CARES Act. We submitted our request for forgiveness of the PPP Loan on September 23, 2020. While we currently believe that the use of the PPP Loan proceeds will meet the conditions for forgiveness under the PPP, there can be no assurance that we will obtain full or partial forgiveness of the loan.

Capital Stock

6 Months Ended

Sep. 30, 2020

Equity [Abstract]

Capital Stock

Common Stock Purchase Agreement with Lincoln Park Capital Fund

On March 24, 2020, we entered into a purchase agreement and a registration rights agreement with Lincoln Park Capital Fund (LPC) pursuant to which LPC committed to purchase up to $10,250,000 of our common stock at market-based prices over a period of 24 months (the LPC Agreement). On March 24, 2020, we sold 500,000 unregistered shares of our common stock (the Initial Purchase Shares) to LPC under the purchase agreement at a price of $0.50 per share for gross cash proceeds of $250,000 (the Initial Purchase) and we also issued 750,000 unregistered shares of our common stock to LPC under the terms of the LPC Agreement for its purchase commitments under the LPC Agreement (the Commitment Shares). To satisfy our obligations under the registration rights agreement associated with the LPC Agreement, we filed a Registration Statement on Form S-1 (the LPC Registration Statement) with the SEC on March 31, 2020 (Registration No. 333-237514), which the SEC declared effective on April 14, 2020 (the Commencement Date). The LPC Registration Statement included registration of the Initial Purchase Shares and the Commitment Shares. The fair value of the Commitment Shares, $284,400, determined based on the quoted closing market price of our common stock on March 24, 2020, is a component of deferred offering costs attributable to this offering, which costs are amortized ratably to additional paid-in capital as we sell shares of our common stock to LPC under the LPC Agreement. Subsequent to the Commencement Date and through September 30, 2020, we have sold an additional 6,301,995 registered shares of our common stock to LPC and received aggregate gross cash proceeds of $2,891,200. At September 30, 2020, there were approximately 2.04 million registered shares of our common stock remaining available for sale under the LPC Agreement; however, we have no obligation to sell any additional shares under the agreement.

On any business day during the term of the LPC Agreement, we have the right, in our sole discretion, to direct LPC to purchase up to 100,000 shares on such business day (the Regular Purchase) (subject to adjustment under certain circumstances as provided in the LPC Agreement). The purchase price per share for each such Regular Purchase will be based on prevailing market prices of our common stock immediately preceding the time of sale as computed under the LPC Agreement. In each case, LPC’s maximum commitment in any single Regular Purchase may not exceed $1,000,000. In addition to Regular Purchases, provided that we present LPC with a purchase notice for the full amount allowed for a Regular Purchase, we may also direct LPC to make accelerated purchases and additional accelerated purchases as described in the LPC Agreement. Although LPC has no right to require us to sell any shares of our common stock to LPC, LPC is obligated to make purchases as we direct, subject to certain conditions. In all instances, we may not sell shares of our common stock to LPC under the LPC Agreement if such sales would result in LPC beneficially owning more than 9.99% of our common stock. There are no upper limits on the price per share that LPC must pay for shares of our common stock.

Sale of Common Stock and Warrants in the Spring 2020 Private Placement

In April 2020, in a self-directed private placement, we sold to an accredited investor units to purchase an aggregate of 125,000 unregistered shares of our common stock and four-year warrants to purchase 125,000 shares of our common stock at an exercise price of $0.50 per share and we received cash proceeds of $50,000 (the Spring 2020 Private Placement).

Registration Statement for shares underlying warrants issued in Private Placements

On May 1, 2020, we filed a registration statement on Form S-3 (Registration No. 333-237968) to register approximately 12.1 million shares of common stock underlying outstanding warrants that we had issued in earlier private placement offerings, including the Spring 2020 Private Placement, as well as common stock underlying warrants that had been previously issued to various consultants as full or partial compensation for their services. Included in the registration statement were shares of our common stock underlying approximately 5.8 million outstanding warrants to purchase shares of our common stock that had been modified in December 2019 to temporarily reduce, for a period of two years or, if sooner, until the expiration of the warrant, the exercise price of such warrants to $0.50 per share, in order to more closely align the exercise price of the warrants with the trading price of our common stock at that time (the Winter 2019 Warrant Modification). We also registered approximately 0.8 million shares of unregistered outstanding common stock held by former holders of warrants who had exercised such warrants subsequent to the Winter 2019 Warrant Modification. Further, we registered the 125,000 shares of common stock issued in the Spring 2020 Private Placement. The SEC declared the registration statement effective on May 13, 2020 (the Warrant Registration Statement). As a result of the effectiveness of this registration statement, the shares of common stock underlying essentially all of our outstanding warrants have been registered. During July 2020, holders of warrants to purchase an aggregate of 228,000 shares of our common stock exercised such warrants, and we received aggregate cash proceeds of $114,000. We issued 228,000 registered shares of our common stock upon these exercises pursuant to the effectiveness of the Warrant Registration Statement.

