What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-06-28 compared with 2022-06-28 · 265 added, 285 removed, 196 unchanged (74% of the section changed)

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analysis should be read in conjunction with the consolidated Financial Statements and Notes thereto appearing elsewhere in this Annual

We are a medical technology

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

We are a medical therapeutic

company focused on developing products to treat cancer and life-threatening infectious diseases.

The Aethlon Hemopurifier is a clinical-stage

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The 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 can be a substantial advance in the treatment of patients with advanced and metastatic cancer through the clearance of

exosomes that promote 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 checkpoint inhibitors.

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.

· 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

can be a substantial advance in the treatment of patients with advanced and metastatic cancer through the clearance of exosomes that promote

the growth and spread of tumors through multiple mechanisms.

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

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 is being conducted at the UPMC Hillman Cancer Center in Pittsburgh, Pennsylvania, has treated two patients and is in the process

of recruiting and treating patients.

approved our Investigational Device Exemption, or IDE, application to initiate an Early Feasibility Study, or 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,

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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with an already approved treatment.

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

infected with HIV, 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-related viruses, including 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 or non-government research institutes.

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 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’s plan is 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, will include reduction in circulating virus as well as clinical outcomes (NCT # 04595903).

Under 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, a leading global CRO, to oversee our U.S.

clinical studies investigating the Hemopurifier for

critically ill COVID-19 patients.

We now have nine hospitals fully activated for patient enrollment and they are actively screening

patients for the trial.

These sites are LSU Shreveport, Hoag Irvine and Newport Beach, Valley Baptist Medical Center in Texas,

University of California Davis, University of Miami Medical Center, Loma Linda Hospital in Loma Linda, CA, Thomas Jefferson Medical

Center and Cooper Medical.

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

medical centers.

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.

We are also the majority owner

of ESI and we consolidate ESI in our consolidated financial statements.

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 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.

The 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 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, if successfully

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.

We were formed on March 10,

Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121.

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 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.

Our executive offices are

located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121.

Our telephone number is (619) 941-0360.

(619) 941-0360.

Our website address is www.aethlonmedical.com.

Our common stock is listed on the Nasdaq Capital

Market under the symbol “AEMD.”

COVID-19 Update

In March 2020, the World Health

Organization declared COVID-19 a global pandemic.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply

chains and created significant volatility and disruption of financial markets.

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, including clinical trials.

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 future access to capital.

Further, while we have not experienced significant disruptions to our manufacturing supply chain, business, results of operations, financial

condition, clinical trials, or preclinical research to date, we are unable to assess the potential impact this pandemic could have on

our manufacturing supply chain, business, results of operations, financial condition, clinical trials, or preclinical research in the

As we continue to actively

advance our clinical trials, we remain in close contact with our clinical sites and are assessing the impact of COVID-19 on our trials,

expected timelines and costs on an ongoing basis.

We will assess any potential delays in our ability to timely ship clinical trial materials,

including internationally, due to transportation interruptions.

The extent of the impact of COVID-19 and inflation on our operational

and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our clinical

trials, employees and vendors, all of which are uncertain and cannot be predicted.

Given these uncertainties, we cannot reasonably estimate

the related impact to our business, operating results and financial condition, if any.

Our website address

is www.aethlonmedical.com.

Our common stock is listed

on the Nasdaq Capital Market under the symbol “AEMD.”

Fiscal Years Ended March 31, 2023 and 2022

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Phase 2 Melanoma Cancer Contract

Breast Cancer Grant

Subaward with University of Pittsburgh

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On September 12, 2019, the

National Cancer Institute, or NCI, part of the NIH, awarded to us an SBIR Phase II Award Contract, for NIH/NCI Topic 359, entitled “A

Device Prototype for Isolation of Melanoma Exosomes for Diagnostics and Treatment Monitoring”, or the Award Contract.

Contract amount is $1,860,561 and, as amended, runs for the period from September 16, 2019 through September 15, 2022.

NCI awarded to us the Award Contract.

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

2019 through September 15, 2022.

