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Item 7. Management’s Discussion and Analysis

2024-06-27 compared with 2023-06-28 · 333 added, 376 removed, 85 unchanged (89% of the section changed)

1 unchanged sentence

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and

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

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

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.

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 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 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

can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed

with an already approved treatment.

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, 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.

The following discussion and analysis

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

a medical therapeutic company focused on developing the Hemopurifier, a clinical-stage immunotherapeutic device designed to combat cancer

and life-threatening viral infections and for use in organ transplantation.

In human studies, 164 sessions with 38 patients, the Hemopurifier

was safely utilized and demonstrated the potential to remove life-threatening viruses.

In pre-clinical studies, the Hemopurifier has demonstrated

the potential to remove harmful exosomes and exosomal particles from biological fluids, utilizing its proprietary lectin-based technology.

This action has potential applications in cancer, where exosomes and exosomal particles may promote immune suppression and metastasis,

and in life-threatening infectious diseases.

The FDA has designated the Hemopurifier as a “Breakthrough Device” for two independent

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 or

exosomal particles 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 may be a substantial advancement

in the treatment of patients with advanced and metastatic cancer through its design to bind to and remove harmful exosomes and exosomal

particles that promote the growth and spread of tumors.

In October 2022, we formed a wholly-owned subsidiary in Australia to initially

conduct oncology-related clinical research, then seek regulatory approval and commercialize our Hemopurifier in Australia.

We are currently

working with our contract research organization, or CRO, on preparations to conduct a clinical trial in Australia in patients with solid

tumors, including head and neck cancer, and gastrointestinal cancers.

In January 2023, we entered into an agreement with

North American Science Associates, LLC, or NAMSA, a world leading medical technology CRO offering global end-to-end development services,

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

Pursuant to the agreement, NAMSA agreed

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

We recently completed an in vitro binding study of relevant oncology

targets, to provide pre-clinical evidence to support our trial design and translational endpoints.

Our study indicated positive results

from this study, providing evidence that our Hemopurifier removes extracellular vesicles, or EVs, from plasma.

This translational study

provides pre-clinical evidence to support our planned phase 1 safety, feasibility and dose-finding clinical trials of our Hemopurifier

in patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Keytruda® or

In addition to an interested initial trial site in India, we had three interested sites in Australia that were awaiting our

completion of this in vitro binding study.

We added the data from this study to our Clinical Investigator Brochure and submitted

that brochure to the Ethics Committee of Royal Adelaide Hospital in Australia and in June 2024, we received approval for our proposed

phase 1 oncology trial from the Ethics Committee from Royal Adelaide Hospital.

We are currently in the process of applying to the Ethics

Committees of the two additional interested clinical trial sites in Australia and the site in India.

Life-Threatening Viral Infections

We also believe that the Hemopurifier can be part of

the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already

approved treatment.

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.

We believe the Hemopurifier can be part of the treatment

of severe SARS-CoV-2 viremia/COVID-19, or COVID-19, cases.

COVID viremia is detected in approximately 34% of patients and is associated

with severity, requirement for intensive care unit, or ICU, stay, development of multi-organ failure and poor outcomes.

EVs and exosomal

miRNAs may play a role in the spread of infection as well as ongoing inflammation, development of coagulopathy and lung injury.

Our proprietary

Galanthus nivalis agglutinin, or GNA, affinity resin has been shown to bind multiple clinically relevant SARS-CoV-2 variants.

studies have demonstrated in vitro removal of seven SARS-CoV2 variants (104 PFU/mL) in phosphate buffered saline passed over a

column of GNA affinity resin (1g) three times, with capture efficiencies between 53% and 89%.

On June 17, 2020, the FDA approved a supplement to

our open Investigational Device Exemption, or IDE, for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier

in patients with SARS-CoV-2/COVID-19, or COVID-19, in a new feasibility study.

That study was designed to enroll up to 40 subjects

at up to 20 centers in the United States.

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

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

Endpoints for this study, in addition to safety,

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

In January 2021, the Hemopurifier was used to

treat a viremic patient, under our emergency use approval, with a predicted risk of mortality of 80% and the Hemopurifier was able to

reduce the patient’s SARS-CoV-2 plasma viral load by 58.4%.

In June 2022, the first patient in this study was enrolled and

completed the Hemopurifier treatment phase of the protocol.

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

this study in 2022.

However, our IDE for this indication remains open, as we have an active COVID-19 trial in India and wish to preserve

the option of enrolling patients if the situation with COVID-19 changes.

Under Single Patient Emergency Use regulations, Aethlon

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 previously reported a disruption in our Hemopurifier

supply, as our then existing supply of Hemopurifiers expired on September 30, 2022 and, also as previously disclosed, we are dependent

on FDA approval of qualified suppliers to manufacture our Hemopurifier.