Registered Public Offering of Common Stock

On August 2, 2020, we entered into an underwriting agreement (the Underwriting Agreement) with Maxim Group, LLC as representative of the underwriters named therein (the Underwriter), pursuant to which we sold to the Underwriter, in an underwritten public offering (the August 2020 Public Offering), an aggregate of 15,625,000 shares (the Shares) of our common stock for a public offering price of $0.80 per Share, resulting in gross proceeds to us of $12,500,000. The August 2020 Public Offering closed on August 5, 2020 at which time we sold the Shares to the Underwriter. Under the terms of the Underwriting Agreement, we granted to the Underwriter a 45-day over-allotment option (the Over-Allotment Option) to purchase up to an additional 2,343,750 Shares (the Option Shares) at a public offering price of $0.80 per share. On August 5, 2020, the Underwriter elected to exercise the Over-Allotment Option with respect to an aggregate of 2,243,250 Option Shares (the Exercised Option Shares). We completed the sale of the Exercised Option Shares on August 7, 2020 and received additional gross proceeds of $1,794,600. After deducting underwriting discounts and commissions and offering expenses payable by us, we received net proceeds of approximately $12.9 million from the sale of the Shares and the Exercised Option Shares.

Warrants Outstanding

The following table summarizes warrants outstanding and exercisable as of September 30, 2020 including the warrants issued in the Spring 2020 Private Placement described above and excluding certain warrants that expired during the quarter ended September 30, 2020. The weighted average exercise price of both outstanding and exercisable warrants at September 30, 2020 is $1.53 per share.

			Warrants		Warrants
Exercise			Outstanding at		Exercisable at
Price		Expiration	September 30,		September 30,
per Share		Date	2020		2020

$	0.50	3/25/2021 to 4/30/2024		7,923,312		7,798,312
$	0.73	7/25/2025		3,870,077		3,870,077
$	0.805	12/31/2022		80,431		80,431
$	1.50	12/13/2022		9,596,200		9,596,200
$	1.82	3/7/2023		1,388,931		1,388,931
$	3.51	12/31/2021		50,000		50,000
$	5.30	5/16/2021		2,705,883		2,705,883
$	7.00	3/3/2023		147,000		147,000

				25,761,834		25,636,834

At September 30, 2020, with the effectiveness of the Warrant Registration Statement in May 2020, the shares of common stock underlying essentially all of the outstanding warrants except those having an exercise price of $7.00 per share have been registered for resale by the warrant holders. Warrants to purchase 125,000 shares of common stock issued in the Spring 2020 Private Placement are exercisable at $0.50 per share and become exercisable on October 24, 2020. Additionally, no outstanding warrant is subject to any down round anti-dilution protection features and all of the outstanding warrants are exercisable by the holders only by payment in cash of the stated exercise price per share.

Related Party Transactions

6 Months Ended

Sep. 30, 2020

Related Party Transactions

Contract Research and Development Agreement with Cato Research Ltd.

Cato Holding Company (CHC), doing business as Cato BioVentures (CBV), was the parent of Cato Research Ltd. (CRL), now known as Cato Research LLC. CRL is a contract research, development and regulatory services organization (CRO) that we have in the past, and continue to engage for a wide range of material aspects related to the nonclinical and clinical development, manufacturing and regulatory affairs associated with our efforts to develop and commercialize PH94B, PH10, AV-101. In October 2018, CHC completed the sale of CRL to an independent third party. As a result of this transaction, CHC and/or CBV is no longer affiliated with or has any control over CRL. Prior to the sale of CRL, CBV held shares of our common stock and at September 30 2020, CBV held approximately 1.3% of our outstanding common stock.

In July 2017, we entered into a Master Services Agreement (MSA) with CRL, which replaced a substantially similar May 2007 master services agreement, pursuant to which CRL may assist us in the evaluation, development, commercialization and marketing of our potential product candidates, and provide regulatory and strategic consulting services as requested from time to time. Specific projects or services are and will be delineated in individual work orders negotiated from time-to-time under the MSA. Under the terms of work orders issued pursuant to the July 2017 MSA, we incurred expenses of $273,700 and $1,610,900 during the quarters ended September 30, 2020 and 2019, respectively and $398,600 and $3,016,000 for the six months ended September 30, 2020 and 2019, respectively. At September 30, 2020 and March 31, 2020, we had recorded accounts payable and accrued expenses related to CRL aggregating $116,100 and $578,800, respectively. We anticipate periodic expenses for CRO services from CRL related to nonclinical and clinical development of, and regulatory affairs related to PH94B, PH10, AV-101 and other potential product candidates will remain significant in future periods.

License and Option Agreements with Pherin Pharmaceuticals, Inc.

