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Item 1. Business

2023-06-28 compared with 2022-06-28 · 291 added, 304 removed, 513 unchanged (54% of the section changed)

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Overview and Corporate History

We are a medical technology

company focused on developing products to diagnose and treat life and organ threatening diseases.

The Aethlon Hemopurifier®, or Hemopurifier,

is a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections.

In cancer, the Hemopurifier

is designed to deplete the presence of circulating tumor-derived exosomes that promote immune suppression, seed the spread of metastasis

and inhibit the benefit of leading cancer therapies.

Food and Drug Administration, or FDA, has designated the Hemopurifier as

a “Breakthrough Device” for two independent indications:

· the treatment of

individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and with cancer

types in which exosomes have been shown to participate in the development or severity of the disease;

treatment of life-threatening viruses that are not addressed with approved therapies.

Aethlon Medical, Inc., or

Aethlon, the Company, we or us, is a medical therapeutic company focused on developing products to treat cancer and life-threatening infectious

The Aethlon Hemopurifier is a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections.

In cancer, the Hemopurifier is designed to deplete the presence of circulating tumor-derived exosomes that promote immune suppression,

seed the spread of metastasis and inhibit the benefit of leading cancer therapies.

Food and Drug Administration, or FDA, has

designated the Hemopurifier as a “Breakthrough Device” for two independent indications:

· the treatment

of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and with

cancer types in which exosomes have been shown to participate in the development or severity of the disease;

· the treatment

of life-threatening viruses that are not addressed with approved therapies.

We believe the Hemopurifier

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the growth and spread of tumors through multiple mechanisms.

We are currently conducting a clinical trial in patients with advanced and

metastatic head and neck cancer.

We are initially focused on the treatment of solid tumors that are being treated with immune checkpoint

As we advance our clinical trials, we are in close contact with our clinical sites to navigate and assess the impact of the

global COVID-19 pandemic on our clinical trials and current timelines.

We are currently working with our new contract research organization, or

CRO, on preparations to conduct a clinical trial in Australia in patients with solid tumors, including head and neck cancer, gastrointestinal

cancers and other cancers.

On October 4, 2019, the FDA

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The primary endpoint for the EFS,

which is designed to enroll 10 to 12 subjects at a single center, is safety, with secondary endpoints including measures of exosome clearance

and characterization, as well as response and survival rates.

This study, which is being conducted at the UPMC Hillman Cancer Center in

Pittsburgh, Pennsylvania, has treated two patients and is in the process of recruiting additional patients.

We are also in the process

of designing other clinical trials in oncology.

designed to enroll 10 to 12 subjects at a single center, is safety, with secondary endpoints including measures of exosome clearance and

characterization, as well as response and survival rates.

This clinical trial, initially conducted at the UPMC Hillman Cancer Center in

Pittsburgh, PA, or UPMC, treated two patients.

Due to lack of further patient enrollment, we and UPMC terminated this trial.

In January 2023, we entered

into an agreement with North American Science Associates, LLC, or NAMSA, a world leading MedTech CRO offering global end-to-end development

services, to oversee our clinical trials investigating the Hemopurifier for oncology indications.

Pursuant to the agreement, NAMSA will

manage our clinical trials of the Hemopurifier for patients in the United States and Australia with various types of cancer tumors.

anticipate that the initial clinical trials will begin in Australia.

We also believe the Hemopurifier

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In small-scale or early feasibility human studies, the Hemopurifier has been used in the past to treat

individuals infected with human immunodeficiency virus, or HIV, hepatitis C, or HCV, and Ebola.

Additionally, in-vitro ,

the Hemopurifier has been demonstrated to capture Zika virus, Lassa virus, MERS-CoV, cytomegalovirus, Epstein-Barr virus, Herpes simplex

virus, Chikungunya virus, Dengue virus, West Nile virus, smallpox virus, monkeypox virus, H1N1 swine flu virus, H5N1 bird flu virus, and

the reconstructed Spanish flu virus of 1918.

In several cases, these validations were conducted in collaboration with leading government

individuals infected with human immunodeficiency virus, or HIV, hepatitis-C and Ebola.

Additionally, in vitro, the

Hemopurifier has been demonstrated to capture Zika virus, Lassa virus, MERS-CoV, cytomegalovirus, Epstein-Barr virus, Herpes simplex virus,

Chikungunya virus, Dengue virus, West Nile virus, smallpox-related viruses, H1N1 swine flu virus, H5N1 bird flu virus, Monkeypox virus

and the reconstructed Spanish flu virus of 1918.

In several cases, these studies were conducted in collaboration with leading government

or non-government research institutes.

On June 17, 2020, the FDA

approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients

with SARS-CoV-2/COVID-19 in a New Feasibility Study.

That study is designed to enroll up to 40

subjects at up to 20 centers in the U.S.

