11. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

We have had the following material changes to our contractual obligations and commitments outside the ordinary course of business during the fiscal year ended March 31, 2020:

On March 17, 2020, we entered into an Amended and Restated Executive Employment Agreement, or the Amended Agreement, for Timothy C. Rodell, M.D., FCCP, or Executive, dated March 17, 2020, by and between the Company and Executive. This Amended Agreement supersedes and replaces Executive’s current Executive Employment Agreement with the Company, dated December 10, 2018, or Prior Agreement.

The Amended Agreement updated the Prior Agreement to set forth (i) Executive’s base salary for calendar year 2020, previously approved by the Company, of $430,000 per year; (ii) Executive’s title of Chief Executive Officer; (iii) Executive’s eligibility to participate in and receive additional stock option or equity award grants under the Company’s equity incentive plans from time to time, in the discretion of the Board or the Compensation Committee, and in accordance with the terms and conditions of such plans; and (iv) severance payments in the event that Executive’s employment is terminated by the Company for any reason other than Cause (as defined in the Amended Agreement) or if it is terminated by Executive for Good Reason (as defined in the Amended Agreement).

LEASE COMMITMENTS

We currently lease approximately 2,600 square feet of executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, California 92123 under a 39-month gross plus utilities lease that commenced on December 1, 2014 and expires on August 31, 2021 the “Granite Ridge Lease.” The current rental rate under the lease extension is $8,265 per month. We believe this leased facility will be satisfactory for our office needs over the term of the lease.

We also rent approximately 1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121 at the rate of $4,700 per month on a one-year lease that originally was to expire on November 30, 2019. In October 2019, we entered into a lease extension for an additional twelve months running from December 1, 2019 through November 30, 2020, at the rate of $5,961 per month.

Rent expense, which is included in general and administrative expenses, approximated $178,000 and $169,000 for the fiscal years ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, our commitments under the lease agreements are as follows:

	2021		2022		Totals
9635 Granite Ridge Drive, Suite 100, San Diego, CA 92123 office lease	$	102,074	$	43,670	$	145,744
11585 Sorrento Valley Road, Suite 109, San Diego, CA 92121 office lease		47,684		–		47,684
Total Lease Commitments	$	149,758	$	43,670	$	193,428

LEGAL MATTERS

From time to time, claims are made against us in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more products or engaging in other activities.

The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on our results of operations for that period or future periods. We are not presently a party to any pending or threatened legal proceedings.