What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-06-28 compared with 2022-06-28 · 449 added, 564 removed, 815 unchanged (55% of the section changed)

4 unchanged sentences

required to be disclosed, in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified

in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal

executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive

Officer and Chief Financial Officer (who are our principal executive officer and principal financial officer, respectively), to allow

timely decisions regarding required disclosures.

In designing and evaluating

the disclosure controls and procedures, we recognized that any controls and procedures, no matter how well designed and operated, can

provide only reasonable assurance of achieving the desired control objectives, and we were required to apply our judgment in evaluating

the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation as of the end of the period covered

by this Annual Report under the supervision and with the participation of our management, including our Chief Executive Officer and Chief

Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,

can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in

evaluating the cost-benefit relationship of possible controls and procedures.

We have carried out an evaluation as of the end of the period

covered by this Annual Report under the supervision and with the participation of our management, including our Chief Executive Officer

and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based on such evaluation,

21 unchanged sentences

OTHER INFORMATION

We have no disclosure applicable to this item.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

We have no disclosure applicable to this item.

Certain information required by Part III is omitted

from this Annual Report and incorporated by reference to our definitive proxy statement for our 2022 Annual Meeting of Stockholders, or

the Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act.

If our Proxy Statement is not filed within 120 days after

the end of the fiscal year covered by this Annual Report, the omitted information will be included in an amendment to this Annual Report

filed not later than the end of such 120-day period.

Not applicable.

Certain information required

by Part III is omitted from this Annual Report and incorporated by reference to our definitive proxy statement for our 2023 Annual Meeting

of Stockholders, or the Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act.

If our Proxy Statement is not filed

within 120 days after the end of the fiscal year covered by this Annual Report, the omitted information will be included in an amendment

to this Annual Report filed not later than the end of such 120-day period.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Except as set forth below, the information required

by this item will be contained in the sections titled “Information About our Board of Directors and Executive Officers,” “Information

About our Board of Directors and Executive Officers – Code of Ethics,” “Delinquent Section 16(a) Reports,” “Information

Except as set forth below,

the information required by this item will be contained in the sections titled “Information About our Board of Directors and Executive

Officers,” “Information About our Board of Directors and Executive Officers – Code of Ethics,” “Information

About our Board of Directors and Executive Officers – Information Regarding Committees of the Board of Directors – Nominating

2 unchanged sentences

About our Board of Directors and Executive Officers – Information Regarding Committees of the Board of Directors – Compensation

Committee” and “Executive Compensation and Director Compensation” in our Proxy Statement and is incorporated herein

by reference.

Committee” and “Executive and Director Compensation” in our Proxy Statement and is incorporated herein by reference.

EXECUTIVE COMPENSATION

The information required by this item will be contained

in the sections titled “Executive and Director Compensation” and “Information About our Board of Directors and Executive

Officers – Information Regarding Committees of the Board of Directors – Compensation Committee” in our Proxy Statement

and is incorporated herein by reference.

The information required by

this item will be contained in the sections titled “Executive and Director Compensation” and “Information About our

Board of Directors and Executive Officers – Information Regarding Committees of the Board of Directors – Compensation Committee”

in our Proxy Statement and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The information required by this item will be contained

in the sections titled “Security Ownership of Certain Beneficial Owners and Management” and “Executive and Director

Compensation – Narrative Disclosure to Executive Summary – Equity-Based Incentive Awards” in our Proxy Statement and

is incorporated herein by reference.

The information required by

this item will be contained in the sections titled “Security Ownership of Certain Beneficial Owners and Management” and “Executive

and Director Compensation – Narrative Disclosure to Executive Summary – Equity-Based Incentive Awards” in our Proxy

Statement and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR

The information required by this item will be contained

in the sections titled “Information About our Board of Directors and Executive Officers – Board of Directors” and “Certain

Relationships and Related Transactions” in our Proxy Statement and is incorporated herein by reference.

The information required by

this item will be contained in the sections titled “Information About our Board of Directors and Executive Officers – Board

of Directors” and “Certain Relationships and Related Transactions” in our Proxy Statement and is incorporated herein

by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will be contained

in the section titled “Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement

and is incorporated herein by reference.

The information required by

this item will be contained in the section titled “Ratification of Appointment of Independent Registered Public Accounting Firm”

in our Proxy Statement and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report:

Consolidated Financial Statements for the years ended March 31,

2022 and 2021:

Report of Independent Registered Public Accounting

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(a)(1) Financial Statements.

The response to this portion of Item 15 is set

forth under Part II, Item 8 above.

(a)(2) Financial Statement Schedules.

All schedules have been omitted because they are

not required or because the required information is given in the Financial Statements or Notes thereto set forth under Item 8 above.

(a)(3) Exhibits required by Item 601 of Regulation

Incorporated by Reference

Exhibit Description

Articles of Incorporation.

Filed Herewith

Articles of Incorporation, as amended.

September 19, 2022

Amended and Restated Bylaws of the Company.

2 unchanged sentences

December 31, 2014

Form of Common Stock Purchase Warrant dated August 29, 2012.

September 6, 2012

Form of Common Stock Purchase Warrant dated October, November and December 2012.

February 13, 2013

Form of Common Stock Purchase Warrant dated June 14, 2013.

August 13, 2013

Form of Common Stock Purchase Warrant dated June 24, 2014.

June 30, 2014

Form of Common Stock Purchase Warrant dated July 24, 2014.

July 28, 2014

Form of Common Stock Purchase Warrant dated August and September 2014.