During our fiscal year ended March 31, 2019, we issued an aggregate of 2,556,361 shares of our unregistered common stock having an issue-date fair market value of $4,250,000 to Pherin to acquire exclusive worldwide licenses to develop and commercialize PH94B and PH10. We recorded the acquisition of the licenses as research and development expense during our fiscal year ended March 31, 2019. We recorded no expense during the quarter ended September 30, 2020 and $30,000 during the quarter ended September 30, 2019, and $10,000 and $60,000, for the six months ended September 30, 2020 and 2019, respectively, as research and development expense for monthly support payments to Pherin under the terms of the PH94B and PH10 license agreements. Our liability for such monthly support payments terminated in April 2020 under the terms of the PH10 license agreement. During the quarter ended September 30, 2020, under the terms of the PH94B license agreement we made a milestone payment of $220,000 to Pherin related to the upfront payment received under the EverInsight Agreement. The payment is included as a component of Deferred Contract Acquisition Costs on the Condensed Consolidated Balance Sheet at September 30, 2020. We recorded no amounts payable to Pherin at September 30, 2020 or March 31, 2020. At September 30, 2020, Pherin held approximately 1.8% of our outstanding common stock.

Consulting Agreement

During the quarters ended September 30, 2020 and 2019, we engaged a consulting firm headed by one of the independent members of our Board to provide various market research studies, competitive analyses, and commercial advisory projects for certain of our CNS pipeline candidates pursuant to which we recorded research and development expense of $13,000 and $75,100 for the quarters ended September 30, 2020 and 2019, respectively and $28,000 and $102,800 for the six months ended September 30, 2020 and 2019, respectively. We recorded accounts payable and accrued expenses of $13,000 at September 30, 2020 and no amounts payable at March 31, 2020 related to these projects and services.

Commitments and Contingencies

6 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

We lease our headquarters office and laboratory space in South San Francisco, California under the terms of a lease that expires on July 31, 2022 and that provides an option to renew for an additional five years at then-current market rates. Consistent with the guidance in Accounting Standards Codification Topic 842, Leases (ASC 842), beginning April 1, 2019, we recorded this lease in our Condensed Consolidated Balance Sheet as an operating lease. For the purpose of determining the right-of-use asset and associated lease liability, we determined that the renewal of this lease is reasonably probable. The lease of our South San Francisco facilities does not include any restrictions or covenants requiring special treatment under ASC 842.

The following table summarizes the presentation of the operating lease in our Condensed Consolidated Balance Sheet at September 30, 2020 and March 31, 2020:

	As of September 30, 2020		As of March 31, 2020
Assets
Right of use asset – operating lease	$	3,403,000	$	3,579,600

Liabilities
Current operating lease obligation	$	338,500	$	313,400
Non-current operating lease obligation		3,540,900		3,715,600
Total operating lease liability	$	3,879,400	$	4,029,000

The following table summarizes the effect of operating lease costs in the Company’s condensed consolidated statements of operations for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2020		2019		2020		2019

Operating lease cost	$	207,300	$	203,100	$	420,100	$	411,900

The minimum (base rental) lease payments related to our South San Francisco operating lease are expected to be as follows:

Fiscal Years Ending March 31,
2021 (remaining six months)	$	326,600
2022		668,400
2023		726,000
2024		766,000
2025		789,000
Thereafter		1,931,400
Total lease expense		5,207,400
Less imputed interest		(1,328,000	)
Present value of operating lease liabilities	$	3,879,400

The remaining lease term, including the assumed five-year extension at the expiration of the current lease period, and the discount rate assumption for our South San Francisco operating lease is as follows:

		As of September 30, 2020
Assumed remaining lease term in years		6.83
Assumed discount rate		8.54%

The interest rate implicit in lease contracts is typically not readily determinable and, as such, we used our estimated incremental borrowing rate based on information available at the adoption of ASC 842, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

Supplemental disclosure of cash flow information related to our operating lease included in cash flows used by operating activities in the condensed consolidated statements of cash flows is as follows:

	For the Six Months Ended		For the Six Months Ended
	September 30, 2020		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	393,100	$	374,200

During the six months ended September 30, 2020, we recorded no new right of use assets arising from new lease liabilities.

We also lease a small office in the San Francisco Bay Area under a month-to-month arrangement at insignificant cost and have made an accounting policy election not to apply the ASC 842 operating lease recognition requirements to such short-term lease. We recognize the lease payments for this lease in general and administrative expense over the lease term. We recorded rent expense of $3,500 for each of the three month periods ended September 30, 2020 and 2019, respectively, and $7,100 and $6,900 for the six months ended September 30, 2020 and 2019, respectively, attributable to this lease.