Subjects will have established laboratory diagnosis of COVID-19, be admitted to an intensive

care unit, or ICU, and will have acute lung injury and/or severe or life threatening disease, among other criteria.

Endpoints for this

study, in addition to safety, include reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).

In June 2022, the

first patient in this study was enrolled and has completed the Hemopurifier treatment phase of the protocol.

Single Patient Emergency Use regulations, the Company has also treated three patients with COVID-19 with the Hemopurifier.

In September 2021, we entered

into an agreement with PPD, Inc., or PPD, a leading global contract research organization, or CRO, to oversee our U.S.

clinical studies

investigating the Hemopurifier for critically ill COVID-19 patients.

We now have nine fully activated hospitals for patient enrollment

and they are actively screening patients for the trial.

These hospitals include LSU Shreveport, Valley Baptist Medical Center in Texas,

Loma Linda Medical Center, Hoag Irvine and Newport Beach in Southern California, University of California Davis, University of Miami Medical

Center, Cooper Medical and Thomas Jefferson Medical Center.

We are in the site activation process with additional U.S.

medical centers.

approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with

SARS-CoV-2/COVID-19, or COVID-19, in a New Feasibility Study.

That study was designed to enroll up to 40 subjects at up to 20 centers

in the United States.

Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an intensive care unit, or

ICU, and have acute lung injury and/or severe or life-threatening disease, among other criteria.

Endpoints for this study, in addition

to safety, included reduction in circulating virus as well as clinical outcomes (NCT # 04595903).

In June 2022, the first patient in this

study was enrolled and completed the Hemopurifier treatment phase of the protocol.

Due to lack of COVID-19 patients in the ICUs of our

trial sites, we terminated this study in 2022.

Under Single Patient Emergency

Use regulations, the Company has treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated

with our Hemopurifier in our COVID-19 clinical trial discussed above.

We currently are experiencing

a disruption in our Hemopurifier supply, as our existing supply of Hemopurifiers expired on September 30, 2022, and as previously disclosed,

we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.

Our intended transition to a new supplier for

galanthus nivalis agglutinin, or GNA, a component of our Hemopurifier, is delayed as we work with the FDA for approval of our supplement

to our IDE, which is required to make this manufacturing change.

In October 2022, we launched

a wholly owned subsidiary in Australia, formed to conduct clinical research, seek regulatory approval and commercialize our Hemopurifier

in that country.

The subsidiary will initially focus on oncology trials in Australia.

We also obtained Ethics Review

board approval and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India,

for a COVID-19 clinical trial at that location.

We have completed all site initiation activities at Medanta Medicity Hospital and this

site is now open for enrollment and is actively screening patients.

One patient recently has completed participation in the study.

We are also the majority owner

of Exosome Sciences, Inc., or ESI.

We consolidate ESI in our consolidated financial statements.

Board, or ERB, approval and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi

NCR, India, for a COVID-19 clinical trial at that location.

One patient has completed participation in the Indian COVID-19 study.

relevant authorities in India have accepted the use of the Hemopurifiers made with the GNA from our new supplier.

In May 2023, we also received

ERB approval from the Maulana Azad Medical College, or MAMC, for a second site for our clinical trial in India to treat severe COVID-19.

MAMC was established in 1958 and is located in New Delhi, India.

MMAC is affiliated with the University of Delhi and is operated by the

Delhi government.

We also recently announced

that we also have begun investigating the use of our Hemopurifier in the organ transplant setting.

Our objective is to confirm that the

Hemopurifier, in our translational studies, when incorporated into a machine perfusion organ preservation circuit, can remove harmful

viruses and exosomes from harvested organs.

We have previously demonstrated the removal of multiple viruses and exosomes from buffer solutions,

in vitro, utilizing a scaled-down version of our Hemopurifier.

This process potentially may reduce complications following transplantation

of the harvested organ, which can include viral infection, delayed graft function and rejection.

We believe this new approach could be

additive to existing technologies that currently are in place to increase the number of viable organs for transplant.

Previously, we were the majority

owner of Exosome Sciences, Inc., or ESI, a company formed to focus on the discovery of exosomal biomarkers to diagnose and monitor life-threatening

diseases, and thus consolidated ESI in our consolidated financial statements.

For more than four years, the primary activities of ESI

were limited to the payment of patent maintenance fees and applications.

In September 2022, the Board of Directors of ESI and we, as the

majority stockholder of ESI, approved the dissolution of ESI.

Successful outcomes of human

trials will also be required by the regulatory agencies of certain foreign countries where we plan to sell the Hemopurifier.

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 more recently will help protect the proprietary nature of the Hemopurifier treatment technology.

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 more recently will help protect the proprietary nature of the Hemopurifier treatment technology.

