10-Q: Quarterly report [Sections 13 or 15(d)]
Published on November 12, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from _____to_____
COMMISSION FILE NUMBER
Aethlon Medical, Inc.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
|
TITLE OF EACH CLASS |
TRADING SYMBOL |
NAME OF EACH EXCHANGE ON WHICH REGISTERED |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated Filer ☐ | Accelerated Filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 10, 2025, the registrant had outstanding shares of common stock, $0.001 par value.
TABLE OF CONTENTS
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CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the safe harbor created by those sections.
We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Such statements, include, but are not limited to, statements contained in this Quarterly Report relating to our business, business strategy, products and services we may offer in the future, the timing and results of future clinical trials, and capital outlook, successful completion of our clinical trials, our ability to raise additional capital, our ability to maintain our Nasdaq listing, U.S. Food and Drug Administration, or FDA, approval of our products candidates, our ability to comply with changing government regulations, patent protection of our proprietary technology, product liability exposure, uncertainty of market acceptance, competition, technological change, and other risk factors detailed herein and in other of our filings with the Securities and Exchange Commission, or the SEC. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statement of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward looking statements include, but are not limited to, a decline in general economic conditions nationally and internationally, the ability to protect our intellectual property rights, competition from other providers and products, risks in product development, inability to raise capital to fund continuing operations, changes in government regulation, the impact of the government shutdown, and other factors (including the risks contained in Item 1A of our most recent Annual Report on Form 10-K under the heading “Risk Factors”) relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, we undertake no obligation to and do not intend to update any of the forward-looking statements to conform these statements to actual results.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AETHLON MEDICAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2025 | March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Australian Research and Development Tax Incentive receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use asset | ||||||||
| Patents, net | ||||||||
| Restricted cash | ||||||||
| Deposits | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Due to related parties | ||||||||
| Operating lease liability, current portion | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liability, less current portion | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, par value $ per share; shares authorized as of September 30, 2025 and March 31, 2025; shares issued and outstanding as of September 30, 2025 and shares issued and outstanding at March 31, 2025. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AETHLON MEDICAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Month Periods Ended September
30, 2025 and 2024
(Unaudited)
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | Six Months Ended September 30, 2025 | Six Months Ended September 30, 2024 | |||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Professional fees | $ | $ | $ | $ | ||||||||||||
| Payroll and related expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| OPERATING LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| INTEREST INCOME, NET | ||||||||||||||||
| NET LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER COMPREHENSIVE (LOSS) INCOME | ( | ) | ( | ) | ||||||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted loss per share attributable to common stockholders | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding – basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AETHLON MEDICAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY
For the Three and Six Months Ended September 30,
2025 and 2024
(Unaudited)
| COMMON STOCK | ADDITIONAL PAID IN | ACCUMULATED | ACCUMULATED COMPREHENSIVE | TOTAL | ||||||||||||||||||||
| SHARES | AMOUNT | CAPITAL | DEFICIT | INCOME (LOSS) | EQUITY | |||||||||||||||||||
| BALANCE – MARCH 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of common shares upon vesting of restricted stock units and net stock option exercises | ( | ) | ( | ) | ||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||||||
| Rounding for reverse split | ||||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE – JUNE 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuances of common stock for public offering | ||||||||||||||||||||||||
| Issuance of common shares upon vesting of restricted stock units and net stock option exercises | ( | ) | ( | ) | ||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||||||
| Rounding for reverse split | ||||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income (loss) | – | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE – SEPTEMBER 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| COMMON STOCK | ADDITIONAL PAID IN | ACCUMULATED | ACCUMULATED COMPREHENSIVE | TOTAL | ||||||||||||||||||||
| SHARES | AMOUNT | CAPITAL | DEFICIT | INCOME (LOSS) | EQUITY | |||||||||||||||||||
| BALANCE – MARCH 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Proceeds from Issuances of common stock, net | ||||||||||||||||||||||||
| Issuances of common stock for Class A and Class B warrant exercises | ||||||||||||||||||||||||
| Issuance of common shares upon vesting of restricted stock units and net stock option exercises | ( | ) | ( | ) | ||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE – JUNE 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of common shares upon vesting of restricted stock units and net stock option exercises | ( | ) | ( | ) | ||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||||||
| Net loss | – | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income (loss) | – | |||||||||||||||||||||||
| BALANCE – SEPTEMBER 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AETHLON MEDICAL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30, 2025 and
2024
(Unaudited)
| Six months Ended September 30, 2025 | Six months Ended September 30, 2024 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation | ||||||||
| Amortization of right-of-use operating lease asset | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable and other current liabilities | ( | ) | ||||||
| Due to related parties | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows provided by (used in) financing activities: | ||||||||
| Proceeds from the issuance of common stock, net | ||||||||
| Proceeds from the issuance of common stock upon Class A and Class B warrant exercises | ||||||||
| Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate on changes on cash | ( | ) | ||||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Par value of shares issued for vested restricted stock units | $ | $ | ||||||
| Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Cash, cash equivalents and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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AETHLON MEDICAL, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2025
1. NATURE OF BUSINESS AND BASIS OF PRESENTATION ORGANIZATION
Aethlon Medical, Inc., or Aethlon, the Company, we or us, is a medical therapeutic company focused on developing the Hemopurifier® (HP), a clinical-stage immunotherapeutic device intended for applications in cancer, life-threatening viral infections, and organ transplantation and other areas of significant unmet needs. In human studies (167 sessions with 41 patients), the Hemopurifier was used safely and demonstrated the potential to remove enveloped viruses. In pre-clinical studies, the Hemopurifier has exhibited the capacity to remove harmful extracellular vesicles (EVs) and enveloped viruses from biological fluids, utilizing its proprietary lectin-based mechanism. These extracellular vesicles have been implicated in disease processes such as immune suppression and metastasis in cancer as well as in the progression of severe life-threatening infectious diseases. The U.S. Food and Drug Administration (“FDA”) has designated the Hemopurifier as a “Breakthrough Device” for two independent indications:
| · | the treatment of individuals with advanced or metastatic cancer who are unresponsive to or intolerant of standard of care therapy, and with cancer types in which extracellular vesicles have been shown to participate in the development or severity of the disease; and | |
| · | the treatment of life-threatening viruses for which no approved therapies currently exist. |
We are also evaluating the Hemopurifier’s potential in additional clinical contexts based on its mechanism of action and preclinical findings.