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 Phase 2 Melanoma Cancer 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

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.

Breast Cancer Grant

In the fiscal year ended March

31, 2021, we completed and submitted the final reports applicable to this NCI grant (number 1R43CA232977-01).

The title of this SBIR,

Phase I grant is “The Hemopurifier Device for Targeted Removal of Breast Cancer Exosomes from the Blood Circulation,” or the

Breast Cancer Grant.

We note this grant because it contributed to the year over year change in revenue.

This NCI Phase I grant period

originally ran from September 14, 2018 through August 31, 2019.

In August 2019, we applied for and received a no cost, twelve month extension

on this grant;

through August 31, 2020.

The total amount of the firm grant was $298,444.

The grant called for two subcontractors to work

Those subcontractors were University of Pittsburgh and Massachusetts General Hospital.

During the fiscal year ended

March 31, 2021, we recorded the remaining $188,444 of revenue related to the Breast Cancer Grant, as we achieved two of the three milestones

related to the Breast Cancer Grant.

We concluded in our final report to the SBIR that our pre-clinical results demonstrated that our work

under the grant provided support that the Hemopurifier has the capacity to clear exosomes from breast cancer patients.

That amount previously

was recorded as deferred revenue.

As of March 31, 2021, we received

all of the funds allocated to the Breast Cancer Grant and have submitted the final reports applicable to this grant.

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 $64,467 of 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.

Operating Costs and Expenses

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of $1,757,833.

The $2,164,447 increase in the fiscal year ended March 31, 2022 was due to increases in payroll and related expenses of

$1,170,861 and in general and administrative expense of $997,224, which were partially offset by a decrease of $3,638 in professional

The $1,757,833 increase in the fiscal year ended March 31, 2023 was due to increases in general and administrative expense

of $1,026,081 and professional fees of $914,002, which were partially offset by a decrease in payroll and related expenses of $182,250.

The $1,026,081 increase in

the fiscal year ended March 31, 2022 in our payroll and related expenses was due to an increase in cash-based compensation of $1,199,661,

which was partially offset by a decrease in our stock-based compensation of $28,800.

The $1,199,661 increase in our cash-based compensation

was primarily due to increases of $826,197 and $720,863 in our general and administrative payroll and in our research and development

payroll, respectively, due to headcount increases, and $202,783 in relocation-related compensation to two senior executives that relocated

to San Diego, California as a condition of their employment.

Those increases were partially offset by the combination of a $451,933 accrual

in the 2021 period related to the separation agreement with our former CEO, with no comparable expense in the 2022 period, and a net decrease

of $134,950 in cash bonuses.

the fiscal year ended March 31, 2023 in our general and administrative expense was due to an increase in manufacturing and research and

development supplies of $411,211 related to the manufacture of the Hemopurifier device and various research and development activities.

Other increases included, $146,962 in subcontract expense related to revenue recognized from contracts and grants with the NIH, $154,608

associated with the close out of the US COVID-19 clinical trial, $103,602 associated with our Australian subsidiary and launch of our

oncology clinical trial in Australia, $117,772 in rent expense related to the addition of the manufacturing suite in fiscal year 2023

and a full year of rent for our office and laboratory space, $117,207 in depreciation and amortization expense associated with leasehold

improvements to our manufacturing space and $93,510 in D&O and medical insurance.

We also had an increase in our utility expense of

$31,924, largely as the result of our increased space under lease.

These increases were offset by decreases in outside services of $65,377,

laboratory fees of $61,258 and decreases in office supplies and equipment of $32,154.

The $914,002 increase in the

fiscal year ended March 31, 2022 in our general and administrative expenses primarily arose from increases of $453,254 in our clinical

trial expenses, $209,082 in rent expense and $194,572 in insurance expense.

fiscal year ended March 31, 2023 in our professional fees was primarily due to increases of $290,762 in legal expenses, $334,828 in contract

labor associated with product development and scientific analytical services, $176,443 in regulatory consulting, $39,999 in investor relations,

$73,066 in recruiting expense and $16,250 in director fees, which were partially offset by a decrease in accounting fees of $16,601.