In addition to the foregoing,

we are monitoring closely the impact of the COVID-19 global pandemic on our business and have taken steps designed to protect the health

and safety of our employees, while continuing our operations.

Given the level of uncertainty regarding the duration and impact of the

COVID-19 pandemic and inflationary environment on capital markets and the U.S.

economy, we are unable to assess the impact of the worldwide

spread of SARS-CoV-2 and the resulting COVID-19 pandemic, political change, and general economic uncertainty, on our timelines and future

access to capital.

The full extent to which the COVID-19 pandemic will impact our business, results of operations, financial condition,

clinical trials, and preclinical research will depend on future developments that are highly uncertain, as well as the economic impact

on national and international markets.

We were formed on March 10,

we are monitoring closely the impact of inflation, recent bank failures and the war in Ukraine 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 war in Ukraine 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 telephone

number is (619) 941-0360.

Our website address is www.aethlonmedical.com.

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and Radiological Health, or CDRH, the branch of FDA responsible for the premarket approval of all medical devices.

In our current applications, our Hemopurifier

can be used on the established infrastructure of continuous renal replacement therapy, or CRRT, and dialysis instruments located in hospitals

and clinics worldwide.

It could also potentially be developed as part of a proprietary closed system with its own pump and tubing set,

negating the requirement for dialysis infrastructure.

Incorporated within the Hemopurifier is a protein called a lectin that binds to

a glycosylated, or sugar substituted, membrane, which exosomes and most infectious viruses share.

In our current applications,

our Hemopurifier can be used on the established infrastructure of continuous renal replacement therapy, or CRRT, and dialysis instruments

located in hospitals and clinics worldwide.

It could also potentially be developed as part of a proprietary closed system with its own

pump and tubing set, negating the requirement for dialysis infrastructure.

Incorporated within the Hemopurifier is a protein called a

lectin, that aids in binding exosomes and viruses.

The Hemopurifier - Clinical Trials In Viral Infections

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In non-clinical bench experiments using a laboratory version of the Hemopurifier, performed

in Company labs as well as multiple other outside labs including the Centers for Disease Control, or CDC, the United States Army Medical

Research Institute of Infectious Diseases, or USAMRIID, Battelle Memorial Research Institute and others, we have demonstrated that the

a miniature version of the Hemopurifier can bind and clear multiple different glycosylated, or containing sugar molecules on their membranes,

These viruses include HIV, HCV, Dengue, West Nile, multiple strains of influenza, Ebola, Chikungunya, smallpox, monkeypox, multiple

herpes viruses, a MERS-CoV related pseudovirus and others.

in Company labs as well as in multiple other outside labs, including the Centers for Disease Control, or CDC, the United States Army Medical

Research Institute of Infectious Diseases, or USAMRIID, Battelle Memorial Research Institute and others, we have demonstrated that a miniature

version of the Hemopurifier can bind and clear multiple different glycosylated viruses.

These viruses include HIV, HCV, Dengue, West Nile,

multiple strains of influenza, Ebola, Chikungunya, smallpox, monkeypox, multiple herpes viruses, a MERS-CoV related pseudovirus and others.

Initial clinical trials on

the Hemopurifier were conducted overseas on dialysis patients with HCV, with a subsequent EFS conducted in the U.S.

under an FDA approved

Investigational Device Exemption, or IDE.

the Hemopurifier were conducted overseas on dialysis patients with HCV, with a subsequent EFS conducted in the United States under an

FDA approved IDE.

On March 13, 2017, we concluded

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SARS-CoV-2/COVID-19 in a New Feasibility Study.

That study is designed to enroll up to 40 subjects

at up to 20 centers in the U.S.

Subjects will have established laboratory diagnosis of COVID-19, be admitted to an intensive care unit,

or ICU, and will have acute lung injury and/or severe or life threatening disease, among other criteria.

Endpoints for this study, in

addition to safety, include reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).

In June 2022, the Company

completed the treatment protocol for its first patient in this study.

September 2021, we entered into an agreement with PPD, Inc., or PPD, a leading global contract research organization, or CRO, to oversee

clinical studies investigating the Hemopurifier for critically ill COVID-19 patients.

We now have nine hospitals activated for

patient enrollment and they are actively screening patients for the trial.

These hospitals include LSU Shreveport, Valley Baptist Medical

Center in Texas, Loma Linda Medical Center, Hoag, Irvine and Newport Beach in Southern California, University of California Davis, University

of Miami Medical Center, and Thomas Jefferson Medical Center.

We are in the site activation process with additional U.S.

medical centers.

Single Patient Emergency Use regulations, the Company has also treated three patients with COVID-19 with the Hemopurifier.

recently published a manuscript reviewing case studies covering those treatments entitled “Removal of COVID-19 Spike Protein, Whole

Virus, Exosomes and Exosomal microRNAs by the Hemopurifier® Lectin-Affinity Cartridge in Critically Ill Patients with COVID-19 Infection.”