Three clinical sites in Australia—Royal Adelaide Hospital in Adelaide, Pindara Private Hospital in the Gold Coast, and GenesisCare North Shore Hospital in Sydney—are currently open for enrollment in our phase 1 oncology trial. As of November 3, 2025, we have treated three participants in the first of three planned treatment cohorts. The Data Safety Monitoring Board (DSMB), comprising independent medical experts in nephrology and oncology, has reviewed the data from the initial cohort. Each of the three participants received a single 4-hour Hemopurifier treatment. Based on their evaluation, the DSMB found no safety concerns and confirmed that the Hemopurifier continues to demonstrate a favorable safety and tolerability profile. To date, no serious adverse events (SAEs) or Dose-Limiting Toxicities (DLTs) related to the Hemopurifier have been reported.
Enrollment for Cohort 2 is now open. In this phase, participants will receive two Hemopurifier treatments over a one-week period at the study's three active clinical sites in Australia. This trial, which aims to enroll approximately 9 to 18 patients, is designed to evaluate the safety and feasibility of administering the Hemopurifier at varying dosing intervals in patients with solid tumors who have stable or progressive disease, while receiving treatment that includes Pembrolizumab (Keytruda®) or Nivolumab (Opdivo®).
The Company previously pursued approval of a similar clinical trial in India. We received formal approval from the Indian regulatory agency, the Central Drugs Standard Control Organization (CDSCO), to conduct this trial in India on July 7, 2025. We were working with our India CRO, Qualtran, toward site initiation at Medanta Medicity Hospital. However, after reviewing extended timelines associated with site activation and trial execution, we made the decision to cancel the Indian trial to conserve resources and to concentrate efforts on the Australian oncology trial.
The Hemopurifier is designed to address life-threatening viral infections, particularly those involving highly glycosylated viruses for which there are no approved therapies. It has previously been used under FDA and international regulatory frameworks to treat individuals infected with HIV, hepatitis C, Ebola, and SARS-CoV-2. While our COVID-19 clinical trials in the U.S. and India have been terminated due to low ICU enrollment, these programs provided real-world evidence of Hemopurifier use in critically ill patients. We maintain an open IDE for viral indications, preserving the ability to respond to future outbreaks or emerging pathogens.
In addition to our ongoing clinical trials, we continue to explore potential new applications for the Hemopurifier through internal pre-clinical research. In the first fiscal quarter of 2026, results of our pre-clinical ex-vivo study entitled “Ex Vivo Removal of CD41 positive platelet microparticles from Plasma by a Medical Device containing a Galanthus nivalis agglutinin (GNA) affinity resin” were published in the pre-print vehicle bioRxiv. This manuscript has been submitted to a peer-reviewed publication for review. In the study we evaluated the Hemopurifier’s ability to remove disease-relevant extracellular vesicles (EVs), including those derived from platelets, which are implicated in cancer, autoimmune disease, and neurological disorders. The study demonstrated >98% removal of platelet-derived EVs from healthy human plasma in a simulated clinical session. We are also collaborating with academic researchers to investigate EV characteristics in patients with Long COVID. These exploratory programs are intended to inform potential future clinical indications and expand the utility of the Hemopurifier platform.
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Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we plan to market and sell the Hemopurifier. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued to us more recently will help protect the proprietary nature of our Hemopurifier treatment technology.
In addition to the foregoing, we are monitoring closely the impact of inflation, recent bank failures and the war between Russia and Ukraine and the military conflicts in Israel and the surrounding areas, as well as related political and economic responses and counter-responses by various global factors on our business. Given the level of uncertainty regarding the duration and impact of these events on capital markets and the U.S. economy, we are unable to assess the impact on our timelines and future access to capital. The full extent to which inflation, recent bank failures and the ongoing military conflicts will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets that are highly uncertain.
We incorporated in Nevada on March 10, 1999. Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com.
Our common stock is listed on the Nasdaq Capital Market under the symbol “AEMD.”
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
During the six months ended September 30, 2025, there were no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
REVERSE STOCK SPLITS
On October 16, 2025, the Company implemented a
On June 9, 2025, we effected a
Basis of Presentation and Use of Estimates
Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 8 of the Securities and Exchange Commission, or SEC, Regulation S-X. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended March 31, 2025, included in our Annual Report on Form 10-K filed with the SEC on June 26, 2025. The accompanying unaudited condensed consolidated financial statements include the accounts of Aethlon Medical, Inc. and its wholly owned subsidiary, Aethlon Medical Australia Pty Ltd. All significant inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements, taken as a whole, contain all adjustments that are of a normal recurring nature necessary to present fairly our operating results, cash flows, and financial position as of and for the period ended September 30, 2025. Estimates were made relating to useful lives of fixed assets, impairment of assets, share-based compensation expense and accruals for clinical trial and research and development expenses. Actual results could differ materially from those estimates. The accompanying condensed consolidated balance sheet at March 31, 2025 has been derived from the audited consolidated balance sheet at March 31, 2025, contained in the above referenced 10-K. The results of operations for the three and six months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year or any future interim periods.