November 10, 2014

Form of Warrant Agreement dated March 27, 2017.

March 22, 2017

Form of Warrant dated _______, 2017.

September 18, 2017

Form of Warrant to Purchase Common Stock.

7 unchanged sentences

Aethlon Medical, Inc.

Amended and Restated Non-Employee Directors Compensation Policy, as Modified on February 10, 2022.++

Amended and Restated Non-Employee Director Compensation Policy, as Modified on February 10, 2022.

February 14, 2022

4 unchanged sentences

February 11, 2019

Incorporated by Reference

Exhibit Description

Filed Herewith

Form of Option Grant Agreement for Officers and Directors.

7 unchanged sentences

Amendment to SBIR Phase II Award Contract, by and among Aethlon Medical, Inc., the National Institutes of Health and the National Cancer Institute, dated October 28, 2020.

June 28, 2022

Assignment Agreement, by and between Aethlon Medical, Inc.

15 unchanged sentences

February 10, 2021

Executive Employment Agreement, by and between Aethlon Medical, Inc.

Arnold, Ph.D., dated February 1, 2023.

February 13, 2023

Lease between Aethlon Medical, Inc.

4 unchanged sentences

March 24, 2022

Incorporated by Reference

Exhibit Description

Filed Herewith

Amendment No.

1 to Executive Employment Agreement, by and between Aethlon Medical, Inc.

Arnold, Ph.D., dated May 1, 2023.

List of Subsidiaries.

December 31, 2014

Consent of Independent Registered Public Accounting Firm.

Certification of our Chief Executive Officer, pursuant to Securities Exchange Act rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Certification of our Chief Financial Officer, pursuant to Securities Exchange Act rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Statement of our Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Power of Attorney (see signature page)

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of the Principal Executive Officer pursuant to Rule 13a-14(b) or 15d-14(b) of the Exchange Act and 18 U.S.C.

Section 1350.

Statement of our Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.

Certification of the Principal Financial Officer pursuant to Rule 13a-14(b) or 15d-14(b) of the Exchange Act and 18 U.S.C.

Section 1350.

XBRL Instance Document

XBRL Schema Document

XBRL Calculation Linkbase Document

XBRL Definition Linkbase Document

XBRL Label Linkbase Document

XBRL Presentation Linkbase Document

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101)

__________________

3 unchanged sentences

of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on

its behalf by the undersigned, thereunto duly authorized, o n the 28 th d ay of

its behalf by the undersigned, thereunto duly authorized, o n the 28 th d ay

of June, 2023.

/s/ CHARLES J.

Fisher, Jr., M.D.

Chief Executive Officer

14 unchanged sentences

/s/ CHARLES J.

FISHER, JR., MD

Chief Executive Officer, Principal Executive Officer and Director

June 28, 2023

Fisher, Jr., MD

Chief Financial Officer and Principal Accounting Officer

Fisher, Jr., M.D.

Chief Financial Officer and Principal Financial and Accounting Officer

June 28, 2023

8 unchanged sentences

/s/ GUY CIPRIANI

SVP and Chief Business Officer and Director

Senior Vice President, Chief Business Officer and Director

June 28, 2023

AETHLON MEDICAL, INC.

AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

55 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2022

March 31, 2021

CURRENT ASSETS

Cash and cash equivalents

Accounts receivable

16 unchanged sentences

STOCKHOLDERS’ EQUITY

Common stock, $ 0.001 par value, 30,000,000 shares authorized at March 31, 2022 and 2021;

15,419,163 and 12,150,597 issued and outstanding at March 31, 2022 and 2021, respectively

Common stock, $ 0.001 par value, 60,000,000 and 30,000,000 shares authorized at March 31, 2023 and 2022, respectively;

22,992,466 and 15,419,163 shares issued and outstanding at March 31, 2023 and 2022, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

9 unchanged sentences

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

Years Ended March 31,

9 unchanged sentences

( 10,420,885 )

OTHER EXPENSE (INCOME)

Loss on dissolution of subsidiary

Interest income

Other expense (income)

NET LOSS BEFORE NONCONTROLLING INTERESTS

5 unchanged sentences

( 10,416,091 )

OTHER COMPREHENSIVE LOSS

COMPREHENSIVE LOSS

$ ( 12,035,927 )

$ ( 10,416,091 )

Basic and diluted net loss per share attributable to common stockholders

7 unchanged sentences

MEDICAL, INC.

COMPREHENSIVE

BALANCE - MARCH 31, 2021

3 unchanged sentences

Issuances of common stock for cash under at the market program

Issuances of common stock for cash in registered direct financing

Issuances of common stock for cash under warrant exercises

Issuances of common stock for cash under stock option exercises

Issuances of common stock under cashless warrant exercises

Issuance of common shares upon vesting of restricted stock units and net

5 unchanged sentences

$ 147,446,868

$ ( 130,329,181 )

$ ( 141,708 )

Issuances of common stock for cash under at the market program

Issuances of common stock for cash in registered direct financing

Issuances of common stock for cash under warrant exercises

Issuances of common stock for cash under stock option exercises

Issuances of common stock under cashless warrant exercises

Issuance of common shares upon vesting of restricted stock units and net

stock option exercise

Issuance of common shares upon vesting of restricted stock units

Loss on dissolution of subsidiary

Stock-based compensation expense

1 unchanged sentence

( 12,029,786 )

Other comprehensive loss

BALANCE - MARCH 31, 2023

1 unchanged sentence

$ ( 142,358,554 )

$ ( 141,708 )

See accompanying notes to the consolidated financial

3 unchanged sentences

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

Years Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Stock based compensation

Loss of dissolution of subsidiary

Accretion of right-of-use lease asset

15 unchanged sentences

Net cash provided by financing activities

Net increase in cash and restricted cash

Effect of Exchange Rate on Changes on Cash

Net (decrease) increase in cash and restricted cash

( 2,533,519 )

Cash and restricted cash at beginning of year

14 unchanged sentences

ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Aethlon Medical, Inc.