As a result of the above factors,

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Liquidity and Capital Resources

At March 31, 2022, we had

As of March 31, 2023, we had

a cash balance of $14,532,943 and working capital of $13,585,477.

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The primary sources of our

increase in cash during the fiscal year ended March 31, 2022 resulted from our At The Market Offering Agreement with Wainwright dated

March 22, 2021, or the 2021 ATM Agreement, and our registered direct financing through Maxim Group LLC.

The cash raised from those activities

is noted below:

At The Market Offering Agreements with H.C.

cash from financing activities during the fiscal years ended March 31, 2023 and 2022 were sales of our common stock, as follows:

Financings During the fiscal year ended March

During the fiscal year ended March 31, 2023, we

raised capital only through our At The Market Offering Agreement, or the 2022 ATM Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright.

2022 At The Market Offering Agreement with

Wainwright & Co., LLC

On March 24, 2022, we entered

into the 2022 ATM Agreement with Wainwright, which established an at-the-market equity program pursuant to which we may offer and sell

shares of our common stock from time to time as set forth in the 2022 ATM Agreement.

The offering was registered

under the Securities Act of 1933, as amended, or the Securities Act, pursuant to our shelf registration statement on Form S-3 (Registration

Statement No.

333-259909), as previously filed with the SEC and declared effective on October 21, 2021.

We filed a prospectus supplement,

dated March 24, 2022, with the SEC that provides for the sale of shares of our common stock having an aggregate offering price of up to

$15,000,000, or the 2022 ATM Shares.

Under the 2022 ATM Agreement,

Wainwright may sell the 2022 ATM Shares by any method permitted by law and deemed to be an “at the market offering” as defined

in Rule 415 promulgated under the Securities Act, including sales made directly on the Nasdaq Capital Market, or on any other existing

trading market for the 2022 ATM Shares.

In addition, under the 2022 ATM Agreement, Wainwright may sell the 2022 ATM Shares in privately

negotiated transactions with our consent and in block transactions.

Under certain circumstances, we may instruct Wainwright not to sell

the 2022 ATM Shares if the sales cannot be effected at or above the price designated by us from time to time.

We are not obligated to make

any sales of the 2022 ATM Shares under the 2022 ATM Agreement.

The offering of the 2022 ATM Shares pursuant to the 2022 ATM Agreement

will terminate upon the termination of the 2022 ATM Agreement by Wainwright or us, as permitted therein.

The 2022 ATM Agreement contains

customary representations, warranties and agreements by us, and customary indemnification and contribution rights and obligations of the

We agreed to pay Wainwright a placement fee of up to 3.0% of the aggregate gross proceeds from each sale of the 2022 ATM Shares.

We also agreed to reimburse Wainwright for certain specified expenses in connection with entering into the 2022 ATM Agreement.

In the fiscal year ended March

31, 2023, we raised net proceeds of $8,927,211, net of $229,610 in commissions to Wainwright and $27,153 in other offering expense, through

the sale of 7,480,836 shares of our common stock at an average price of $1.19 per share under the 2022 ATM Agreement.

Financings During the fiscal year ended March

During the fiscal year ended

March 31, 2022, we raised capital through our 2021 ATM Agreement (as defined below) with Wainwright and in a registered direct financing

through Maxim Group LLC.

2021 ATM Agreement

On March 22, 2021, we entered

into the 2021 ATM Agreement with Wainwright as sales agent, pursuant to which we could offer and sell shares of our common stock, from

time to time as set forth in the 2021 ATM Agreement.

into an At the Market Offering Agreement, or the 2021 ATM Agreement, with Wainwright, as sales agent, pursuant to which we could offer

and sell shares of our common stock, from time to time as set forth in the 2021 ATM Agreement.

The offering was registered

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market prices or as otherwise agreed with Wainwright.

We have no obligation to sell any of the shares, and, at any time, we could suspend

offers under the 2021 ATM Agreement or terminate the agreement.