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Reclassifications
Certain prior year balances within the unaudited condensed consolidated financial statements have been reclassified to conform to the current year presentation, including the impact of the reverse stock splits.
LIQUIDITY AND GOING CONCERN
Management expects existing cash as of September 30, 2025 to not be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these condensed consolidated financial statements. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
We are actively evaluating a range of strategic and financing options to extend our cash runway and support our ongoing operations, including clinical development activities. These options include potential equity offerings and other funding opportunities. However, there can be no assurance that any such financing will be available on acceptable terms, or at all.
Our ability to continue as a going concern is dependent upon securing additional capital and successfully executing our business plans. If we are unable to raise additional capital when needed, we may be forced to significantly curtail or cease operations, including research and development programs and clinical trials.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.
Restricted Cash
As of September 30, 2025, we maintained a restricted
cash balance of $
Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional dilutive common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded, as their effect would be antidilutive.
As of September 30, 2025 and 2024, an aggregate of and potential common shares, respectively, consisting of shares underlying outstanding stock options, warrants, and restricted stock units were excluded, as their inclusion would be antidilutive.
3. RESEARCH AND DEVELOPMENT EXPENSES
Our research and development costs are expensed as incurred. We incurred research and development expenses during the three- and six-month periods ended September 30, 2025 and 2024, which are included in various operating expense line items in the accompanying condensed consolidated statements of operations. Our research and development expenses in those periods were as follows:
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Three months ended | $ | $ | ||||||
| Six months ended | ||||||||
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During the three and six months ended September 30, 2025, we recognized
an R&D tax incentive related to our clinical trial activities conducted in Australia. The Australian R&D incentive is a government
program that provides refundable tax offsets for eligible research and development expenditures incurred in Australia. The incentive is
recorded as a reduction of research and development expense when the related qualifying expenditures are incurred and receipt of the credit
is considered probable. We recognized approximately $
4. RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced annual disclosures related to tax rate reconciliation and income taxes paid disaggregated by federal, state and foreign taxes. ASU 2023-09 is effective for the Company for annual periods beginning on or after April 1, 2025. The Company maintains a full valuation allowance against its deferred assets and does not have current income tax expense nor material income taxes paid. While the Company is evaluating the impact of this new standard on its income tax disclosures, it does not expect the adoption of ASU 2023-09 to have material impact on its consolidated financial statements, as the amendments relate to disclosures only.
In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires public business entities to provide enhanced annual and interim disclosures that disaggregate specified income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. In January 2025 the FASB issued Accounting Standards Update 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify effective dates of in ASU 2024-03. The Company is currently evaluating the potential impact of this guidance on its disclosures.
In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 eliminates various references to the FASB’s Concepts Statements from the FASB Accounting Standards Codification in order to clarify that the Codification represents the authoritative source of generally accepted accounting principles (GAAP) in the United States. The amendments do not alter existing accounting requirements. The guidance is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024, and early adoption is permitted. This ASU is not expected to have a material impact on the Company’s consolidated financial statements or disclosures.
5. EQUITY TRANSACTIONS IN THE SIX MONTHS ENDED SEPTEMBER 30, 2025
October 2025 Reverse Stock Split
On October 16, 2025,
the Company implemented a
June 2025 Reverse Stock Split
Effective as of the close
of business on June 6, 2025 with an effective trading date of June 9, 2025, we effected a
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September 2025 Registered Direct Offering
On
September 4, 2025, we entered into a Securities Purchase Agreement with certain investors pursuant to which it agreed to sell (i)
shares of common stock, (ii)
The
offering closed on September 5, 2025, and we received gross proceeds of approximately $
We intend to use the net proceeds from the offering for working capital and general corporate purposes.
In connection with the offering, the Company and its officers and directors agreed to customary lock-up provisions restricting certain issuances or sales of securities for up to 90 days following the closing.
Restricted Stock Unit Grants
In April 2025, the Compensation Committee of the Board, or Compensation Committee, approved, pursuant to the terms of our Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the three non-employee directors of the Company then serving on the Board of Directors of the Company, or Board. The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board, and for a grant of stock options or $75,000 worth of RSUs for a newly elected non-employee director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $20.80 per share for the April 2025 RSU grants. As a result, in April 2025 the four eligible directors were each granted an RSU in the amount of shares under the 2020 Plan.
During the three- and six-months ended September 30, 2025, and shares were issued upon settlement of and RSUs, respectively.
6. RELATED PARTY TRANSACTIONS
During the three-months ended September 30, 2025,
we accrued $
The accrued balance for separation expenses at September 30, 2025, relates to agreement with a former executive officer from a prior period; no new separation accruals were recorded during the quarter.
Amounts due to related parties were comprised of the following items:
| September 30, 2025 | March 31, 2025 | |||||||
| Accrued Board fees | $ | $ | ||||||
| Accrued vacation to all employees | ||||||||
| Accrued separation expenses | ||||||||
| Total due to related parties | $ | $ | ||||||
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7. OTHER CURRENT LIABILITIES
Other current liabilities were comprised of the following items:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| D&O insurance premium financing | $ | $ | ||||||
| Accrued professional fees | ||||||||
| Accrued resale registration | ||||||||
| Employee related FSA accruals | ||||||||
| Total other current liabilities | $ | $ | ||||||
All of the stock-based compensation expense recorded during the three and six months ended September 30, 2025 and 2024, aggregating $ and $ for the three-month periods and $ and $ for the six-month periods, respectively, is included in payroll and related expense in the accompanying condensed consolidated statements of operations. Stock-based compensation expense recorded during the three and six months ended September 30, 2025 and 2024 represented an impact on basic and diluted loss per common share of $() and $() for the three-month periods and $() and $() for the six-month periods, respectively.