(collectively, “Aethlon”,

the “Company”, “we” or “us”) is a medical technology company focused on developing products to diagnose

and treat life and organ threatening diseases.

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:

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 diseases.

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

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:

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

4 unchanged sentences

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, including head and neck cancer, gastrointestinal cancers and

other cancers.

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

the COVID-19 global 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

On October 4, 2019, the FDA approved our Investigational

1 unchanged sentence

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 treated two patients and is in the process of recruiting additional patients.

We are considering adding one or more additional sites

to this trial to accelerate patient recruitment and we are also considering starting additional trials in other forms of cancer.

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

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.

We anticipate

that the initial clinical trials will begin in Australia.

We also believe the Hemopurifier can be part of

3 unchanged sentences

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, and the reconstructed Spanish

flu virus of 1918.

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

1 unchanged sentence

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).

Under Single Patient Emergency Use regulations, the Company has also treated two 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 hospitals activated for patient enrollment and they are actively screening

patients for the trial.

These sites include LSU Shreveport, Valley Baptist Medical Center in Texas, Loma Linda Medical Center, Hoag Irvine

and Newport Beach, University of California Davis, University of Miami Medical Center, Cooper Medical and Thomas Jefferson Medical Center.

We are in the site activation process with three 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.

One patient recently has completed treatment protocol in this trial.

We are also 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.

consolidate ESI’s activities in our consolidated financial statements.

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.

There were only insignificant expenses in that subsidiary in the three months ended

December 31, 2022.

We also obtained Ethics Review 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.

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

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.

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.

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 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 on our timelines and future access to capital.

We are continuing to monitor the spread of COVID-19 and its potential impact on

our operations.

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, including actions taken to contain or treat

COVID-19 and their effectiveness, as well as the economic impact on national and international markets.

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

6 unchanged sentences

Management expects existing cash as of March 31,

2022 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these consolidated financial

2023 and funds raised subsequent to that date to be sufficient to fund the Company’s operations for at least twelve months from

the issuance date of these consolidated financial statements.

PRINCIPLES OF CONSOLIDATION

1 unchanged sentence

include the accounts of Aethlon Medical, Inc.

and its majority-owned ( 80 % ownership) and controlled subsidiary, Exosome Sciences, Inc.,

All significant intercompany balances and transactions have been eliminated in consolidation.

The Company has classified the (20%

ownership) noncontrolling interests in ESI as part of consolidated net loss in the fiscal years ended March 31, 2022 and 2021 and includes

the accumulated amount of noncontrolling interests as part of equity.

The losses at ESI during the fiscal year ended

March 31, 2022 reduced the noncontrolling interests on our consolidated balance sheet by $4,794 from $( 136,914 ) at March 31, 2021 to $( 141,708 )

at March 31, 2022.

and its wholly owned subsidiary, Aethlon Medical Australia Pty Ltd, as well as its previously

majority-owned subsidiary, ESI, which dissolved in September 2022.

All significant inter-company transactions and balances have been eliminated

in consolidation.

The consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of

management, are necessary to present fairly the consolidated financial statements as of and for the fiscal years ended March 31, 2023

and 2022, and the consolidated statement of cash flows for the fiscal years ended March 31, 2023 and 2022.

Estimates were made relating

to useful lives of fixed assets, impairment of assets, share-based compensation expense and accruals for clinical trial and research and

development expenses.

RISKS AND UNCERTAINTIES

26 unchanged sentences

any investment redeemable without penalty or loss of interest to be cash equivalents.

As of March 31, 2022 and 2021, we had no assets

that were classified as cash equivalents.

Cash is carried at cost, which approximates fair

value, and cash equivalents are carried at fair value.

As of March 31, 2023, our cash and cash equivalents

were comprised of the following instruments:

Schedule of cash and cash equivalents

Cash in US bank checking account

Cash equivalents held in US Treasury bills

Cash in Australian bank checking account

Total cash and cash equivalents

As of March 31, 2022, we had no assets that were

classified as cash equivalents.

CONCENTRATIONS OF CREDIT RISKS

Cash is maintained at one financial institution

in checking accounts.

Cash is maintained at one US financial institution

in a checking account.

Accounts at this institution are secured by the Federal Deposit Insurance Corporation up to $250,000.

31, 2023 cash balances were approximately $ 574,572 over such insured amount.

We do not believe

that the Company is exposed to any significant risk with respect to its cash.

All of our accounts receivable at March 31, 2022

and all of our revenue in the fiscal years ended March 31, 2022 and 2021 related to our government contracts.

To comply with the terms of our new laboratory,

office, and manufacturing space leases, we caused our bank to issue two standby letters of credit, or the L/C’s, in the amount of

$ 87,506 in favor of the landlord.

The L/C’s are in lieu of a security deposit.

In order to support the L/C’s, we agreed to

have our bank withdraw $87,506 from our operating accounts and to place that amount in restricted certificates of deposit.

We have classified

that amount as restricted cash, a long-term asset, on our balance sheet.