The 2021 ATM Agreement provided that we have no obligation under the 2021 ATM Agreement

to sell any of the shares, and, at any time, we could suspend offers under the 2021 ATM Agreement or terminate the agreement.

In the fiscal year ended March

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per share of net proceeds.

No further sales may be made under the agreement.

2022 ATM Agreement

On March 24, 2022, we entered

into the 2022 ATM Agreement with Wainwright as sales agent, pursuant to which we may offer and sell shares of our common stock from time

to time as set forth in the 2022 ATM Agreement.

The offering was registered

under the Securities Act pursuant to our shelf registration statement on S-3 (Registration Statement No.

333-259909), as previously filed

with the SEC and declared effective on October 21, 2021.

We filed a prospectus supplement, dated March 24, 2022, with the SEC in connection

with the offer and sale of the shares of common stock, pursuant to which the Company may offer and sell shares of common stock having

an aggregate offering price of up to $15,000,000 from time to time.

Subject to the terms and conditions

set forth in the 2022 ATM Agreement, Wainwright has agreed to use its commercially reasonable efforts consistent with its normal trading

and sales practices to sell the shares under the 2022 ATM Agreement from time to time, based upon our instructions.

We have provided Wainwright

with customary indemnification rights under the 2022 ATM Agreement, and Wainwright is entitled to a commission at a fixed rate equal to

up to three percent of the gross proceeds per share sold.

In addition, we agreed to reimburse Wainwright for certain specified expenses

in connection with entering into the 2022 ATM Agreement.

The 2022 ATM Agreement provides that it will terminate upon the written termination

by either party as permitted thereunder.

Sales of the shares, under

the 2022 ATM Agreement will be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415

under the Securities Act, including sales made by means of ordinary brokers’ transactions, including on the Nasdaq Capital Market,

at market prices or as otherwise agreed with Wainwright.

We have no obligation to sell any of the shares, and, at any time, we could suspend

offers under the 2022 ATM Agreement or terminate the agreement.

In the fiscal year ended March

31, 2022, we did not raise any proceeds under the 2022 ATM Agreement.

In June 2022, we raised net

proceeds of $448,760, net of $11,583 in commissions to Wainwright and $2,994 in other offering expense, through the sale of 411,055 shares

of our common stock at an average price of $1.09 per share under the 2022 ATM Agreement.

No further sales may be made under the 2021 ATM Agreement.

Registered Direct Financing

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Material Cash Requirements

As noted above in the

results of operations, our clinical trial expense increased by $453,254 in the fiscal year ended March 31, 2022.

We expect our

clinical trial expenses to continue to increase for the foreseeable future.

Those increases in clinical trial expenses include

the cost of manufacturing additional Hemopurifiers for the clinical trials.

In addition, we have

entered into leases for our new headquarters, laboratory and manufacturing facilities.

As noted above in the results of operations,

our rent expense increased by $209,082 in the fiscal year ended March 31, 2022.

We expect our rent expense to continue to increase

for the foreseeable future.

As noted above in the results

of operations, our clinical trial expense for the preparation for our planned oncology trial in Australia was $103,602 in the fiscal year

ended March 31, 2023.

We expect our clinical trial expenses to continue to increase for the foreseeable future.

Those increases in clinical

trial expenses include the cost of manufacturing additional Hemopurifiers for the planned clinical trials.

In addition, we have entered

into leases for our new headquarters, laboratory and manufacturing facilities.

As noted above in the results of operations, our rent expense

increased by $117,772 in the fiscal year ended March 31, 2023.

We expect our rent expense to continue to increase for the foreseeable

Future capital requirements

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As a result of the COVID-19

pandemic and actions taken to slow its spread, global events and political changes, the global credit and financial markets have experienced

extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth,

increases in inflation and uncertainty about economic stability.

There can be no assurance that further deterioration in credit and financial

markets and confidence in economic conditions will not occur.

If equity and credit markets deteriorate, it may make any necessary debt

or equity financing more difficult to obtain, more costly and/or more dilutive.