Sublicensing and Collaborative Agreements

6 Months Ended

Sep. 30, 2020

Sublicensing And Collaborative Agreements

Sublicensing and Collaborative Agreements

PH94B Sublicense Agreement with EverInsight

On June 24, 2020, we entered into a license and collaboration agreement (the EverInsight Agreement) with EverInsight Therapeutics Inc., a company incorporated under the laws of the British Virgin Islands and funded by CBC Group, a global healthcare-focused venture capital firm (EverInsight). In October 2020, it was announced that EverInsight is to merge with AffaMed Therapeutics, also funded by CBC Group, which as a combined, complementary entity will focus on developing and commercializing therapeutics to address ophthalmologic and CNS disorders in Greater China and beyond. Under the EverInsight Agreement, we granted EverInsight an exclusive license to develop and commercialize PH94B, our neuroactive pherin drug candidate for SAD and other anxiety-related disorders, in Greater China (which includes Mainland China, Hong Kong, Macau and Taiwan), South Korea and Southeast Asia (which includes Indonesia, Malaysia, Philippines, Thailand and Vietnam) (collectively, the Territory). We retain exclusive development and commercialization rights for PH94B in the rest of the world.

Under the terms of the EverInsight Agreement, EverInsight is be responsible for all costs related to developing, obtaining regulatory approval of, and commercializing PH94B for treatment of SAD, and potentially other anxiety-related indications, in the Territory. A joint development committee has been established between us and EverInsight to coordinate and review the development and commercialization plans with respect to PH94B in the Territory.

We are responsible for pursuing clinical development and regulatory submissions of PH94B for acute treatment of anxiety in adults with SAD, and potentially other anxiety-related indications, in the United States on a ‘‘best efforts’’ basis, with no guarantee of success. EverInsight has the option to participate in the global Phase 3 clinical trial of PH94B and will assume all direct costs and expenses of conducting such clinical trial in the Territory and a portion of the indirect costs of the global trial. We will transfer all development data (nonclinical and clinical data) and our regulatory documentation related to PH94B throughout the term as it is developed or generated or otherwise comes into our control. We will grant to EverInsight a Right of Reference to all of our regulatory documentation and our development data.

Under the terms of the EverInsight Agreement, EverInsight agreed to pay us a non-refundable upfront license payment of $5.0 million within 30 business days of the effective date of the EverInsight Agreement, and EverInsight paid the $5 million in August 2020. Additionally, upon successful development and commercialization of PH94B in the Territory, we are eligible to receive milestone payments of up to $172.0 million. Further, we are eligible to receive royalty payments on a country-by-country basis on net sales for the later of ten years or the expiration of market or regulatory exclusivity in the jurisdiction, except that payments will be reduced on a country-by-country basis in the event that there is no market exclusivity in the period. Royalty payments may also be reduced if there is generic competitive product in the period.

We have determined that we have one combined performance obligation for the license to develop and commercialize PH94B in the Territory and related development and regulatory services. In addition, EverInsight has an option that will create manufacturing obligations for us during development upon exercise by EverInsight. This option for manufacturing services was evaluated and determined not to include a material right.

Development and commercialization milestones were not considered probable at inception and are therefore were excluded from the initial transaction price. The royalties were excluded from the initial transaction price because they relate to a license of intellectual property and are subject to the royalty constraint.

We recognize revenue as the combined performance obligation is satisfied over time using an output method. The measure of progress is stand-ready straight-line over the period in which we expect to perform the services related to the license of PH94B.

During the three and six months ended September 30, 2020, we have recognized $334,000 as sublicense revenue under the EverInsight Agreement. At September 30, 2020, the aggregate amount of the transaction price allocated to the remaining performance obligation is $4,666,000 which will be recognized as revenue as the services are completed, which is expected to occur over a period of approximately four years beginning with the quarter ended September 30, 2020.

Unless earlier terminated due to certain material breaches of the contract, or otherwise, the EverInsight Agreement will expire on a jurisdiction-by-jurisdiction basis until the latest to occur of expiration of the last valid claim under a licensed patent of PH94B in such jurisdiction, the expiration of regulatory exclusivity in such jurisdiction or ten years after the first commercial sale of PH94B in such jurisdiction.

BlueRock Therapeutics Sublicense Agreement

In December 2016, we entered into an Exclusive License and Sublicense Agreement with BlueRock Therapeutics, LP, a next generation regenerative medicine company established by Bayer AG and Versant Ventures (BlueRock Therapeutics), pursuant to which BlueRock Therapeutics received exclusive rights to utilize certain technologies exclusively licensed by us from University Health Network (UHN) for the production of cardiac stem cells for the treatment of heart disease. As a result of its acquisition of BlueRock Therapeutics in 2019, Bayer AG now holds the rights to develop and commercialize our hPSC technologies relating to the production of heart cells for the treatment of heart disease (the Bayer Agreement). We retained rights to cardiac stem cell technology licensed from UHN related to small molecule, protein and antibody drug discovery, drug rescue and drug development, including small molecules with cardiac regenerative potential, as well as small molecule, protein and antibody testing involving cardiac cells. To date, we have recognized $1.25 million in sublicense revenue, in our fiscal year ended March 31, 2017, under the Bayer Agreement.