We do not believe that

the Company is exposed to any significant risk with respect to its cash in that checking account.

31, 2023, we maintained cash equivalents of approximately $ 13.9 million in US Treasury bills with maturities of less than three months.

We do not believe that the Company is exposed to any significant risk with respect to its cash equivalents since they represent US government

Cash is maintained at one Australian financial

institution in checking accounts.

Accounts at this institution are secured by the Financial Claims Scheme for up to Australian $ 250,000 .

Our March 31, 2023 Australian cash balance was below that threshold.

All of our revenue in the fiscal years ended March

31, 2023 and 2022 related to our government contracts.

We did not have any accounts receivable at March 31, 2023.

RESTRICTED CASH

To comply with the terms of our laboratory, office,

and manufacturing space leases, we caused our bank to issue two standby letters of credit, or the L/Cs, in the amount of $ 87,506 in favor

of the landlord.

The L/Cs are in lieu of a security deposit.

In order to support the L/Cs, we agreed to have our bank withdraw $87,506

from our operating accounts and to place that amount in restricted certificates of deposit.

We have classified that amount as restricted

cash, a long-term asset, on our balance sheet.

PROPERTY AND EQUIPMENT

29 unchanged sentences

warrants were excluded as their inclusion would be antidilutive.

We operate our businesses principally through

two reportable segments:

Aethlon, which represents our therapeutic business activities, and ESI, which represents our diagnostic business.

Our reportable segments have been determined based on the nature of the potential products being developed.

We record discrete financial

information for ESI, consisting of patent maintenance costs.

Aethlon’s revenue is generated primarily

from government contracts to date and ESI does not have any revenues or activities other than patent maintenance.

We have not included

any allocation of corporate overhead to the ESI segment.

DEFERRED FINANCING COSTS

60 unchanged sentences

We have recognized revenue under the following

three government contracts/grants over the past two years:

contracts/grants:

Phase 2 Melanoma Cancer Contract

On September 12, 2019, the National Cancer Institute,

or NCI, part of the National Institutes of Health, or 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.

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

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.

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 involve 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 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.

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 Small Business Innovation Research,

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

or the Breast Cancer Grant.

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 with us.

subcontractors were University of Pittsburgh and Massachusetts General Hospital.

As of December 31, 2020, we have received all of the

funds allocated to the Breast Cancer Grant.

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.

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 no t 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.

STOCK-BASED COMPENSATION

13 unchanged sentences

expenses relating to shares and options granted and the effect on loss per common share during the years ended March 31, 2023 and 2022:

Share-based compensation expenses

Schedule of share-based compensation expenses

Fiscal Years Ended

14 unchanged sentences

We recognize share-based compensation expense

related to stock options and SARs granted to employees, directors and consultants based on the estimated fair value of the awards on the

date of grant.

We estimate the grant date fair value, and the resulting share-based compensation expense, for stock options that only

have service vesting requirements or performance-based vesting requirements without market conditions using the binomial lattice option-pricing

The grant date fair value of the share-based awards with service vesting requirements is generally recognized on a straight-line

basis over the requisite service period, which is generally the vesting period of the respective awards.

Determining the appropriate amount

to expense for performance-based awards based on the achievement of stated goals requires judgment.

The estimate of expense is revised

periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate.

The cumulative

impact of any revisions is reflected in the period of change.

If any applicable financial performance goals are not met, no compensation

cost is recognized and any previously recognized compensation cost is reversed.

For performance-based awards with market conditions, we

determine the fair value of awards as of the grant date using a Monte Carlo simulation model.

related to stock options and stock appreciation rights granted to employees, directors and consultants based on the estimated fair value

of the awards on the date of grant.

We estimate the grant date fair value, and the resulting share-based compensation expense, for stock

options that only have service vesting requirements or performance-based vesting requirements without market conditions using the binomial

lattice option-pricing model.

The grant date fair value of the share-based awards with service vesting requirements is generally recognized

on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards.

the appropriate amount to expense for performance-based awards based on the achievement of stated goals requires judgment.

of expense is revised periodically based on the probability of achieving the required performance targets and adjustments are made as

The cumulative impact of any revisions is reflected in the period of change.

If any applicable financial performance goals

are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed.

For performance-based awards

with market conditions, we determine the fair value of awards as of the grant date using a Monte Carlo simulation model.

We review share-based compensation on a quarterly

33 unchanged sentences

842, “Leases,” utilizing the alternative transition method allowed for under this guidance.

As a result, the Company recorded lease

liabilities and right-of-use lease assets on its balance sheet.

As a result, the Company recorded

lease liabilities and right-of-use lease assets on its balance sheet.

Topic 842 also allows lessees and lessors to elect

38 unchanged sentences

or the 2022 ATM Agreement, with H.C.

Wainwright & Co., LLC, or 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.

Wainwright & Co., LLC, or 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 Securities Act, pursuant to our shelf registration statement on Form S-3 (Registration Statement No.

333-237269), as previously filed

with the Securities and Exchange Commission, or SEC, and declared effective on March 30, 2020.

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

333-259909), as previously

filed with the Securities and Exchange Commission, or SEC, and declared effective on October 21, 2021.

We filed a prospectus supplement,

with the SEC, dated March 22, 2021, in connection with the offer and sale of the shares of common stock, pursuant to which we could offer

and sell shares of common stock having an aggregate offering price of up to $5,080,000 from time to time.

Subject to the terms and conditions set forth in the 2021 ATM Agreement,

Wainwright agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares

under the 2021 ATM Agreement from time to time, based upon our instructions.