We recently completed final testing in order to begin manufacturing

Hemopurifiers at our new manufacturing facility in San Diego, California for use in planned U.S.

clinical trials, using GNA from our current

In April 2024, we received a notice of approval from

the FDA for our IDE supplement to add our San Diego manufacturing facility and we now are able to manufacture Hemopurifiers at this site.

We also have sufficient Hemopurifiers on hand for use in our planned Australia and India oncology trials.

Our intended transition to a

new supplier for GNA, a component of our Hemopurifier, continues to be delayed as we work with the FDA for approval of our supplement

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

We are working with the FDA to qualify this second supplier

We also obtained ethics review board, or ERB, approval

from 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 now have two sites in India for this trial with the Medanta Medicity Hospital and Maulana

Azad Medical College, or MAMC.

One patient has been treated to date;

however, we have been informed by our CRO that a new COVID-19 subvariant

was detected in India recently.

Our COVID-19 trial in India remains open in the event that there are COVID-19 admissions to the ICUs at

our sites in India.

In May 2023, we received ERB approval from the 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,

MAMC is affiliated with the University of Delhi and is operated by the Delhi government.

Organ Transplantation

Additionally, based on preclinical

data with acellular kidney perfusates, we believe that the Hemopurifier has potential applications in organ transplantation.

We are investigating

whether the Hemopurifier, when incorporated into a machine perfusion organ preservation circuit, can remove harmful viruses, exosomes,

RNA molecules, cytokines, chemokines and other inflammatory molecules from recovered organs.

We initially are focused on recovered kidneys

from deceased donors.

We have previously demonstrated the removal of multiple viruses and exosomes and exosomal particles from buffer

solutions, in vitro , utilizing a scaled-down version of our Hemopurifier and believe this process could reduce transplantation

complications by improving graft function, reducing graft rejection, maintaining or improving organ viability prior to transplantation,

and potentially reducing the number of kidneys rejected for transplant.

Successful outcomes of human

2 unchanged sentences

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.

patent applications and/or other patents issued to us more recently will help protect the proprietary nature of our Hemopurifier treatment

to the foregoing, we are monitoring closely the impact of inflation, recent bank failures and the war between Russia and Ukraine and the

military conflicts in Israel and the surrounding areas, as well as related political and economic responses and counter-responses by various

global factors on our business.

Given the level of uncertainty regarding the duration and impact of these events on capital markets and

economy, we are unable to assess the impact on our timelines and future access to capital.

The full extent to which inflation,

recent bank failures and the ongoing military conflicts will impact our business, results of operations, financial condition, clinical

trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets

that are highly uncertain.

Our executive offices are located

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

Our telephone number is (619) 941-0360.

Our website address

is www.aethlonmedical.com.

Our common stock is listed

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

Our website address is

www.aethlonmedical.com.

The information contained on, or that can be accessed through, our website is not part of, and is not incorporated

into, this Annual Report.

Our common stock is listed on

the Nasdaq Capital Market under the symbol “AEMD.”

Fiscal Years Ended March 31, 2024 and 2023

1 unchanged sentence

Government Contract Revenues

We recorded government contract

revenue in the fiscal years ended March 31, 2023 and 2022.

This revenue resulted from work performed under our government contracts with

the NIH and our subaward with the University of Pittsburgh as follows:

Ended 3/31/23

Ended 3/31/22

Phase 2 Melanoma Cancer Contract

Subaward with University of Pittsburgh

Total Government Contract and Grant Revenue

We have recognized revenue under the following

contracts/grants:

For the fiscal year ended March 31, 2024, we did not have any active revenue-generating

government contracts and, consequently, did not record any government contract revenue for that period.

For the fiscal year ended March 31, 2023, we recorded government contract

revenue of $574,245 resulting from work performed under our government contract Phase 2 Melanoma Cancer with NIH.

Phase 2 Melanoma Cancer Contract

On September 12, 2019, the

NCI awarded to us the Award Contract.

On September 12, 2019, the 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 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 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.

We presented the required final

report to the NCI.

As the NCI completed its close out review of the contract, we recognized as revenue $574,245 on our statement of operations

for the fiscal year ended March 31, 2023.

Operating Costs and Expenses

1 unchanged sentence

were $12,636,568 for the fiscal year ended March 31, 2024, compared to $12,472,883 for the fiscal year ended March 31, 2023, an increase

of $1,757,833.

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, 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, 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.

The $163,685 increase in the fiscal year ended March 31, 2024 was due to an increase in payroll and related expenses of $762,899

partially offset by a decrease of $578,112 in general and administrative expenses and a decrease of $21,102 in professional fees.

The $762,899 increase in the fiscal

year ended March 31, 2024 in our payroll and related expenses was primarily due to an increase in separation expenses of $861,994 for

a former executive and an increase of $126,571 associated with an increase in average headcount, partially offset by a decrease in stock-based

compensation of $225,666.

The $578,112 decrease in the

fiscal year ended March 31, 2024 in our general and administrative expenses was primarily driven by the following:

a decrease of $819,327

in clinical trial expenses related to the closed U.S.