Stock Option Activity
We did not issue any stock options during the six-months ended September 30, 2025 and 2024.
Stock options outstanding that have vested as of September 30, 2025 and stock options that are expected to vest subsequent to September 30, 2025 are as follows:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term in Years | ||||||||||
| Vested | $ | |||||||||||
| Expected to vest | $ | |||||||||||
| Total | ||||||||||||
A summary of stock option activity during the three months ended September 30, 2025 is presented below:
| Amount | Range of Exercise Price |
Weighted Average Exercise Price |
||||||||||
| Outstanding at beginning of year | $ | $ | ||||||||||
| Granted | $ | $ | ||||||||||
| Cancelled/Expired | $ | $ | ||||||||||
| Outstanding September 30, 2025 | $ | $ | ||||||||||
| Exercisable, September 30, 2025 | $ | $ | ||||||||||
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There were stock option grants during the three months ended September 30, 2025 and 2024. There were RSUs granted during the three months ended September 30, 2025. There were stock option exercises during the three months ended September 30, 2025 and 2024. On September 30, 2025, our outstanding stock options had intrinsic value, since the closing share price on that date of $ per share was below the exercise price of our outstanding stock options.
The table below summarizes nonvested stock options as of September 30, 2025 and changes during the six months ended September 30, 2025.
| Shares | Weighted Average Grant Date Fair Value | |||||||
| Nonvested stock options at April 1, 2025 | $ | |||||||
| Vested | ( | ) | $ | |||||
| Forfeited | ||||||||
| Nonvested stock options at September 30, 2025 | ||||||||
The detail of the options outstanding and exercisable as of September 30, 2025 is as follows:
| Options Outstanding | Options Exercisable | ||||||||||||||||||
| Exercise Prices | Number Outstanding |
Weighted Average Remaining Life (Years) |
Weighted Average Exercise Price |
Number Outstanding |
Weighted Average Exercise Price |
||||||||||||||
| $ | 1,024.00 – 1,128.00 | years | $ | $ | |||||||||||||||
| $ | 2,016.00 | years | $ | $ | |||||||||||||||
The table below summarizes restricted stock units as of September 30, 2025 and changes during the six months ended September 30, 2025.
| Shares | ||||
| Nonvested RSUs at April 1, 2025 | ||||
| Granted | ||||
| Vested | ( | ) | ||
| Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units | ( | ) | ||
| Nonvested RSUs at September 30, 2025 | ||||
Our total stock-based compensation for the six months ended September 30, 2025 and 2024 included the following:
| Six Months Ended | ||||||||
| September 30, 2025 | September 30, 2024 | |||||||
| Vesting of restricted stock units | $ | $ | ||||||
| Vesting of stock options | ||||||||
| Total Stock-Based Compensation | $ | $ | ||||||
We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The cumulative effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the three months ended September 30, 2025 was insignificant.
At September 30, 2025, there was approximately $ of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of years.
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9. WARRANTS
We issued 520,000 warrants in the three-months ended September 30, 2025 in connection with our September 5, 2025 offering. We issued 206,550 warrants in connection with the May 17, 2024 public offering during three-months ended June 2024.
A summary of warrant activity during the six months ended September 30, 2025 is presented below:
| Amount | Range of Exercise Price | Weighted Average Exercise Price | ||||||||||
| Warrants outstanding at March 31, 2025 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Exercised | $ | $ | ||||||||||
| Cancelled/Expired | ( | ) | $ | $ | ||||||||
| Warrants outstanding at September 30, 2025 | $ | $ | ||||||||||
| Warrants exercisable at September 30, 2025 | $ | $ | ||||||||||
10. COMMITMENTS AND CONTINGENCIES
LEASE COMMITMENTS
Office, Lab and Manufacturing Space Leases
The office, lab and manufacturing leases are coterminous
with a remaining term of
As of our September 30, 2025 balance sheet, we
have an operating lease right-of-use asset of $
In connection with the lease agreements for our
office, lab, and manufacturing space, we were required to provide financial assurance to the landlord in lieu of a traditional security
deposit. To satisfy this requirement, we initially arranged for our former bank to issue two standby letters of credit (L/Cs) totaling
$
Following the transition of our banking relationship
to JPMorgan Chase, the L/Cs were replaced with an interest-bearing money market deposit account. As of September 30, 2025, we maintained
a restricted cash balance of $
Overall, our rent expense, which is included in
general and administrative expenses, approximated $
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For the six months ended September 30, 2025, rent
expense totaled approximately $
In January 2025, the Company entered into a short-term
premium financing agreement with FIRST Insurance Funding, a division of Lake Forest Bank & Trust Company, N.A., to finance a portion
of its Directors & Officers (D&O) and other insurance premiums.
As collateral for the financing, the Company granted the lender a first priority security interest in the financed insurance policies, including all unearned premiums, dividends, credits, and certain loss payments. In the event of default, cancellation, or early termination of the policies, the lender has the right to collect any unearned premiums and apply them against the remaining loan balance.
This arrangement is classified as a short-term liability within other liabilities on the balance sheet (See Note 7) and is recorded net of any prepaid portions of the insurance policies.
LEGAL MATTERS
We may be involved from time to time in various claims, lawsuits, and/or disputes with third parties or breach of contract actions incidental to the normal course of our business operations. We are currently not involved in any litigation or any pending legal proceedings.