Subsequent Events

6 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

We have evaluated subsequent events through the date of this Report and have identified the following matters requiring disclosure:

Grant of Options from 2019 Plan

During October 2020, we granted options to a consultant to purchase 75,000 shares of our common stock under the terms of our 2019 Plan as compensation for certain corporate awareness and advisory services. The options have an exercise price equal to the quoted closing market price of our common stock on the Nasdaq Capital Market on the date of grant, a term of ten years and vest ratably over a period of twelve months.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Use of Estimates

Revenue Recognition

Performance Obligations

Transaction Price

Allocation of Consideration

Timing of Recognition

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Revenue - current portion	$	—	$	1,244,000	$	—		$	1,244,000
Deferred Revenue - non-current portion		—		3,756,000		(334,000	)		3,422,000
Total	$	—	$	5,000,000	$	(334,000	)	$	4,666,000

During the three and six months ended September 30, 2020 and 2019, we recognized the following revenue:

	Three and Six Months Ended September 30,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period:
Performance obligations satisfied	$	-	$	-
New activities in the period:
Performance obligations satisfied		334,000		-

	$	334,000	$	-

Contract Acquisition Costs

The following table summarizes our contract acquisition costs for the six months ended September 30, 2020.

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Contract Acquisition Costs - current portion	$	—	$	116,900	$	—		$	116,900
Deferred Contract Acquisition Costs - non-current portion		—		353,100		(31,400	)		321,700
Total	$	—	$	470,000	$	(31,400	)	$	438,600

Research and Development Expenses

Stock-Based Compensation

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019

Research and development expense	$	122,400	$	167,500	$	349,000	$	558,100

General and administrative expense		288,500		226,000		736,500		898,400


Total stock-based compensation expense	$	410,900	$	393,500	$	1,085,500	$	1,456,500

	Three Months Ended September 30, 2020					Six Months Ended September 30, 2020
Assumption:	Weighted Average			Range		Weighted Average			Range
Market price per share at grant date	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Exercise price per share	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Risk-free interest rate		0.31	%	0.26% to 0.33%			0.38	%	0.35% to 0.44%
Expected term in years		5.49		5.20 to 5.58			5.36		5.20 to 5.94
Volatility		84.71	%	84.55% to 85.32%			84.14	%	82.93% to 85.85%
Dividend rate		0.0	%		0.0%		0.0	%			0.0%
Shares		120,000					2,065,000

Fair Value per share	$	0.46				$	0.29

Leases, Right-of- Use Assets and Lease Liabilities

Comprehensive Loss

We have no components of other comprehensive loss other than net loss, and accordingly our comprehensive loss is equivalent to our net loss for the periods presented.

Loss per Common Share

	At September 30,		At March 31,
	2020		2020

Series A Preferred stock issued and outstanding (1)		750,000		750,000

Series B Preferred stock issued and outstanding (2)		1,160,240		1,160,240

Series C Preferred stock issued and outstanding (3)		2,318,012		2,318,012

Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan		12,068,088		10,003,088

Outstanding warrants to purchase common stock		25,761,834		26,555,281



Total		42,058,174		40,786,621

____________

(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended

(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016

Fair Value Measurements

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Changes in the contract liabilities

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Revenue - current portion	$	-	$	1,244,000	$	-		$	1,244,000
Deferred Revenue - non-current portion		-		3,756,000		(334,000	)		3,422,000
Total	$	-	$	5,000,000	$	(334,000	)	$	4,666,000

Recognition of revenue

	Three and Six Months Ended September 30,
	2020		2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period:
Performance obligations satisfied	$	-	$	-
New activities in the period:
Performance obligations satisfied		334,000		-

	$	334,000	$	-

Summary of contract acquisition costs

	Balance at							Balance at
	March 31, 2020		Additions		Deductions			September 30, 2020
Deferred Contract Acquisition Costs - current portion	$	-	$	116,900	$	-		$	116,900
Deferred Contract Acquisition Costs - non-current portion		-		353,100		(31,400	)		321,700
Total	$	-	$	470,000	$	(31,400	)	$	438,600

Summary of stock-based compensation expense

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019

Research and development expense	$	122,400	$	167,500	$	349,000	$	558,100

General and administrative expense		288,500		226,000		736,500		898,400


Total stock-based compensation expense	$	410,900	$	393,500	$	1,085,500	$	1,456,500

Fair value assumptions

	Three Months Ended September 30, 2020					Six Months Ended September 30, 2020
Assumption:	Weighted Average			Range		Weighted Average			Range
Market price per share at grant date	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Exercise price per share	$	0.67		$	0.62 to 0.73	$	0.43		$	0.40 to 0.73
Risk-free interest rate		0.31	%	0.26% to 0.33%			0.38	%	0.35% to 0.44%
Expected term in years		5.49		5.20 to 5.58			5.36		5.20 to 5.94
Volatility		84.71	%	84.55% to 85.32%			84.14	%	82.93% to 85.85%
Dividend rate		0.0	%		0.0%		0.0	%			0.0%
Shares		120,000					2,065,000