That study was designed to enroll up to 40 subjects

at up to 20 centers in the United States.

Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an ICU,

and have acute lung injury and/or severe or life threatening disease, among other criteria.

Endpoints for this study, in addition to safety,

include reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).

In June 2022, the Company completed the treatment

protocol for its first patient in this study.

September 2021, we entered into an agreement with a leading global CRO to oversee our U.S.

clinical studies investigating the Hemopurifier

for critically ill COVID-19 patients.

Due to lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study

Single Patient Emergency Use regulations, we have also treated two patients with COVID-19 with the Hemopurifier, in addition to

the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.

published a manuscript reviewing case studies covering those two Single Patient Emergency Use treatments entitled “Removal of COVID-19

Spike Protein, Whole Virus, Exosomes and Exosomal microRNAs by the Hemopurifier® Lectin-Affinity Cartridge in Critically Ill Patients

with COVID-19 Infection.”

manuscript described the use of the Hemopurifier for a total of nine sessions in two critically ill COVID-19 patients.

case study demonstrated the improvement in the patient who was a SARS-COV-2 positive COVID-19 present at entry to the hospital, with

associated coagulopathy, or CAC, lung injury, inflammation, and tissue injury despite the absence of demonstrable COVID-19 viremia

at the start of treatment at Day 22 and having demonstrated strong viremia earlier in the patient’s disease cycle, suggesting

that the significant removal of exosomes contributed to the patient’s recovery.

This patient received eight Hemopurifier

treatments without complications and eventually was weaned from a ventilator and was discharged from the hospital.

The first case

study demonstrated the improvement in the patient who was a SARS-COV-2 positive COVID-19 present at entry to the hospital, with associated

coagulopathy, or CAC, lung injury, inflammation, and tissue injury despite the absence of demonstrable COVID-19 viremia at the start of

treatment at Day 22 and having demonstrated strong viremia earlier in the patient’s disease cycle, suggesting that the significant

removal of exosomes contributed to the patient’s recovery.

This patient received eight Hemopurifier treatments without complications

and eventually was weaned from a ventilator and was discharged from the hospital.

second patient case study demonstrated in vivo removal of SARS-CoV-2 virus from the blood stream of an infected patient.

completed a six-hour Hemopurifier treatment without complications and subsequently was placed on CRRT.

The patient ultimately expired

three hours after being placed on CRRT because of the advanced stage of the patient’s disease.

completed a six-hour Hemopurifier treatment without complications and subsequently was placed on continuous renal replacement therapy,

The patient ultimately expired three hours after being placed on CRRT because of the advanced stage of the patient’s disease.

May 2022, we announced the publication of a pre-print manuscript featuring data that demonstrated Aethlon's proprietary GNA affinity resin

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and was published in bioRxiv.

previously commissioned Battelle Memorial Institute in 2008 to run a monkeypox virus, or MPV, in vitro study using a

mini-Hemopurifier.

This study demonstrated that high concentrations of MPV (approximately 35 thousand cpu/ml) were rapidly depleted

from cell culture fluids when circulated through the Hemopurifier.

The study data indicated that the Hemopurifier removed 44 percent

of infectious MPV in the first hour of testing, 82 percent after six hours, and 98 percent after 20 hours.

The studies were

conducted in triplicate and data verification was provided by real-time polymerase chain reaction.

Given recent outbreaks of MPV, we

plan to continue to monitor the MPV outbreak, which has not yet been declared an emergency by the DHHS Secretary.

previously commissioned Battelle Memorial Institute in 2008 to run a monkeypox virus, or MPV, in vitro study using a mini-Hemopurifier.

This study demonstrated that high concentrations of MPV (approximately 35 thousand cpu/ml) were rapidly depleted from cell culture fluids

when circulated through the Hemopurifier.

The study data indicated that the Hemopurifier removed 44 percent of infectious MPV in the first

hour of testing, 82 percent after six hours, and 98 percent after 20 hours.

The studies were conducted in triplicate and data verification

was provided by real-time polymerase chain reaction.

The Hemopurifier – Clinical Trials Conducted Overseas in Viral

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Based on this experience, the Company filed an

Expanded Access protocol with the FDA to treat Ebola virus infected patients in up to ten centers in the U.S.

and a corresponding protocol

was approved by HealthCanada.

These protocols remain open allowing Hemopurifier treatment to be offered to patients presenting for care

in both countries.

In 2018, we applied for and were granted a Breakthrough Designation by the FDA “… for the treatment of

life-threatening viruses that are not addressed with approved therapies.”

Expanded Access protocol with the FDA to treat Ebola virus infected patients in up to ten centers in the United States and a corresponding

protocol was approved by HealthCanada.

These protocols remain open allowing Hemopurifier treatment to be offered to patients presenting

for care in both countries.