11. RECEIVABLE FROM AUSTRALIAN RESEARCH AND DEVELOPMENT TAX INCENTIVE (R&DTI)
During the three months ended September 30, 2025,
we submitted a tax return to the Australian tax authorities covering our research and development operations in Australia related to our
clinical trial in that country under their R&DTI. In October 2025, we received a payment under the R&DTI of Australian $
12. SEGMENT REPORTING
The Company operates as a single operating and reportable segment, which reflects how the Chief Operating Decision Maker (CODM), the Company’s Chief Executive Officer, manages the business and allocates resources. The Company is a development-stage medical technology company focused on advancing a clinical-stage therapeutic device, with key operational decisions driven by cash availability, development milestones, and the expected return on investment associated with future manufacturing and commercialization efforts.
Although the Company does not generate commercial revenue, the CODM regularly reviews certain expense categories and cash flow metrics to monitor progress and inform resource allocation. The primary internal performance measure used by the CODM is cash used in operating activities, rather than traditional profit or loss metrics.
| 16 |
In accordance with ASU 2023-07, which the Company
adopted for the fiscal year ended March 31, 2025. The following table summarizes key financial information reviewed by the CODM to evaluate
operating performance and cash utilization. All amounts presented exclude the Australian R&D tax incentive credit of approximately
$
| Category | Three Months Ended | Six Months Ended | ||||||||||||||
| September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||
| Research and development¹ | $ | $ | $ | $ | ||||||||||||
| General and administrative² | $ | $ | $ | $ | ||||||||||||
| Cash used in operating activities³ | $ | $ | $ | $ | ||||||||||||
Amounts in this table are rounded to the nearest thousand.
| ¹ |
| ² |
| ³ |
The Company does not allocate assets to operating segments, nor does the CODM evaluate performance using a segment profit or loss measure. There were no changes in the internal reports provided to or reviewed by the CODM during the periods presented.
Entity-Wide Information
| · | The Company did not recognize revenue during the six months ended September 30, 2025. |
| · | All long-lived assets are located in the United States. |
| · | A significant portion of clinical trial activity is conducted through the Company’s wholly owned subsidiary in Australia. |
13. SUBSEQUENT EVENTS
On October 16, 2025, the Company implemented a 1-for-10 reverse stock split of its then outstanding shares of common stock, with trading of the post-split shares beginning October 20, 2025. Under the reverse stock split, every 10 shares of common stock held by stockholders were combined into one share, and any fractional shares were rounded up to the next whole share. Following the split, the Company’s authorized common stock was adjusted accordingly to 6,000,000 shares. The reverse stock split was effected proactively in anticipation of, and to address, Nasdaq’s minimum bid price requirement for continued listing. The accompanying unaudited condensed consolidated financial statements and notes have been retroactively revised to reflect the reverse stock split as if it had occurred on April 1, 2024, with all shares and per-share amounts revised accordingly.
On October 16, 2025, the Company received a notice from Nasdaq stating that its common stock had been below $1.00 per share for 30 consecutive business days, resulting in noncompliance with the minimum bid price requirement under Listing Rule 5550(a)(2) and pursuant to Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for any compliance period specified in Rule 5810(c)(3)(A) due to the fact that the Company has effected a reverse stock split over the prior one-year period or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one. On October 31, 2025, the Company regained compliance with the minimum bid price requirement, and as such on November 5, 2025, Nasdaq notified the Company that the matter is now closed. The Company remains in compliance with all other Nasdaq continued listing requirements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and notes thereto included in Item 1 in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. For a complete discussion of forward-looking statements, see the section above entitled “Cautionary Notice Regarding Forward Looking Statements.”
Overview
Aethlon Medical, Inc., or Aethlon, the Company, we or us, is a medical therapeutic company focused on developing the Hemopurifier® (HP), a clinical-stage immunotherapeutic device intended for applications in cancer, life-threatening viral infections, and organ transplantation and other areas of significant unmet needs. In human studies (167 sessions with 41 patients), the Hemopurifier was used safely and demonstrated the potential to remove enveloped viruses. In pre-clinical studies, the Hemopurifier has exhibited the capacity to remove harmful extracellular vesicles (EVs) and enveloped viruses from biological fluids, utilizing its proprietary lectin-based mechanism. These extracellular vesicles have been implicated in disease processes such as immune suppression and metastasis in cancer as well as in the progression of severe life-threatening infectious diseases. The U.S. Food and Drug Administration (“FDA”) has designated the Hemopurifier as a “Breakthrough Device” for two independent indications:
| · | the treatment of individuals with advanced or metastatic cancer who are unresponsive to or intolerant of standard of care therapy, and with cancer types in which extracellular vesicles have been shown to participate in the development or severity of the disease; and | |
| · | the treatment of life-threatening viruses for which no approved therapies currently exist. |
We are also evaluating the Hemopurifier’s potential in additional clinical contexts based on its mechanism of action and preclinical findings.
Three clinical sites in Australia—Royal Adelaide Hospital in Adelaide, Pindara Private Hospital in the Gold Coast, and GenesisCare North Shore Hospital in Sydney—are currently open for enrollment in our phase 1 oncology trial. As of November 3, 2025, we have treated three participants in the first of three planned treatment cohorts. The Data Safety Monitoring Board (DSMB), comprising independent medical experts in nephrology and oncology, has reviewed the data from the initial cohort. Each of the three participants received a single 4-hour Hemopurifier treatment. Based on their evaluation, the DSMB found no safety concerns and confirmed that the Hemopurifier continues to demonstrate a favorable safety and tolerability profile. To date, no serious adverse events (SAEs) or Dose-Limiting Toxicities (DLTs) related to the Hemopurifier have been reported.