Fair Value per share	$	0.46				$	0.29

Schedule of potentially dilutive securities excluded from computation of earnings per share

	At September 30,		At March 31,
	2020		2020

Series A Preferred stock issued and outstanding (1)		750,000		750,000

Series B Preferred stock issued and outstanding (2)		1,160,240		1,160,240

Series C Preferred stock issued and outstanding (3)		2,318,012		2,318,012

Outstanding options under the Company's Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan		12,068,088		10,003,088

Outstanding warrants to purchase common stock		25,761,834		26,555,281



Total		42,058,174		40,786,621

____________

(1) Assumes exchange under the terms of the October 11, 2012 Note Exchange and Purchase Agreement, as amended

(2) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series B 10% Convertible Preferred Stock, effective May 5, 2015; excludes shares of unegistered common stock issuable in payment of dividends on Series B Preferred upon conversion

(3) Assumes exchange under the terms of the Certificate of Designation of the Relative Rights and Preferences of the Series C Convertible Preferred Stock, effective January 25, 2016

Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Sep. 30, 2020

Other Assets [Abstract]

Prepaid expenses and other current assets

	September 30,		March 31,
	2020		2020

Clinical and nonclinical materials and contract services	$	174,000	$	115,200
Insurance		277,800		107,200
All other		3,900		2,700

	$	455,700	$	225,100

Property and Equipment (Tables)

6 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and equipment

	September 30,			March 31,
	2020			2020

Laboratory equipment	$	892,500		$	892,500
Tenant improvements		214,400			214,400
Computers and network equipment		57,100			54,600
Office furniture and equipment		84,600			84,600
Construction in progress		96,400			—
		1,345,000			1,246,100

Accumulated depreciation and amortization		(1,087,400	)		(1,036,500	)

Property and equipment, net	$	257,600		$	209,600

	September 30,			March 31,
	2020			2020

Office equipment subject to financing lease	$	14,700		$	14,700
Accumulated depreciation		(10,900	)		(9,400	)

Net book value of office equipment subject to
financing lease	$	3,800		$	5,300

Accrued Expenses (Tables)

6 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accrued expenses

	September 30,		March 31,
	2020		2020

Accrued expenses for clinical and nonclinical
materials, development and contract services	$	92,300	$	462,300
Accrued professional services		78,200		76,500
All other		16,400		22,700

	$	186,900	$	561,500

Notes Payable (Tables)

6 Months Ended

Sep. 30, 2020

Notes Payable [Abstract]

Notes payable

	September 30, 2020									March 31, 2020
	Principal			Accrued						Principal		Accrued
	Balance			Interest			Total			Balance		Interest		Total

7.30% and 6.30% Notes payable
to insurance premium financing company (current)	$	214,500		$	-		$	214,500		$	56,500	$	-	$	56,500


1% Note payable under Paycheck Protection Program		224,400			1,000			225,400			-		-		-
less: current portion		(137,100	)		(1,000	)		(138,100	)		-		-		-

Non-current portion	$	87,300		$	-		$	87,300		$	-	$	-	$	-

Total current notes payable	$	351,600		$	1,000		$	352,600		$	56,500	$	-	$	56,500

Capital Stock (Tables)

6 Months Ended

Sep. 30, 2020

Equity [Abstract]

Warrants outstanding

			Warrants		Warrants
Exercise			Outstanding at		Exercisable at
Price		Expiration	September 30,		September 30,
per Share		Date	2020		2020

$	0.50	3/25/2021 to 4/30/2024		7,923,312		7,798,312
$	0.73	7/25/2025		3,870,077		3,870,077
$	0.805	12/31/2022		80,431		80,431
$	1.50	12/13/2022		9,596,200		9,596,200
$	1.82	3/7/2023		1,388,931		1,388,931
$	3.51	12/31/2021		50,000		50,000
$	5.30	5/16/2021		2,705,883		2,705,883
$	7.00	3/3/2023		147,000		147,000

				25,761,834		25,636,834

Commitments and Contingencies (Tables)

6 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Presentation of operating lease

	As of September 30, 2020		As of March 31, 2020
Assets
Right of use asset – operating lease	$	3,403,000	$	3,579,600

Liabilities
Current operating lease obligation	$	338,500	$	313,400
Non-current operating lease obligation		3,540,900		3,715,600
Total operating lease liability	$	3,879,400	$	4,029,000

Operating lease costs

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2020		2019		2020		2019

Operating lease cost	$	207,300	$	203,100	$	420,100	$	411,900

Expected lease expense

Fiscal Years Ending March 31,
2021 (remaining six months)	$	326,600
2022		668,400
2023		726,000
2024		766,000
2025		789,000
Thereafter		1,931,400
Total lease expense		5,207,400
Less imputed interest		(1,328,000	)
Present value of operating lease liabilities	$	3,879,400