In 2018, we applied for and were granted a Breakthrough Designation by the FDA “… for the treatment

of life-threatening viruses that are not addressed with approved therapies.”

Hepatitis C Virus (HCV)

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The Hemopurifier in Cancer

While hepatitis C is no longer

a major commercial opportunity in developed markets due to the wide availability of curative, oral direct acting anti-viral agents, we

continue to investigate potential viral targets for the Hemopurifier.

Recently, however, our primary focus has been on the evaluation

of the Hemopurifier in cancer, where we have previously shown in non-clinical studies and in a recent COVID-19 emergency use patient that

it is capable of clearing exosomes, which are subcellular particles that are secreted by both normal and malignant cells.

Tumor derived

exosomes, have been shown in multiple laboratories to be critical components in the progression of cancers.

They can mediate resistance

to chemotherapy, resistance to targeted agents such as trastuzumab (Herceptin), metastasis and resistance to the newer immuno-oncology

agents, such as pembrolizumab (Keytruda).

Based on these observations and data, in November 2019 the FDA granted us a second Breakthrough

Designation “…for the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant

of standard of care therapy, and with cancer types in which exosomes have been shown to participate in the development or severity of

the disease.”

On October 4, 2019, the FDA

approved our IDE application to initiate an EFS of the Hemopurifier in patients with head and neck cancer in combination with standard

of care pembrolizumab (Keytruda).

The primary endpoint for the EFS, which is designed to enroll 10 to 12 subjects at a single center,

is safety, with secondary endpoints including measures of exosome clearance and characterization, as well as response and survival rates.

This study, which is being conducted at the UPMC Hillman Cancer Center in Pittsburgh, Pennsylvania, has been approved by the IRB and is

in the process of recruiting and treating patients.

Our primary focus in recent

years has been on the evaluation of the Hemopurifier in cancer, where we have previously shown in non-clinical studies and in a COVID-19

emergency use patient that it is capable of clearing exosomes, which are subcellular particles that are secreted by both normal and malignant

Tumor derived exosomes, have been shown in multiple laboratories to be critical components in the progression of cancers.

can mediate resistance to chemotherapy, resistance to targeted agents such as trastuzumab (Herceptin), metastasis and resistance to the

newer immuno-oncology agents, such as pembrolizumab (Keytruda).

Based on these observations and data, in November 2019 the FDA granted

us a second Breakthrough Designation “…for the treatment of individuals with advanced or metastatic cancer who are either

unresponsive to or intolerant of standard of care therapy, and with cancer types in which exosomes have been shown to participate in the

development or severity of the disease.”

GOVERNMENT CONTRACTS

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or the Award Contract.

The Award Contract amount is $1,860,561 and, as amended, runs for the period from September 16, 2019 through September

The Award Contract amount was $1,860,561 and, as amended, ran for the period from September 16, 2019 through September

The work performed pursuant

to this Award Contract focused on melanoma exosomes.

This work follows from our completion of a Phase I contract for the Topic 359 solicitation

that ran from September 2017 through June 2018.

Following on the Phase I work, the deliverables in the Phase II program involved the design

and testing of a pre-commercial prototype of a more advanced version of the exosome isolation platform.

During the fiscal year ended

March 31, 2022, we recorded $229,698 of government contract revenue on the Award Contract.

That revenue related to work performed in the

three months ended March 31, 2021 and June 30, 2021 that had previously been recorded as deferred revenue as a result of falling short

on certain milestones.

We then achieved those March period milestones in the June quarter and the June period milestones in the September

quarter and therefore recorded the previously deferred revenue as government contract revenue in the quarter ended September 30, 2021.

We recorded the invoices related to the September 30, 2021, December 31, 2021 and March 31, 2022 periods as deferred revenue, since we

fell short of certain milestones related to those periods.

During the fiscal year ended

March 31, 2021, we completed the milestones relevant to the first nine months of the fiscal year and, as a result, we recorded $436,427

of government contract revenue on the Phase 2 Melanoma Cancer Contract in that fiscal year.

to this Award Contract was focused on melanoma exosomes.

This work followed from our completion of a Phase I contract for the Topic 359

solicitation that ran from September 2017 through June 2018, as described below.

Following on the Phase I work, the deliverables in the

Phase II program involved the design and testing of a pre-commercial prototype of a more advanced version of the exosome isolation platform.

The Award Contract ended on

September 15, 2022 and we presented the required final report to the NCI.

As the NCI completed its close out review of the contract, we

recognized as revenue the $574,245 previously recorded as deferred revenue on our December 31, 2022 balance sheet.

Subaward with University of Pittsburgh

In 2020, we entered into a

cost reimbursable subaward arrangement with the University of Pittsburgh in connection with an NIH contract entitled “Depleting

Exosomes to Improve Responses to Immune Therapy in HNNCC.” Our share of the award is $256,750.