Enrollment for Cohort 2 is now open. In this phase, participants will receive two Hemopurifier treatments over a one-week period at the study's three active clinical sites in Australia. This trial, which aims to enroll approximately 9 to 18 patients, is designed to evaluate the safety and feasibility of administering the Hemopurifier at varying dosing intervals in patients with solid tumors who have stable or progressive disease, while receiving treatment that includes Pembrolizumab (Keytruda®) or Nivolumab (Opdivo®).
The Company previously received formal approval from India’s Central Drugs Standard Control Organization (CDSCO) to initiate an oncology clinical trial at Medanta Medicity Hospital. Following subsequent discussions with the Company’s India-based contract research organization (CRO), it was determined that first patient treatment would likely not occur until early 2026. In light of this extended timeline and after evaluating the associated costs and strategic priorities, the Company elected not to proceed with the India study. This decision enables the Company to focus its resources on advancing its ongoing clinical trial in Australia, which remains more closely aligned with its objective of generating timely clinical data to support a potential Premarket Approval (PMA) trial.
The Hemopurifier is designed to address life-threatening viral infections, particularly those involving highly glycosylated viruses for which there are no approved therapies. It has previously been used under FDA and international regulatory frameworks to treat individuals infected with HIV, hepatitis C, Ebola, and SARS-CoV-2. While our COVID-19 clinical trials in the U.S. and India have been terminated due to low ICU enrollment, these programs provided real-world evidence of Hemopurifier use in critically ill patients. We maintain an open IDE for viral indications, preserving the ability to respond to future outbreaks or emerging pathogens.
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In addition to our ongoing clinical trials, we continue to explore potential new applications for the Hemopurifier through internal pre-clinical research. In the quarter ended June 30, 2025 results of our pre-clinical ex-vivo study entitled “Ex Vivo Removal of CD41 positive platelet microparticles from Plasma by a Medical Device containing a Galanthus nivalis agglutinin (GNA) affinity resin” were published in the pre-print vehicle bioRxiv. In the study we evaluated the Hemopurifier’s ability to remove disease-relevant extracellular vesicles (EVs), including those derived from platelets, which are implicated in cancer, autoimmune disease, and neurological disorders. The study demonstrated >98% removal of platelet-derived EVs from healthy human plasma in a simulated clinical session.
In August 2025, we presented a poster at the Keystone Symposium on Long COVID and Other Post-Acute Infection Syndromes in Santa Fe, New Mexico. In collaboration with investigators at the University of California, San Francisco Medical Center Long COVID Clinic, we analyzed samples from participants with Long COVID and from recovered individuals as controls. Data presented at the symposium showed that both large and small EVs from Long COVID participants bound to the GNA lectin and to the Hemopurifier’s lectin affinity resin, supporting the potential utility of the device in this patient population. The full poster presentation is available on our website.
These exploratory programs, together with our academic collaborations, are intended to inform potential future clinical indications and expand the utility of the Hemopurifier platform.
We have sufficient inventory of Hemopurifiers to support our ongoing oncology trial in Australia as well as any near-term expansion of that study or potential trial activity in India. While we have received FDA approval to begin manufacturing at our San Diego facility under our IDE supplement, we are still awaiting FDA approval of a separate supplement to qualify an additional supplier of a key Hemopurifier component. We continue to work with the FDA on this process.
Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we plan to market and sell the Hemopurifier. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued to us more recently will help protect the proprietary nature of our Hemopurifier treatment technology.
In addition to the foregoing, we are monitoring closely the impact of inflation, recent bank failures and the war between Russia and Ukraine and the military conflicts in Israel and the surrounding areas, as well as related political and economic responses and counter-responses by various global factors on our business. Given the level of uncertainty regarding the duration and impact of these events on capital markets and the U.S. economy, we are unable to assess the impact on our timelines and future access to capital. The full extent to which inflation, recent bank failures and the ongoing military conflicts will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets that are highly uncertain.
We incorporated in Nevada on March 10, 1999. Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com.
Our common stock is listed on the Nasdaq Capital Market under the symbol “AEMD.”
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act, and must file reports, proxy statements and other information with the SEC. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, like us, which file electronically with the SEC.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2024
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Operating Expenses
Consolidated operating expenses for the three months ended September 30, 2025 were approximately $1,510,000 compared to $2,902,000 for the three months ended September 30, 2024. This decrease of $1,392,000, or 48%, in the 2025 period was due to a decrease of approximately $778,000 in payroll and related, $437,000 in general and administrative expenses and $177,000 in professional fees.
Payroll and related expenses decreased by approximately $778,000, largely due to the absence of severance charges of about $507,000 recorded in the prior year related to an executive separation and a reduction in force. The remainder of the decrease reflected approximately $230,000 of lower compensation costs associated with reduced headcount and bonus accruals, as well as a $41,000 decline in stock-based compensation.
The decrease in General and Administrative expenses of approximately $437,000 for the three months ended September 30, 2025, was primarily driven by fluctuations across several categories. Supplies decreased by approximately $68,000, reflecting prior-year raw material purchases with no comparable purchases in the current period. Clinical trial expenses decreased by approximately $97,000 compared to the prior year period, primarily reflecting the recognition of a $218,000 R&D tax incentive for Australian R&D related to the trial, the timing of trial-related activities, which were higher in the prior period due to the initiation of new study sites and related startup costs and the closure of the India COVID 19 trial. Insurance expense decreased by approximately $35,000, primarily due to lower medical insurance costs associated with reduced headcount. Utilities and business-related taxes decreased by approximately $10,000 and $9,000, respectively, mainly due to timing and usage patterns. Additional variances of approximately $6,614 in computer software and $23,000 across various other categories contributed to the overall change. These variances largely reflect timing differences and routine operational adjustments during the period.