We provided Wainwright with customary indemnification rights

under the 2021 ATM Agreement, and Wainwright was 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 2021

ATM Agreement.

The 2021 ATM Agreement provided that it would terminate upon the written termination by either party as permitted thereunder.

Sales of the shares, under the 2021 ATM Agreement are 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.

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 31, 2022, we raised aggregate net proceeds

under the 2021 ATM Agreement described above of $ 4,947,785 , net of $ 126,922 in commissions to Wainwright and $ 2,154 in other offering

expense, through the sale of 626,000 shares of our common stock at an average price of $ 7.90 per share of net proceeds.

No further sales

can be made under the 2021 ATM Agreement.

Registered Direct Financing

In the fiscal year ended March 31, 2022, we sold an aggregate of 1,380,555

shares of our common stock at a purchase price per share of $ 9.00 , for aggregate net proceeds to us of $ 11,659,044 , after deducting fees

payable to Maxim Group LLC, the placement agent, and other offering expenses.

These shares were sold through a securities purchase agreement

with certain institutional investors.

The shares were issued pursuant to an effective shelf registration statement on Form S-3, which

was originally filed with the SEC on March 19, 2020, and was declared effective on March 30, 2020 (File No.

333-237269) and a prospectus

supplement thereunder.

Warrant Exercises

In the fiscal year ended March 31, 2022, pursuant to the exercise of

outstanding warrants to purchase 531,167 shares of our common stock, we received proceeds in the amount of $ 820,938 from institutional

Also in the fiscal year ended March 31, 2022, pursuant to the exercise

of 874,664 outstanding warrants on a cashless basis, we issued 675,554 shares of our common stock.

The difference of 199,110 shares of

common stock issuable pursuant to the warrants were cancelled.

Stock Option Exercises

In the fiscal year ended March 31, 2022, former employees paid us an

aggregate of $ 28,325 for the exercise of outstanding options to purchase 11,562 shares of our common stock.

2022 At The Market Offering Agreement with H.C.

On March 24, 2022, we entered into an At The Market

Offering Agreement, or 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 2022 ATM Agreement 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.

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 2022 ATM

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

15 unchanged sentences

for certain specified expenses in connection with entering into the 2022 ATM Agreement.

As of March 31, 2022, we had not sold any 2022 ATM Shares under 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.

RSU Grants to Non-Employee Directors

The Company maintains an Amended and Restated

Non-Employee Director Compensation Policy, which was most recently amended on February 10, 2022, or the Director Compensation Policy,

that provides 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 either an annual grant of stock options or 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.

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.

Equity Transactions in the Fiscal Year Ended March 31, 2022.

2021 At The Market Offering Agreement with H.C.

On March 22, 2021, we entered 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 under the Securities

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

333-237269), as previously filed with the SEC

and declared effective on March 30, 2020.

We filed a prospectus supplement with the SEC, dated March 22, 2021, in connection

with the offer and sale of the shares of common stock, pursuant to which we could offer and sell shares of common stock having an aggregate

offering price of up to $5,080,000 from time to time.

Subject to the terms and conditions set forth

in the 2021 ATM Agreement, Wainwright agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices

to sell the shares under the 2021 ATM Agreement from time to time, based upon our instructions.

We provided Wainwright with customary

indemnification rights under the 2021 ATM Agreement, and Wainwright was 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 2021 ATM Agreement.

The 2021 ATM Agreement provided that it would terminate upon the written termination by either

party as permitted thereunder.

Sales of the shares, under the 2021 ATM Agreement

are 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.

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 31, 2022, we raised

aggregate net proceeds under the 2021 ATM Agreement described above of $ 4,947,785 , net of $ 126,922 in commissions to Wainwright and $ 2,154

in other offering expense, through the sale of 626,000 shares of our common stock at an average price of $ 7.90 per share of net proceeds.

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

Registered Direct Financing

In the fiscal year ended March 31, 2022, we sold

an aggregate of 1,380,555 shares of our common stock at a purchase price per share of $9.00, for aggregate net proceeds to us of $ 11,659,044 ,

after deducting fees payable to Maxim Group LLC, the placement agent, and other offering expenses.

These shares were sold through a securities

purchase agreement with certain institutional investors.

The shares were issued pursuant to an effective shelf registration statement

on Form S-3, which was originally filed with the SEC on March 19, 2020, and was declared effective on March 30, 2020 (File No.

and a prospectus supplement thereunder.

Warrant Exercises

In the fiscal year ended March 31, 2022, pursuant

to the exercise of outstanding warrants to purchase 531,167 shares of our common stock, we received proceeds in the amount of $ 820,938

from institutional investors.

Also in the fiscal year ended March 31, 2022,

pursuant to the exercise of 874,664 outstanding warrants on a cashless basis, we issued 675,554 shares of our common stock.

The difference

of 199,110 shares of common stock issuable pursuant to the warrants were cancelled.

Stock Option Exercises

In the fiscal year ended March 31, 2022, former

employees paid us an aggregate of $ 28,325 for the exercise of outstanding options to purchase 11,562 shares of our common stock.

RSU Grants to Non-Employee Directors

The Company maintains the 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 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.

On April 1, 2021, pursuant to the Director Compensation

Policy, the Compensation Committee, or Compensation Committee, of the Company’s Board of Directors, or Board, granted RSUs under

the Company’s 2020 Equity Incentive Plan, or the 2020 Plan, to each non-employee director of the Company.

