Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

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Related Party Transactions
9 Months Ended
Dec. 31, 2012
Notes to Financial Statements  
NOTE 11 - Related Party Transactions

Cato Holding Company, doing business as Cato BioVentures ("CBV"), the parent of CRL, is the Company’s second largest institutional stockholder. Pursuant to a loan agreement dated as of February 3, 2004 between CBV and VistaGen, as amended, CBV extended to the Company a $400,000 revolving line of credit. As of April 29, 2011, the outstanding balance under the line of credit agreement was terminated and the Company issued to CHC an unsecured promissory note in the principal amount of $352,273 (the “2011 CHC Note”), which principal amount included the $242,273 outstanding balance on the line of credit as of April 29, 2011, and $105,000 of indebtedness owed to CBV under an August 2010 Short-Term Note. As described in Note 7, Convertible Promissory Notes and Other Notes Payable, in October 2012, the 2011 CHC Note was cancelled and exchanged for the 2012 CHC Note and the CHC Warrant. The 2012 CHC Note bears interest at the rate of 7.5% compounded monthly and is payable in monthly installments of $10,000 beginning November 1, 2012 until the balance is paid in full, with the final monthly payment to be made in the amount equal to the then current outstanding balance of principal and interest due under the 2012 Cato Note. Total interest expense on notes payable to CHC was $34,700 and $51,400 in the three month and nine month periods ended December 31, 2012, respectively, and $9,000 and $85,000 in the three month and nine month periods ended December 31, 2011, respectively.

 

During fiscal year 2007, the Company entered into a contract research organization arrangement with CRL related to the development of its lead drug candidate, AV-101, and subsequent other projects under which the Company incurred expenses of $124,700 and $639,300 in the three month and nine month periods ended December 31, 2012, respectively, and $360,000 and $1,019,000 in the three month and nine month periods ended December 31, 2011, respectively. As described in Note 7, Convertible Promissory Notes and Other Notes Payable, in October 2012, the Company issued to CRL (i) the CRL Note as payment in full for all contract research and development services and regulatory advice (“CRO Services”) rendered by CRL to the Company and its affiliates through December 31, 2012 with respect to the preclinical and clinical development of AV-101, and (ii) the CRL Warrant. The principal amount of the CRL Note may, at the Company’s option, be automatically increased as a result of future CRO Services rendered by CRL to the Company and its affiliates from January 1, 2013 to June 30, 2013. The CRL Note accrues interest at a rate of 7.5% compounded monthly, is due and payable on March 31, 2016 and is payable solely by CRL's surrender from time to time of all or a portion of the principal and interest balance due on the CRL Note in connection with its concurrent exercise of the CRL Warrant. Total interest expense on the CRL Note for the three and nine month periods ended December 31, 2012 was $26,300.