The approximate $177,000 decrease in professional fees for the three months ended September 30, 2025, was primarily driven by a $265,000 reduction in investor relations expenses, reflecting the prior year engagement of an investor relations firm and our annual meeting, with no comparable activities in the current period and an approximate $12,000 decrease in contract labor. This decrease was partially offset by approximately $79,000 in legal fees related to additional patent filings and maintenance and $20,000 in tax, audit, and financial services.
Other Income, Net
We recorded other income of $22,730 for the three months ended September 30, 2025 compared to other income of $95,146 for the three months ended September 30, 2024. Other income in both periods was primarily interest income.
Net Loss
As a result of the changes in expenses noted above, our net loss decreased to $1,487,100 in the three months ended September 30, 2025 from $2,806,973 in the three months ended September 30, 2024.
Basic and diluted loss attributable to common stockholders was ($3.74) for the three months ended September 30, 2025, compared to ($16.11) for the three-month period ended September 30, 2024.
SIX MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE SIX MONTHS ENDED SEPTEMBER 30, 2024
Operating Expenses
Consolidated operating expenses for the six months ended September 30, 2025 were approximately $3,302,000, compared to approximately $5,522,000 for the six months ended September 30, 2025. This decrease of approximately $2,220,000, or 40%, in the 2025 period was due to decreases in payroll and related expenses of approximately $1,452,000, general and administrative expenses of $453,000 and professional fees of $315,000.
The $1,452,000 decrease in payroll and related expenses was primarily due to an $826,000 charge in the prior period related to severance agreements and workforce reductions, a $516,000 decrease from lower headcount and related compensation, and a $108,000 reduction in stock-based compensation associated with the reduced headcount.
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General and administrative expenses decreased approximately $453,000 for the six months ended September 30, 2025, primarily due to the recognition of a $218,000 R&D tax incentive for Australian R&D related to the trial, lower insurance costs of $66,000 from reduced headcount, and a $71,000 decrease in supplies. Additional decreases of $14,000 in utilities, $8,000 in business-related taxes, $13,000 in computer software, and $28,000 across various other categories contributed to the overall change. These decreases were partially offset by an approximate $33,000 rent charge for a lost deposit.
Professional fees decreased approximately $315,000, primarily due to lower investor relations of approximately $222,000, reduced general and SEC legal fees of approximately $119,000, and a combined $72,000 decrease in scientific consulting, contract labor, and audit and accounting services, partially offset by $94,000 in patent legal fees related to new filings, maintenance, and associated costs.
Net Loss
As a result of the changes in expenses noted above, our comprehensive loss decreased from $5,375,443 in the six months ended September 30, 2024, to $3,258,202 in the six months ended September 30, 2025.
Basic and diluted loss attributable to common stockholders was ($10.65) for the six months ended September 30, 2025, compared to ($40.15) for the six-month period ended September 30, 2024.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2025, we had a cash balance of $5,853,493 and working capital of $4,848,883. This compares to a cash balance of $5,501,261 and working capital of $4,050,514 at March 31, 2025.
We do not expect our existing cash as of September 30, 2025, to be sufficient to fund our operations for at least twelve months from the issuance date of these financial statements.
As we expand our activities, our overhead costs to support personnel, laboratory materials and infrastructure will increase and significant additional financing must be obtained to provide a sufficient source of operating capital. Should the financing we require to sustain our working capital needs be unavailable to us on reasonable terms, if at all, when we require it, we may be unable to support our research and our planned clinical trials. The failure to implement our research and clinical trials would have a material adverse effect on our ability to conduct planned clinical trials and commercialize our products.
Future capital requirements will depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical programs, the time and costs associated with intellectual property protection and enforcement, regulatory and compliance obligations, the competitive landscape, and our ability to enter into strategic partnerships or other collaborative arrangements. We expect to continue to incur increasing negative cash flows and net losses for the foreseeable future.
Cash Flows
Cash flows from operating, investing and financing activities, as reflected in the accompanying Condensed Consolidated Statements of Cash Flows, are summarized as follows:
| (In thousands) For the six months ended | ||||||||
| September 30, 2025 | September 30, 2024 | |||||||
| Cash (used in) provided by: | ||||||||
| Operating activities | $ | (3,374 | ) | $ | (3,962 | ) | ||
| Financing activities | 3,736 | 5,375 | ||||||
| Effect of exchange rate changes on cash | (9 | ) | 4 | |||||
| Net increase in cash and restricted cash | $ | 353 | $ | 1,417 | ||||
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NET CASH USED IN OPERATING ACTIVITIES. Net cash used in operating activities was approximately $3,374,000 for the six months ended September 30, 2025, compared to approximately $3,962,000 for the same period in 2024. The decrease was primarily driven by a lower net loss in the current period. However, this improvement was largely offset by changes in working capital, including decreases of approximately $796,000 in amounts due to related parties, $420,000 in accounts payable and other current liabilities, and $211,000 in prepaid expenses and other current assets, as well as $111,000 of lower non-cash charges compared with the prior year, for a total offset of approximately $1,538,000.
NET CASH PROVIDED BY FINANCING ACTIVITIES. Net cash provided by financing activities decreased by approximately $1,640,000 for the six months ended September 30, 2025. During the current period, we raised $3,744,000, net of placement agent fees and offering costs, partially offset by approximately $9,000 used for tax withholding on restricted stock unit settlements. In comparison, for the six months ended September 30, 2024, we raised approximately $5,384,000, net of placement agent fees and offering costs, from the sale and issuance of common stock and warrants in connection with a public offering, as well as the exercise of 3,750 Class A warrants and 36,000 Class B warrants. This amount was partially offset by approximately $9,000 for tax withholding on restricted stock unit settlements, resulting in net cash provided by financing activities of approximately $5,375,000.