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

The Director Compensation

26 unchanged sentences

There were no vested RSUs outstanding as of March

Equity Transactions in the Fiscal Year Ended March 31, 2021.

2016 Common Stock Sales Agreement with H.C.

Wainwright & Co.,

On June 28, 2016, we entered into a Common Stock

Sales Agreement, or the 2016 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 2016 Agreement.

The 2016 Agreement provided for the sale of

shares of our common stock having an aggregate offering price of up to $12,500,000.

On March 30, 2020, we executed Amendment No.

to the 2016 Agreement with Wainwright, effective as of the same date.

The amendment provides that references in the 2016 Agreement to

the registration statement shall refer to the registration statement on Form S-3 (File No.

333-237269), originally filed with the SEC

on March 19, 2020, declared effective by the SEC on March 30, 2020.

Subject to the terms and conditions set forth

in the 2016 Agreement, Wainwright agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices

to sell the shares under the 2016 Agreement from time to time, based upon our instructions.

We provided Wainwright with customary indemnification

rights under the 2016 Agreement, and Wainwright is entitled to a commission at a fixed rate equal to three percent of the gross proceeds

per share sold.

In addition, we agreed to pay certain expenses incurred by Wainwright in connection with the 2016 Agreement, including

up to $50,000 of the fees and disbursements of their counsel.

The 2016 Agreement will terminate upon the sale of all of the shares under

the 2016 Agreement, unless terminated earlier by either party as permitted under the 2016 Agreement.

No further sales can be made under

the 2016 Agreement.

2021 At the Market Offering Agreement with

Wainwright & Co., LLC

On March 22, 2021, we entered into the 2021 ATM

Agreement with Wainwright.

In the fiscal year ended March 31, 2021, we raised

aggregate net proceeds of $ 7,260,869 , net of $ 224,825 in commissions to Wainwright and $ 8,472 in other offering expenses under the 2021

ATM Agreement through the sale of 2,685,600 shares at an average price of $ 2.70 per share of net proceeds.

RSU Grants to Non-Employee Directors

The Company maintains the Director Compensation

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

Under this program, 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

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 3, 2020, pursuant to the Director

Compensation Policy, the Compensation Committee granted RSUs to each non-employee director of the Company.

The then current Director

Compensation Policy provided for a grant of RSUs with a grant date fair value of $35,000,

priced at the average of the closing prices for the five trading days ending on the date of grant, which was $ 1.41

per share, so that the total number of RSUs to be granted to each non-employee director for fiscal year 2020 would be 24,822

shares of our common stock.

On April 3, 2020, each eligible director was granted an RSU for 23,893

shares under the Company’s 2010 Stock Plan, or the 2010 Plan, as the number of shares that remained available for grant under

the 2010 Plan was not sufficient for each director’s full RSU grant.

The Compensation Committee also granted to each eligible

director a contingent RSU grant under our 2020 Plan for the remaining portion of the annual RSU grants, or 929 RSU’s to each

eligible director, contingent upon stockholder approval of the 2020 Plan at the Company’s 2020 Annual Meeting of Stockholders,

or the 2020 Annual Meeting, which approval was obtained in September 2020.

These grants were subject to vesting as follows:

the RSUs subject to the grants vested on December 31, 2020 and 50% of the RSUs vested on March 31, 2021.

In June 2020, 29,866 vested RSUs held by our non-employee

directors were exchanged into the same number of shares of our common stock.

All five 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 11,947 of the vested

RSUs being cancelled in exchange for $ 24,251 in aggregate cash proceeds to those independent directors.

In September 2020, 29,866 vested RSUs held by

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

All five 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

11,947 of the vested RSUs being cancelled in exchange for $ 16,128 in aggregate cash proceeds to those independent directors.

As noted above, in September 2020, our stockholders

approved the 2020 Plan at the 2020 Annual Meeting, at which point the grants of 929 RSUs to each of our eligible independent directors

for a total of 4,645 RSUs were considered effective and no longer contingent as of that date.

In December 2020, 32,189 vested RSUs held by our

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

All five 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 12,876 of

the vested RSUs being cancelled in exchange for $ 31,802 in aggregate cash proceeds to those independent directors.

In March 2021, 32,189 vested RSUs held by our

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

All five 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 12,875 of the vested

RSUs being cancelled in exchange for $ 26,136 in aggregate cash proceeds to those independent directors.

There were no vested RSUs outstanding as of March

Restricted Stock Grant to Consultant

In February 2021, our Board approved a restricted

stock grant of 7,758

shares to an investor relations consultant.

Those shares were valued at $ 18,000

based on our closing price on the date of the approval.

The shares vested quarterly over a twelve month period and were issued

under our 2020 Plan.

During the years ended March 31, 2022 and 2021, we recorded non-cash stock-based compensation expense of $ 16,500

and $ 1,500 , respectively,

related to this grant.

We did not issue any warrants during the fiscal

7 unchanged sentences

Outstanding, beginning of year

( 1,206,721 )

Cancelled/Forfeited

21 unchanged sentences

compensation.

NON-EMPLOYEE DIRECTORS COMPENSATION POLICY

In September 2022, our stockholders approved an

increase in the number of shares of common stock authorized for issuance under the 2020 Plan by 1,800,000 shares.

As of March 31, 2023,

there were 1,667,479 shares available under the 2020 Plan.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

The Company maintains the Director Compensation

5 unchanged sentences

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

Please see above under the heading "Equity Transactions

in the Fiscal Year Ended March 31, 2022—RSU Grants to Non-Employee Directors" for disclosure regarding equity awards under the

Director Compensation Policy during the fiscal year ended March 31, 2022.