Any of these actions could materially harm our business,

results of operations and future prospects.

pandemic and actions taken to slow its spread, global events, political changes, bank failures, actual or perceived changes in interest

rates and economic inflation, the global credit and financial markets have experienced extreme volatility, including diminished liquidity

and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation and uncertainty about economic

There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions

will not occur.

If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain,

more costly and/or more dilutive.

Any of these actions could materially harm our business, results of operations and future prospects.

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.

Cash flows from operating,

6 unchanged sentences

Financing activities

Net increase in cash

Net (decrease) increase in cash

Net Cash Used in Operating Activities

9 unchanged sentences

Net cash generated from financing

activities increased from approximately $7,128,000 in the fiscal year ended March 31, 2021 to approximately $17,368,000 in the fiscal

activities decreased from approximately $17,368,000 in the fiscal year ended March 31, 2022 to approximately $8,915,000 in the fiscal

year ended March 31, 2023.

5 unchanged sentences

pay for the tax withholding on the issuance of RSUs.

Recent Events

Sales Under 2022 ATM Agreement

In June 2022, we raised net

proceeds of $448,760 net of $11,583 in commissions to Wainwright and $2,994 in other offering expense, through the sale of 411,055 shares

of our common stock at an average price of $1.09 per share under the 2022 ATM Agreement.

The Compensation Committee,

or the Compensation Committee, of the Board of Directors of the Company, or Board, approved, effective as of April 1, 2022, pursuant to

the terms of the Company’s Amended and Restated Non-Employee Directors Compensation Policy, which was most recently amended on February

10, 2022, or the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the two

non-employee directors of the Company then serving on the Board and a new grant for the newly appointed director, with each such grant

subject to stockholder approval of an increase of 1,800,000 shares of common stock in the number of authorized shares of common stock,

or the 2022 Plan Increase, available for issuance under the Company’s 2020 Equity Incentive Plan, or the 2020 Plan, at the Company’s

2022 annual meeting of stockholders, or the 2022 Annual Meeting.

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 directors then serving on the Board and for a grant of stock

options or $75,000 worth of RSUs for a newly elected director, with the RSUs priced at the average for the closing prices for the five

days preceding and including the date of grant, or $1.46 per share as of April 1, 2022.

The two then-current eligible directors each was

granted a contingent RSU in the amount of 34,247 shares under the 2020 Plan and the newly appointed director received a contingent RSU

grant for 51,370 shares under the 2020 Plan.

The contingent RSUs are subject to vesting in three installments, 50% on September 30,

2022, and 25% on each of December 31, 2022, and March 31, 2023, subject to stockholder approval of the 2022 Plan Increase at the 2022

Annual Meeting and subject to the recipient's continued service with the Company on each such vesting date.

Critical Accounting Policies

Use of Estimates

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of consolidated

68 unchanged sentences

Director Compensation Policy which provides for cash and equity compensation for persons serving as non-employee directors of the Company.

Under this policy, each new director receives either stock options or a grant of RSUs upon appointment/election, as well as an annual

grant of stock options or of RSUs at the beginning of each fiscal year.

The (i) stock options are subject to vesting and (ii) RSUs are

subject to vesting and represent the right to be issued on a future date shares of our common stock upon vesting.

On April 1, 2021, pursuant

to the terms of the Director Compensation Policy, the Compensation Committee granted RSUs under the 2020 Plan, to each non-employee director

of the Company.

The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each

fiscal year, with the RSUs priced at the average for the closing prices for the five days preceding and including the date of grant, or

$2.06 per share as of April 1, 2021.

Each eligible director was granted an RSU in the amount of 24,295 shares under the 2020 Plan.

RSUs were subject to vesting in four equal quarterly installments on June 30, September 30, December 31, 2021, and March 31, 2022, subject

to the recipient’s continued service with the Company on each such vesting date.

In June 2021, 18,221 vested

RSUs held by our non-employee directors were exchanged into the same number of shares of our common stock.

All three non-employee directors

elected to return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting

in 7,289 of the vested RSUs being cancelled in exchange for $35,786 in aggregate cash proceeds to those independent directors.