We recorded $64,467 and $34,233 of

revenue related to this subaward in the fiscal years ended March 31, 2022 and March 31.

2021, respectively.

In December 2020, we entered

into a cost reimbursable subaward arrangement with the University of Pittsburgh in connection with an NIH contract entitled “Depleting

Exosomes to Improve Responses to Immune Therapy in HNNCC.” Our share of the award was $256,750.

We did not record revenue related

to this subaward in the fiscal year ended March 31, 2023.

We recorded $64,467of revenue related to this subaward in the fiscal year ended

March 31, 2022.

In October 2022, we agreed

with the University of Pittsburgh to terminate the subaward arrangement, effective as of November 10, 2022, since it related to our clinical

trial in head and neck cancer in which the University of Pittsburgh was unable to recruit patients.

There are no provisions in the subaward

arrangement requiring repayment of cash received for work completed through November 10, 2022.

Research and Development Costs

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United States.

In addition, we have nine patent applications pending worldwide related to our Hemopurifier product platform and other

In addition, we have thirteen patent applications pending worldwide related to our Hemopurifier product platform and other

technologies.

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Outside of the United

States, we currently have pending patent applications or issued patents in Europe, India, Russia, Canada and Hong Kong.

States, we currently have pending patent applications or issued patents in Europe, India, Russia, Canada, Japan, Singapore and Hong Kong.

In addition to patent protection,

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Affinity capture of circulating biomarkers

Brain specific exosome based diagnostics and extracorporeal therapies

Method for removal of viruses from blood by lectin affinity hemodialysis

Methods and compositions for quantifying exosomes

Plasma exosomal tau as a biomarker for chronic traumatic encephalopathy

Devices and methods for treating a coronavirus infection and symptoms thereof

Foreign Patents

Brain specific exosome based diagnostics and extracorporeal therapies (Denmark)

Brain specific exosome based diagnostics and extracorporeal therapies (France)

Brain specific exosome based diagnostics and extracorporeal therapies (Germany)

Brain specific exosome based diagnostics and extracorporeal therapies (Ireland)

Brain specific exosome based diagnostics and extracorporeal therapies (Great Britain)

Brain specific exosome based diagnostics and extracorporeal therapies (Sweden)

Brain specific exosome based diagnostics and extracorporeal therapies (Netherlands)

Brain specific exosome based diagnostics and extracorporeal therapies (Switzerland)

Method for removal of viruses from blood by lectin affinity hemodialysis (Russia)

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Extracorporeal removal of microvesicular particles (Canada)

Extracorporeal removal of microvesicular particles (Germany)

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Extracorporeal removal of microvesicular particles (Sweden)

Brain specific exosome based diagnostics and extracorporeal therapies (Great Britain)

Brain specific exosome based diagnostics and extracorporeal therapies (France)

Brain specific exosome based diagnostics and extracorporeal therapies (Germany)

Brain specific exosome based diagnostics and extracorporeal therapies (Netherlands)

Pending Foreign Patent Applications

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Extracorporeal removal of microvesicular particles (exosomes) (India)

Extracorporeal removal of microvesicular particles (Canada)

Brain specific exosome based diagnostics and extracorporeal therapies (Canada)

Devices and methods for treating a coronavirus infection and symptoms thereof (Australia)

Devices and methods for treating a coronavirus infection and symptoms thereof (Canada)

Devices and methods for treating a coronavirus infection and symptoms thereof (Europe)

Devices and methods for treating a coronavirus infection and symptoms thereof (Israel)

Devices and methods for treating a coronavirus infection and symptoms thereof (Japan)

Devices and methods for treating a coronavirus infection and symptoms thereof (Singapore)

Pending International Patent Applications

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PCT/US2022/077885

Devices and methods for treating a coronavirus infection and symptoms thereof

Devices and methods for treating a viral infection and symptoms thereof

APPLICATION NAME

OWNED OR LICENSED

Owned by Aethlon

In addition to the Tausome, Sansagitta and Hemosagitta

trademarks noted in the above table, we also have trademark registrations in the U.S.

for Hemopurifier, Aethlon Medical, Inc., and the

Exosome Sciences Logo and obtained a trademark registration in India for Hemopurifier.

We also have common law trademark rights in Aethlon

ADAPT™ and ELLSA™.

In addition to the Tausome,

Sansagitta and Hemosagitta trademarks noted in the above table, we also have trademark registrations in the United States for Hemopurifier

and Aethlon Medical, Inc., and obtained a trademark registration in India for Hemopurifier.

We also have common law trademark rights in

Aethlon ADAPT™ and ELLSA™.

Licensing and Assignment Agreements

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for which the U.S.

Patent and Trademark Office granted a patent (Patent No.8,288,172) in the U.S.

as of October 2012.