Please see above under the heading "Equity

Transactions in the Fiscal Year Ended March 31, 2023—RSU Grants to Non-Employee Directors" for disclosure regarding equity

awards under the Director Compensation Policy during the fiscal year ended March 31, 2023.

STOCK OPTION ACTIVITY

During the fiscal year ended March 31, 2023, we

issued a stock option grant to our Chief Executive Officer, or CEO, for the purchase of 266,888 shares of our common stock under our 2020

The purchase price for the shares subject to the option is $ 5.17 per share, the fair market value of the common stock on the date

of the grant.

The shares subject to the option are subject to vesting over four years, commencing on the date of grant, or Vesting Commencement

Date, with twenty-five percent (25%) of the shares subject to the option vesting on the first anniversary of the Vesting Commencement

Date and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, in each case subject to

Fisher’s Continuous Service (as defined in the 2020 Plan) through each vesting date.

On February 10, 2022, after review of data provided

by the Company’s independent compensation consultant, our Compensation Committee awarded stock option grants to each of our executive

Each executive officer was granted an option to purchase shares of our common stock under the 2020 Plan, at an exercise price

equal to the fair market value on the date of grant, or $1.41 per share.

The Compensation Committee awarded the grants as follows:

Chief Executive Officer was granted an option to purchase 192,600 shares of common stock, and the Chief Medical Officer, Chief Operating

Officer and Chief Financial Officer each were granted an option to purchase 100,200 shares of common stock.

The options are subject to

vesting over four years at the rate of 25 % at the end of the first year following the grant date, then monthly vesting over the following

36 months, subject to Continuous Service with the Company, as defined in the 2020 Plan.

issued stock option grants to two executives for the purchase of an aggregate of 266,888 shares of our common stock under our 2020 Plan.

The weighted-average exercise prices for the shares subject to the options is $ 0.95 per share, which exercise prices were based on the

fair market value of the common stock on the applicable grant dates.

The shares subject to the options are subject to vesting over four

years, commencing on the grant dates, or Vesting Commencement Dates, with twenty-five percent (25%) of the shares subject to the option

vesting on the first anniversary of the Vesting Commencement Date and the remaining shares vesting in equal monthly installments over

the following thirty-six (36) months.

Options outstanding that were vested as of March

4 unchanged sentences

outstanding at March 31, 2023 and 2022 and the changes during the years then ended:

Summary of stock options outstanding

Schedule of stock option activity

Fiscal Year Ended March 31,

16 unchanged sentences

We recorded stock-based compensation expense related

to restricted stock unit issuances and to options granted totaling $ 750,621 and $ 779,421 for the fiscal years ended March 31, 2022 and

2021, respectively.

These expenses were recorded as stock compensation included in payroll and related expenses in the accompanying consolidated

statement of operations for the years ended March 31, 2022 and 2021.

to RSU issuances and to options granted totaling $ 1,051,898 and $ 750,621 for the fiscal years ended March 31, 2023 and 2022, respectively.

These expenses were recorded as stock compensation included in payroll and related expenses in the accompanying consolidated statement

of operations for the years ended March 31, 2023 and 2022.

Our total stock-based compensation for fiscal

37 unchanged sentences

March 31, 2022

Accrued separation expenses for former executive

Accrued professional fees

13 unchanged sentences

Deferred tax assets:

Capitalized research and development

Research and development credit carryforwards

Capitalized research and development costs

Net operating loss carryforwards (1)

7 unchanged sentences

Net deferred tax assets

______________

Pursuant to Internal Revenue Code Section 382, use of our tax net operating loss

carryforwards may be limited.

At March 31, 2023, we had tax net operating loss

34 unchanged sentences

We are currently not under examination by any taxing

We operate our businesses principally through

two reportable segments:

Aethlon, which represents our therapeutic business activities, and ESI, which represents our diagnostic business.

Our reportable segments have been determined based on the nature of the potential products being developed.

We record discrete financial

information for ESI, consisting of patent maintenance costs.

Aethlon’s revenue is generated primarily from government contracts

to date and ESI does not have any revenues or activities other than patent maintenance.

We have not included any allocation of corporate

overhead to the ESI segment.

The following tables set forth certain information regarding our segments:

Schedule of segments

Fiscal Years Ended March 31,

Total Revenues

Operating Losses:

$ ( 10,396,914 )

$ ( 7,867,547 )

Total Operating Loss

$ ( 10,420,885 )

$ ( 7,891,499 )

$ ( 10,396,914 )

$ ( 7,867,547 )

Net Loss Before Non-Controlling Interests

$ ( 10,420,885 )

$ ( 7,891,499 )

Total Assets:

Depreciation and Amortization:

Total Depreciation and Amortization

Capital Expenditures:

Capital Expenditures

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

LEASE COMMITMENTS

Previous Office and Lab Leases

In September 2021, our lease of approximately

2,600 square feet of our previous executive office space at 9635 Granite Ridge Drive, Suite 100, San Diego, California 92123 expired.

Through December 31, 2021, we rented approximately

1,700 square feet of laboratory space at 11585 Sorrento Valley Road, Suite 109, San Diego, California 92121, at the rate of $6,148 per

month on a one-year lease that originally was to expire on November 30, 2020.

In December 2020, we entered into a short-term lease extension

running from December 1, 2020 through the completion date of our construction of our new laboratory space which is adjacent to our current

New Office and Lab Leases

Office, Lab and Manufacturing Space Leases

In December 2020, we entered into an agreement

3 unchanged sentences

carries a term of 63 months and we took possession of the office space effective October 1, 2021.