Other lease disclosure

		As of September 30, 2020
Assumed remaining lease term in years		6.83
Assumed discount rate		8.54%

Supplemental disclosure of cash flow information

	For the Six Months Ended		For the Six Months Ended
	September 30, 2020		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities	$	393,100	$	374,200

Basis of Presentation (Details Narrative) - USD ($)	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit during its development stage	$ (208,332,000)	$ (201,907,400)
Cash and cash equivalents	$ 15,399,500	$ 1,355,100	$ 4,072,400	$ 13,100,300

Summary of Significant Accounting Policies (Details)	6 Months Ended
Summary of Significant Accounting Policies (Details)	Sep. 30, 2020 USD ($)
Contract Liabilities: Deferred Revenue, Beginning	$ 0
Additions	5,000,000
Deductions	(334,000)
Contract Liabilities: Deferred Revenue, Ending	4,666,000
Contract Liabilities Current
Contract Liabilities: Deferred Revenue, Beginning	0
Additions	1,244,000
Deductions	0
Contract Liabilities: Deferred Revenue, Ending	1,244,000
Contract Liabilities Non-Current
Contract Liabilities: Deferred Revenue, Beginning	0
Additions	3,756,000
Deductions	(334,000)
Contract Liabilities: Deferred Revenue, Ending	$ 3,422,000

Summary of Significant Accounting Policies (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period: Performance obligations satisfied			$ 0	$ 0
New activities in the period: Performance obligations satisfied	$ 334,000	$ 0	334,000	0
Total Revenue	$ 334,000	$ 0	$ 334,000	$ 0

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(1))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

+ Details

Summary of Significant Accounting Policies (Details 2)	6 Months Ended
Summary of Significant Accounting Policies (Details 2)	Sep. 30, 2020 USD ($)
Deferred Contract Acquisition Costs - Beginning	$ 0
Additions	470,000
Deductions	(31,400)
Deferred Contract Acquisition Costs - Ending	438,600
Deferred Contract Acquisition Costs: Current
Deferred Contract Acquisition Costs - Beginning	0
Additions	116,900
Deductions	0
Deferred Contract Acquisition Costs - Ending	116,900
Deferred Contract Acquisition Costs: Non Current
Deferred Contract Acquisition Costs - Beginning	0
Additions	353,100
Deductions	(31,400)
Deferred Contract Acquisition Costs - Ending	$ 321,700

Summary of Significant Accounting Policies (Details 3) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock option expense	$ 410,900	$ 393,500	$ 1,085,500	$ 1,456,500
Research and Development Expense
Stock option expense	122,400	167,500	349,000	558,100
General and Administrative Expense
Stock option expense	$ 288,500	$ 226,000	$ 736,500	$ 898,400

Summary of Significant Accounting Policies (Details 4) - 2019 Plan	3 Months Ended	6 Months Ended
	Sep. 30, 2020 $ / shares shares	Sep. 30, 2020 $ / shares shares
Market price per share at grant date	$ 0.67	$ 0.43
Exercise price per share	$ 0.67	$ 0.43
Risk-free interest rate	0.31%	0.38%
Estimated term in years	5 years 5 months 26 days	5 years 4 months 10 days
Volatility	84.71%	84.14%
Dividend rate	0.00%	0.00%
Shares \| shares	120,000	120,000
Fair value per share	$ 0.46	$ 0.29
Minimum
Market price per share at grant date	0.62	0.40
Exercise price per share	$ 0.62	$ 0.40
Risk-free interest rate	0.26%	0.35%
Estimated term in years	5 years 2 months 12 days	5 years 2 months 12 days
Volatility	84.55%	82.93%
Maximum
Market price per share at grant date	$ 0.73	$ 0.73
Exercise price per share	$ 0.73	$ 0.73
Risk-free interest rate	0.33%	0.44%
Estimated term in years	5 years 6 months 29 days	5 years 11 months 8 days
Volatility	85.32%	85.85%

Summary of Significant Accounting Policies (Details 5) - shares	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Antidilutive securities	42,058,174	40,786,621
Series A Preferred Stock
Antidilutive securities	750,000	750,000
Series B Preferred Stock
Antidilutive securities	1,160,240	1,160,240
Series C Preferred Stock
Antidilutive securities	2,318,012	2,318,012
Amended and Restated 2016 (formerly 2008) Stock Incentive Plan and 2019 Omnibus Equity Incentive Plan
Antidilutive securities	12,068,088	10,003,088
Warrant
Antidilutive securities	25,761,834	26,555,281

Prepaid Expenses and Other Current Assets (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Other Assets [Abstract]
Clinical and nonclinical materials and contract services	$ 174,000	$ 115,200
Insurance	277,800	107,200
All other	3,900	2,700
Total	$ 455,700	$ 225,100