The agreement provided

for an upfront payment of 53 shares of unregistered common stock and a 2% royalty on any future net sales of all products or services,

the sale of which would infringe in the absence of the assignment granted under this agreement.

We are also responsible for paying certain

patent application and filing costs.

Patent and Trademark Office granted a patent (Patent No.8,288,172) in the United States as of October 2012.

The agreement

provided for an upfront payment of 53 shares of unregistered common stock and a 2% royalty on any future net sales of all products or

services, the sale of which would infringe in the absence of the assignment granted under this agreement.

We are also responsible for

paying certain patent application and filing costs.

Under the assignment agreement, we own the patents until their respective expirations.

Under certain

circumstances, ownership of the patents may revert to the London Health Science Center Research, Inc.

if there is an uncured substantial

breach of the assignment agreement.

Under certain circumstances, ownership of the patents may revert to the London Health Science Center Research, Inc.

if there is an uncured

substantial breach of the assignment agreement.

Industry & Competition

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and marketing of regulated products or the reimbursement thereof.

For example, in the U.S., the Patient Protection and Affordable Care

Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, ACA, among other things, reduced and/or

For example, in the United States, the Patient Protection and Affordable

Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, ACA, among other things, reduced and/or

limited Medicare reimbursement to certain providers and imposed an annual excise tax of 2.3% on any entity that manufactures or imports

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on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed

Thus, the ACA will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, on January 28,

2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance

coverage through the ACA marketplace, which began on February 15, 2021 and remained open through August 15, 2021.

The executive order

also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare,

including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that

create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA

will be subject to judicial or Congressional challenges in the future.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other

things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary

maximum out-of-pocket cost and creating a new manufacturer discount program.

It is possible that the ACA will be subject to judicial or

Congressional challenges in the future.

It is unclear how such challenges and any additional healthcare reform measures will impact the

Other legislative changes

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reduces Medicare’s payments to providers by two percent through fiscal year 2032.

However, COVID-19 relief legislation suspended

the two percent Medicare sequester from May 1, 2020 through March 31, 2022.

Under current legislation, the actual reduction in Medicare

payments will vary from 1% to up to 3% in the final fiscal year of this sequester.

These reductions may reduce providers’ revenues

or profits, which could affect their ability to purchase new technologies.

Furthermore, the healthcare industry in the U.S.

has experienced

a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing lower payment rates and

negotiating reduced contract rates with service providers.

In July 2021, the Biden Administration released an executive order, “Promoting

Competition in the American Economy,” which contained provisions relating to prescription drugs.

On September 9, 2021, in response

to this executive order, the U.S.

Department of Health and Human Services, or HHS, released a Comprehensive Plan for Addressing High Drug

Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue

as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been

finalized to implement these principles.

In addition, Congress is considering drug pricing as part of other reform initiatives.

Furthermore, the healthcare industry in the United States has

experienced a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing lower payment

rates and negotiating reduced contract rates with service providers.

In July 2021, the Biden Administration released an executive order,

“Promoting Competition in the American Economy,” which contained provisions relating to prescription drugs.

On September 9,

2021, in response to this executive order, the U.S.

Department of Health and Human Services, or HHS, released a Comprehensive Plan for

Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies

that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

Further, the IRA, among

other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare

and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions

will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

HHS has and will continue

to issue and update guidance as these programs are implemented.

It is currently unclear how the IRA will be implemented but is likely

to have a significant impact on the pharmaceutical industry.

In addition, in response to the Biden administration’s October 2022

executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid

Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

is unclear whether the models will be utilized in any health reform measures in the future.

Legislation could be adopted

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our Hemopurifier or any other products under development be approved for commercialization by the FDA, any such products may not be considered

cost-effective, reimbursement may not be available in the U.S.

or other countries, if approved, and reimbursement may not be sufficient

to allow sales of our future products on a profitable basis.

The coverage decisions of third-party payors will be significantly influenced

by the assessment of our future products by health technology assessment bodies.

If approved for use in the U.S., we expect that any products

that we develop, including the Hemopurifier, will be purchased primarily by medical institutions, which will in turn bill various third-party

payors for the health care services provided to patients at their facility.

Payors may include the Centers for Medicare & Medicaid

Services, or CMS, which administers the Medicare program and works in partnership with state governments to administer Medicaid, other

government programs and private insurance plans.

The process involved in applying for coverage and reimbursement from CMS is lengthy and

Further, Medicare coverage is based on our ability to demonstrate that the treatment is “reasonable and necessary”

for Medicare beneficiaries.

Even if products utilizing our Aethlon Hemopurifier technology receive FDA and other regulatory clearance

or approval, they may not be granted coverage and reimbursement by any payor, including by CMS.

Many private payors use coverage decisions

and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies and amounts.

However, no uniform

policy for coverage and reimbursement for medical devices exists among third-party payors in the United States.