We took possession of the lab space

effective January 1, 2022.

On October 1, 2021, we recorded a $ 343,633 right-of-use

lease asset and associated lease liability related to the office space component of the lease based on the present value of lease payments

over the expected lease term of 63 months, discounted using our estimated incremental borrowing rate of 4.25 %.

The current monthly base

rent under the office component of the lease is $ 6,121 .

During the three months ended March 31, 2022,

we recorded a $ 400,797 right-of-use lease asset and associated lease liability related to the lab space component of the lease based on

the present value of lease payments over the expected lease term of 63 months, discounted using our estimated incremental borrowing rate

The initial monthly base rent under the lab component of the lease is $ 7,456 .

As of our March 31, 2022 consolidated balance

sheet, we have a right-of-use lease asset of $ 696,698 .

In addition, the new lease agreement of the new

office and lab required us to post a standby letter of credit in favor of the landlord in the amount of $ 46,726 in lieu of a security

We arranged for our bank to issue the standby letter of credit in the fiscal year ended March 31, 2021 and transferred a like

amount to a restricted certificate of deposit which secured the bank’s risk in issuing that letter of credit.

We have classified

that restricted certificate of deposit on our balance sheet as restricted cash.

Manufacturing Space Lease

In October 2021, we entered into another lease

for an initial period of 58 months for (i) approximately 22,260 square feet of space located at 11588 Sorrento Valley Road, San Diego,

California 92121, or the Building, and (ii) 2,655 square feet of space located in the Building and commonly known as Suite 18 to house

our manufacturing operations.

That manufacturing space is located at 11588 Sorrento Valley Road, San Diego, California 92121 and it is

near our new lab and office locations.

We anticipate that the landlord will complete construction on this new space in the third calendar

quarter of 2022 and we will take occupancy at that time.

The initial base rent for the manufacturing space will be $12,080 per month.

Based on the assumptions that we used to calculate

the right-of-use lease asset for the new office and lab spaces, we estimate that we will record a right- of- use lease asset of $614,240

and associated lease liability for the manufacturing space lease when we take possession of that space.

The lease for the manufacturing space also required

us to post a standby letter of credit in favor of the landlord in the amount of $ 40,780 in lieu of a security deposit.

We arranged for

our bank to issue the standby letter of credit in October 2021 and transferred a like amount to a restricted certificate of deposit which

secured the bank’s risk in issuing that letter of credit.

We have classified that restricted certificate of deposit on our balance

sheet as restricted cash.

We took possession of the laboratory

space effective January 1, 2022.

In October 2021, we entered into another lease for approximately 2,655 square feet of space to house

our manufacturing operations located at 11588 Sorrento Valley Road, San Diego, California 92121.

The term is for 55 months and we took

possession of the manufacturing space in August 2022.

The current monthly base rent under the office and laboratory component of the lease

is $ 13,772 .

The current monthly base rent under the manufacturing component of the lease is $ 12,080 .

During the fiscal year ended March 31, 2023, we

recorded a $ 625,471 right-of-use lease asset and associated lease liability related to the manufacturing space component of the lease

based on the present value of lease payments over the expected lease term of 55 months, discounted using our estimated incremental borrowing

rate of 4.25 %.

The office, lab and manufacturing leases are coterminous

with a remaining term of 48 months.

The weighted average discount rate is 4.25 %.

As of our March 31, 2023 balance sheet, we have

a right-of-use lease asset of $ 1,151,909 .

The following table presents a maturity analysis

of expected undiscounted cash flows for operating leases on an annual basis for the next four fiscal years.

All of our leases conterminously

expire during the fiscal year ending March 31, 2027.

Schedule of lease maturities

Fiscal Years Ended March 31,

Total minimum lease payments

Less amount representing imputed interest

Present value of minimum lease payments

Mobile Clean Room

In addition, we rent a mobile clean room on a

short term, month-to-month basis, where we house our manufacturing operations until our permanent manufacturing space is completed.

also rent the land on which the mobile clean room is based on a month-to-month basis.

The mobile clean room is located on leased land

near our office and lab and we pay $ 2,000 per month for the right to locate it there.

We paid approximately $ 189,000 in rent expense to

lease the mobile clean room located on this space during the fiscal year ended March 31, 2022.

Overall, our rent expense, which is included in

general and administrative expenses, approximated $ 401,000 and $ 192,000 for the fiscal years ended March 31, 2022 and 2021, respectively.

In addition, we rented a mobile clean room on

a short term, month-to-month basis, where we housed our manufacturing operations until our permanent manufacturing space was completed.

The mobile clean room was located on leased land near our office and lab and we paid $ 2,000 per month for the right to locate it there.

We paid approximately $ 168,171 in total rent expense to lease the mobile clean room located on this space during the fiscal year ended

March 31, 2023.

The arrangement was terminated in September 2022 and the mobile clean room was returned to the vendor that leased it to

Overall, our rent expense, which is included

in general and administrative expenses, approximated $ 519,000

and $ 401,000 for the fiscal years

ended March 31, 2023 and 2022, respectively.

LEGAL MATTERS

13 unchanged sentences

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 approved, effective

as of April 1, 2022, pursuant to the terms of the Directors 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 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 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 newly appointed director received a contingent RSU grant for 51,370 shares under the 2020 Plan.

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.

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.

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 9A. Controls and Procedures