Property and Equipment (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Property and equipment, gross	$ 1,345,000	$ 1,246,100
Accumulated depreciation and amortization	(1,087,400)	(1,036,500)
Property and equipment, net	257,600	209,600
Laboratory Equipment
Property and equipment, gross	892,500	892,500
Tenant Improvements
Property and equipment, gross	214,400	214,400
Computers and Network Equipment
Property and equipment, gross	57,100	54,600
Office Furniture And Equipment
Property and equipment, gross	84,600	84,600
Construction in progress
Property and equipment, gross	$ 96,400	$ 0

Property and Equipment (Details 1) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Property And Equipment
Office equipment subject to financing lease	$ 14,700	$ 14,700
Accumulated depreciation	(10,900)	(9,400)
Net book value of office equipment subject to financing lease	$ 3,800	$ 5,300

Accrued Expenses (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Payables and Accruals [Abstract]
Accrued expenses for clinical and nonclinical materials, development and contract services	$ 92,300	$ 462,300
Accrued professional services	78,200	75,600
All other	16,400	22,700
Total	$ 186,900	$ 561,500

Notes Payable (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Principal balance	$ 438,900	$ 56,500
Accrued interest	1,000	0
Total	439,900	56,500
Current portion	352,600	0
Non-current portion	87,300	0
Notes Payable 1
Principal balance	214,500	56,500
Accrued interest	0	0
Total	214,500	56,500
Notes Payable 2
Principal balance	224,400	0
Accrued interest	1,000	0
Total	225,400	$ 0
Current portion	138,100
Non-current portion	$ 87,300

Capital Stock (Details)	6 Months Ended
Capital Stock (Details)	Sep. 30, 2020 $ / shares shares
Warrants outstanding	25,761,834
Warrants exercisable	25,636,834
Warrant 1
Average per share \| $ / shares	$ 0.50
Expiration date range	3/25/2021 to 4/30/2024
Warrants outstanding	7,923,312
Warrants exercisable	7,798,312
Warrant 2
Average per share \| $ / shares	$ 0.73
Expiration date range	7/25/2025
Warrants outstanding	3,870,077
Warrants exercisable	3,870,077
Warrant 3
Average per share \| $ / shares	$ 0.805
Expiration date range	12/31/2022
Warrants outstanding	80,431
Warrants exercisable	80,431
Warrant 4
Average per share \| $ / shares	$ 1.50
Expiration date range	12/13/2022
Warrants outstanding	9,596,200
Warrants exercisable	9,596,200
Warrant 5
Average per share \| $ / shares	$ 1.82
Expiration date range	3/7/2023
Warrants outstanding	1,388,931
Warrants exercisable	1,388,931
Warrant 6
Average per share \| $ / shares	$ 3.51
Expiration date range	12/31/2021
Warrants outstanding	50,000
Warrants exercisable	50,000
Warrant 7
Average per share \| $ / shares	$ 5.30
Expiration date range	5/16/2021
Warrants outstanding	2,705,883
Warrants exercisable	2,705,883
Warrant 8
Average per share \| $ / shares	$ 7.00
Expiration date range	3/3/2023
Warrants outstanding	147,000
Warrants exercisable	147,000

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Cato Research Ltd.
Related party expense	$ 273,700	$ 1,610,900	$ 398,600	$ 3,016,000
Accounts payable and accrued expenses	116,100		116,100		$ 578,800
Pherin Pharmaceuticals, Inc.
Accounts payable and accrued expenses	0		0		0
Consulting Agreement
Research and development expense	13,000	$ 75,100	28,000	$ 102,800
Accounts payable and accrued expenses	$ 13,000		$ 13,000		$ 0

Commitments and Contingencies (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Assets
Right of use asset - operating lease	$ 3,403,000	$ 3,579,600
Liabilities
Current operating lease obligation	338,500	313,400
Non-current operating lease obligation	3,540,900	3,715,600
Total operating lease liability	$ 3,879,400	$ 4,029,000

Commitments and Contingencies (Details 1) - USD ($)	3 Months Ended		6 Months Ended
Commitments and Contingencies (Details 1) - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 207,300	$ 203,100	$ 420,100	$ 411,900

Commitments and Contingencies (Details 2) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
2021 (remaining six months)	$ 326,600
2022	668,400
2023	766,000
2024	766,000
2025	789,000
Thereafter	1,931,400
Total lease expense	5,207,400
Less imputed interest	(1,328,000)
Present value of operating lease liabilities	$ 3,879,400	$ 4,029,000

Commitments and Contingencies (Details 3)	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Assumed remaining lease term in years	6 years 9 months 29 days
Assumed discount rate	8.54%

Commitments and Contingencies (Details 4) - USD ($)	6 Months Ended
Commitments and Contingencies (Details 4) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 393,100	$ 374,200

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 3,500	$ 3,500	$ 7,100	$ 6,900