Therefore, coverage and

reimbursement can differ significantly from payor to payor.

cost-effective, reimbursement may not be available in the United States or other countries, if approved, and reimbursement may not be

sufficient to allow sales of our future products on a profitable basis.

The coverage decisions of third-party payors will be significantly

influenced by the assessment of our future products by health technology assessment bodies.

If approved for use in the United States,

we expect that any products that we develop, including the Hemopurifier, will be purchased primarily by medical institutions, which will

in turn bill various third-party payors for the health care services provided to patients at their facility.

Payors may include the Centers

for Medicare & Medicaid Services, or CMS, which administers the Medicare program and works in partnership with state governments to

administer Medicaid, other government programs and private insurance plans.

The process involved in applying for coverage and reimbursement

from CMS is lengthy and expensive.

Further, Medicare coverage is based on our ability to demonstrate that the treatment is “reasonable

and necessary” for Medicare beneficiaries.

Even if products utilizing our Aethlon Hemopurifier technology receive FDA and other

regulatory clearance or approval, they may not be granted coverage and reimbursement by any payor, including by CMS.

Many private payors

use coverage decisions and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies and amounts.

However, no uniform policy for coverage and reimbursement for medical devices exists among third-party payors in the United States.

coverage and reimbursement can differ significantly from payor to payor.

Manufacturing

Manufacturing of our Hemopurifier

occurs in collaboration with a contract manufacturer based in California under current Good Manufacturing Practice, or cGMP, regulations

promulgated by the FDA.

To date, manufacturing of

our Hemopurifier occurs in collaboration with a contract manufacturer based in California under current Good Manufacturing Practice, or

cGMP, regulations promulgated by the FDA.

Our contract manufacturer is registered with the FDA.

To date, our manufacture of the Hemopurifier has been

limited to quantities necessary to support our clinical studies.

To date, our manufacture of the Hemopurifier

has been limited to quantities necessary to support our clinical studies.

Our costs of compliance with federal, state and

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of Principal Suppliers

Our Hemopurifiers are currently

Our Hemopurifiers were previously

assembled by Aethlon personnel in a cGMP manufacturing facility provided by Life Science Outsourcing, Inc, or LSO.

In the future, we plan

to bring our manufacturing operations in-house.

Aethlon personnel assemble the various components of the Hemopurifier with materials from

our various suppliers, which are purchased and released by Aethlon and stored at LSO prior to use in manufacturing.

Specifically, the

Hemopurifier contains three critical components with limited available suppliers.

The base cartridge on which the Hemopurifier is constructed

is sourced from Medica S.p.A and we are dependent on the continued availability of these cartridges.

Although there are other suppliers,

the process of qualifying a new supplier takes time and regulatory approvals must be obtained.

We currently purchase the diatomaceous

earth from Janus Scientific, Inc., as the distributor;

however, the product is manufactured by Imerys Minerals Ltd.

There potentially

are other suppliers of this product, but as with the cartridges, qualifying and obtaining required regulatory approvals takes time and

Currently, we are in

the process of bringing our manufacturing operations in-house.

Aethlon personnel assemble the various components of the Hemopurifier with

materials from our various suppliers, which are purchased and released by Aethlon.

Specifically, the Hemopurifier contains three critical

components with limited available suppliers.

The GNA lectin is sourced from Vector Laboratories Inc.

and also is available from other suppliers;

however, Sigma Aldrich

is the only approved back up supplier at this time.

A business interruption at any of these sources could have a material impact on our

ability to manufacture the Hemopurifier.

and also is available from other

We currently are experiencing a disruption in our Hemopurifier supply, as our existing supply of Hemopurifiers expired on September

30, 2022, and as previously disclosed, we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.

transition to a new supplier for GNA is delayed as we work with the FDA for approval of our supplement to our IDE, which is required to

make this manufacturing change.

The base cartridge on which the Hemopurifier is constructed is sourced from Medica S.p.A and we are dependent

on the continued availability of these cartridges.

Although there are other suppliers, the process of qualifying a new supplier takes

time and regulatory approvals must be obtained.

We currently purchase the diatomaceous earth from Janus Scientific, Inc., as the distributor;

however, the product is manufactured by Imerys Minerals Ltd.

There potentially are other suppliers of this product, but as with the cartridges,

qualifying and obtaining required regulatory approvals takes time and resources.

Sales and Marketing

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and inhibit or prevent commercialization of other future product candidates.

We have 14 full-time employees.

As of June 26, 2023, we had

15 full-time employees and no part-time employees.

All of our employees are located in the United States.

We do intend to hire additional employees.

We utilize, whenever appropriate, consultants

in order to conserve cash and resources.

We do intend to hire additional

We utilize, whenever appropriate, consultants in order to conserve cash and resources.

We believe our employee relations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business