Material Cash Requirements
We expect our clinical trial expenses for the planned oncology trial in Australia to increase for the foreseeable future. Those increases in clinical trial expenses include the cost of manufacturing additional Hemopurifiers.
In addition, we have entered into leases for our headquarters, laboratory and manufacturing facilities. We expect our rent payments to continue to increase for the foreseeable future.
Future capital requirements will depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical programs, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, the time and costs involved in obtaining regulatory approvals, competing technological and market developments, as well as our ability to establish collaborative arrangements, effective commercialization, marketing activities and other arrangements. We expect to continue to incur increasing negative cash flows and net losses for the foreseeable future. We will continue to need to raise additional capital either through equity and/or debt financing for the foreseeable future.
We do plan to access the equity markets for additional capital, however, there can be no assurance that we will be able to access such additional capital on favorable terms, or at all.
Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States, including due to bank failures, actual or perceived changes in interest rates and economic inflation, and worldwide resulting from macroeconomic factors. Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses and we may never be profitable or generate positive cash flow from operating activities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions affect the reported amounts of expenses during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.
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We believe that the estimates and assumptions most critical to the portrayal of our financial condition and results of operations—because they involve the most difficult, subjective, or complex judgments—form the basis of our most critical accounting policies. These critical estimates relate to long-lived assets, stock-based compensation, the valuation allowance for deferred tax assets, contingencies, and clinical trial accruals.
There have been no changes to our critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended March 31, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, as defined by Item 10(f)(1) of Regulation S-K, we are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed, in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (who is our principal executive officer and principal financial officer), to allow timely decisions regarding required disclosures.
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation as of the end of the period covered by this Quarterly Report under the supervision and with the participation of our management, including our Chief Executive Officer, who also serves as our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.
Based on such evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ending September 30, 2025 that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
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.
ITEM 1A. RISK FACTORS.
RISK FACTOR SUMMARY
Below is a summary of the principal factors that make an investment in our securities speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 filed with the SEC on June 26, 2025, or Annual Report, and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the SEC before making investment decisions regarding our securities.
| · | We have incurred significant losses and expect to continue to incur losses for the foreseeable future. | |
| · | We will require additional financing to sustain our operations, achieve our business objectives and satisfy our cash obligations, which may dilute the ownership of our existing stockholders. | |
| · | We have limited experience in identifying and working with large-scale contracts with medical device manufacturers; manufacture of our devices must comply with good manufacturing practices in the United States. | |
| · | Delays, interruptions or the cessation of production by our third-party suppliers of important materials or delays in qualifying new materials, has and may continue to prevent or delay our ability to manufacture our Hemopurifier. | |
| · | Our Hemopurifier technology may become obsolete. | |
| · | If we fail to comply with extensive regulations of U.S. and foreign regulatory agencies, the commercialization of our products could be delayed or prevented entirely. | |
| · | If we are unable to maintain compliance with the listing requirements of the Nasdaq Capital Market, our common stock may be delisted from the Nasdaq Capital Market, which could have a material adverse effect on our financial condition and could make it more difficult for you to sell your shares. | |
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As a public company with limited financial resources undertaking the launch of new medical technologies, we may have difficulty attracting and retaining executive management and directors.
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We plan to expand our operations, which may strain our resources; our inability to manage our growth could delay or derail implementation of our business objectives.
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Our success is dependent in part on our executive officers.
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| · | Delays in successfully commencing or completing our planned clinical trials could jeopardize our ability to obtain regulatory approval and sustain our operations. |
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Other than disclosed herein, there have been no material changes to the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report. The risks described in our Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Inadequate funding for the FDA, other government agencies or comparable foreign regulatory authorities could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Federal agencies in the United States are currently operating under a government shutdown that began on October 1, 2025, following the expiration of the most recent continuing resolution. Without appropriation of additional funding to federal agencies, our business operations related to our clinical development activities for the U.S. market could be impacted. The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated as a result In addition, government funding of other government agencies or comparable foreign regulatory authorities on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable. The Trump Administration has issued executive orders seeking to greatly reduce the size of the federal workforce, including through layoffs and severance packages offered to employees of federal agencies within the executive branch and independent agencies, including the FDA. Any such reduction in personnel may result in longer review times by the FDA and other agencies.
Disruptions and personnel turnover, as a result of leadership changes, the continued shutdown, staff reductions or otherwise, at the FDA, other government agencies or comparable foreign regulatory authorities may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Changes and cuts in FDA staffing also could result in delays in the FDA’s responsiveness or in its ability to review IND submissions or applications, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion or at all. There is also substantial uncertainty as to how regulatory reform measures being implemented by the current U.S. administration, and other political developments, such as the continued government shutdowns or work stoppages, would impact other U.S. regulatory agencies, such as the FDA, SEC and U.S. Patent and Trademark Office (USPTO), on which our operations rely. For example, the U.S. government has shut down as of October 1, 2025 and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs, including as a result of reaching the debt ceiling or staffing changes, it could significantly impact the ability of the FDA and USPTO to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, the continued government shutdown could impact our ability to access the public markets and obtain additional capital in the future in order to properly capitalize and continue our operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
We did not issue or sell any unregistered securities during the three months ended September 30, 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the three months ended September 30, 2025,
none of our directors or officers entered into,
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ITEM 6. EXHIBITS.
(a) Exhibits. The following documents are filed as part of this report:
| ^ | The information in Exhibit 32.1 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Quarterly Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AETHLON MEDICAL, INC. | |||
| Date: November 12, 2025 | By: | /s/ JAMES B. FRAKES | |
| JAMES B. FRAKES | |||
| CHIEF EXECUTIVE OFFICER | |||
| CHIEF FINANCIAL OFFICER | |||
| (PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER) | |||
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