In September 2021, 18,221

vested RSUs held by our non-employee directors were exchanged into the same number of shares of our common stock.

All three non-employee

directors elected to return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances,

resulting in 7,289 of the vested RSUs being cancelled in exchange for $28,134 in aggregate cash proceeds to those independent directors.

In December 2021, 18,221 vested

RSUs held by our non-employee directors were exchanged into the same number of shares of our common stock.

All three non-employee directors

elected to return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting

in 7,289 of the vested RSUs being cancelled in exchange for $13,557 in aggregate cash proceeds to those independent directors.

In March 2022, 18,221 vested

RSUs held by our non-employee directors were exchanged into the same number of shares of our common stock.

All three non-employee directors

elected to return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting

in 7,289 of the vested RSUs being cancelled in exchange for $10,641 in aggregate cash proceeds to those independent directors.

There were no vested RSUs outstanding as of March

Under this policy, each new director receives either stock options or a grant of RSUs upon appointment/election, as well as either an

annual grant of stock options or of RSUs at the beginning of each fiscal year.

The (i) stock options are subject to vesting and (ii) RSUs

are subject to vesting and represent the right to be issued on a future date shares of our common stock upon vesting.

The Compensation Committee

of the Board of Directors of the Company, or Compensation Committee, approved, effective as of April 1, 2022, pursuant to the terms of

the Company’s Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, the grant of

the annual RSUs to each of the two non-employee directors of the Company then serving on the Board of Directors of the Company, or Board,

and the grant of an RSU for the then newly appointed director.

The RSU grants were made subject to stockholder approval of an increase

of 1,800,000 shares of common stock authorized for issuance under the Company’s 2020 Equity Incentive Plan, or the 2020 Plan, at

the Company’s 2022 annual meeting of stockholders.

The increase was approved at the Company’s 2022 annual meeting of stockholders

held in September 2022.

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 director, with each RSU priced at the average for the closing prices for the five days preceding and including

the date of grant, or $1.46 per share as of April 1, 2022.

The two then-current eligible directors each was granted a contingent RSU in

the amount of 34,247 shares under the 2020 Plan and the then newly appointed director received a contingent RSU grant for 51,370 shares

under the 2020 Plan.

The RSUs were subject to vesting in three installments, 50% on September 30, 2022, and 25% on each of December 31,

2022, and March 31, 2023, subject to the recipient's continued service with the Company on each such vesting date.

There were no vested RSUs

outstanding as of March 31, 2023.

Recent Events

Sales Under 2022 ATM Agreement

Subsequent to March 31, 2023,

we raised net proceeds of $1,086,119, net of $27,999 in commissions to Wainwright and $5,846 in other offering expense, through the sale

of 1,778,901 shares of our common stock at an average price of $0.61 per share under the 2022 ATM Agreement.

In April 2023, the Compensation

Committee approved, pursuant to the terms of 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.

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 directors then serving on the Board,

and for a grant of stock options or $75,000 worth of RSUs for a newly elected director, with each RSU priced at the average for the closing

prices for the five days preceding and including the date of grant, or $0.43 per share for the April 2023 RSU grants.

As a result, in

April 2023 the three eligible directors each was granted an RSU in the amount of 116,279 shares under the 2020 Plan.

The RSUs are subject

to vesting in four equal installments, with 25% of the restricted stock units vesting on each of June 30, 2023, September 30, 2023, December

31, 2023, and March 31, 2024, subject in each case to the director’s Continuous Service (as defined in the 2020 Plan), through such

Vesting will terminate upon the director’s termination of Continuous Service prior to any vesting date.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a Smaller Reporting Company,

we are not required to furnish information under this Item 7A.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial

statements listed in the accompanying Index to Financial Statements are attached hereto and filed as a part of this Annual Report under

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

Not applicable to a “smaller

reporting company” as defined under Item 10(f)(1) of Regulation S-K of the Securities Act.

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 7. Management’s Discussion and Analysis