COVID-19 clinical trial, a decrease of $279,504 in subcontract expense related to

contracts and grants with the NIH, a $98,755 decrease in rent expense associated with a mobile clean room leased in the prior year, a

decrease of $29,849 in travel related expenses associated with a former remote employee and a decrease of $22,053 expenses related to

various other general office operating expenses.

These decreases were partially offset by an increase of $404,918 in manufacturing and

research and development supplies related to the manufacturing of our Hemopurifier device and various research and development activities.

Other increases included $118,165 in depreciation expense and amortization expense related to leasehold improvements to our manufacturing

space, $69,894 increase in insurance expenses to include medical, D&O and liability, an increase of $82,421 primarily related to our

manufacturing facility, encompassing equipment maintenance, utilities, and outside services.

The decrease in professional

fees of $21,102 in the fiscal year ended March 31, 2024 was primarily due to a decrease in outside scientific, product research and regulatory

services of $302,390, a decrease of $60,229 in recruiting fees and a $32,631 decrease in legal fees.

These decreases were partially offset

by increases in investor relations of $151,475, accounting fees of $137,026, board of director fees of $33,750 and outside operational

and administration expenses of $53,964.

As a result of the above factors,

our net loss before noncontrolling interests increased to $12,029,786 for the fiscal year ended March 31, 2023, from $10,420,885 for the

fiscal year ended March 31, 2022.

our net loss increased to $12,208,174 for the fiscal year ended March 31, 2024, from $12,029,786 for the fiscal year ended March 31, 2023.

Liquidity and Capital Resources

3 unchanged sentences

$13,585,478 at March 31, 2023.

We expect our existing cash as of March 31, 2023 to be sufficient to fund the Company’s operations

for at least twelve months from the issuance date of this Annual Report.

The primary sources of our

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

On May 17, 2024, we closed a public

offering pursuant to which we sold an aggregate of:

(i) 2,450,000 shares of our common stock and accompanying Class A warrants to purchase

up to 2,450,000 shares of common stock and Class B warrants to purchase up to 2,450,000 shares of common stock, at a combined public offering

price of $0.58 per share and accompanying warrants;

and (ii) in lieu of common stock, pre-funded warrants to purchase 5,650,000 shares

of common stock and accompanying Class A warrants to purchase up to 5,650,000 shares of common stock and Class B warrants to purchase

up to 5,650,000 shares of common stock, at a combined public offering price of $0.579 per pre-funded warrant and accompanying warrants,

which is equal to the public offering price per share of common stock, and accompanying warrants less the $0.001 per share exercise price

of each such pre-funded warrant.

The gross proceeds from the offering, before deducting the placement agent’s fees and other offering

expenses, were approximately $4.7 million.

In June 2024, holders of Class A and Class B warrants exercised 295,000

shares and 2,875,000 shares, respectively, for total proceeds of $1,838,600.

While we currently have over

$9.1 million in cash and cash equivalents and have been carrying out certain expense reductions since November 2023, our planned expense

reductions may not materialize and/or our patient recruitment may occur more rapidly than expected along with the concomitant increases

in expenses, there is substantial doubt that our cash on hand will carry the company for 12 months beyond the filing date of the financial

statements included in this Annual Report.

During the fiscal years ended

March 31, 2024 and 2023, we raised capital only through our At The Market Offering Agreement, or the 2022 ATM Agreement, with H.C.

& Co., LLC, or Wainwright.

2022 At The Market Offering Agreement with H.C.

Wainwright & Co., LLC

2 unchanged sentences

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.

The offering was registered under

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, or the 2022 ATM Shares, having an aggregate offering price of up to $15,000,000, which was

subsequently and most recently updated pursuant to our prospectus supplement, dated September 29, 2022, filed with the SEC that provides

for the sale of 2022 ATM Shares having an aggregate offering price of up to $6,625,000.

As of March 31, 2024, $5,302,617 of 2022 ATM Shares

remained available for sale under the 2022 ATM Agreement.

Under the 2022 ATM Agreement,

6 unchanged sentences

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.

We are not obligated to make any

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

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

4 unchanged sentences

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 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, dated March 22, 2021, with the SEC 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 may 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.

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.

31, 2024, we raised aggregate net proceeds of $1,322,383, net of $34,118 in commissions to Wainwright and $8,202 in other offering expense,

through the sale of 296,056 shares of our common stock at an average price of $4.47 per share under the 2022 ATM Agreement.

Financings During the Fiscal Year Ended March

the fiscal year ended March 31, 2023, we raised aggregate 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 748,084 shares of our common stock at an average price of $11.93 per share under

the 2022 ATM Agreement.

Material Cash Requirements

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

will depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical

programs, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary

rights, the time and costs involved in obtaining regulatory approvals, competing technological and market developments, as well as our

ability to establish collaborative arrangements, effective commercialization, marketing activities and other arrangements.

continue to incur increasing negative cash flows and net losses for the foreseeable future.

We will continue to need to raise additional

capital either through equity and/or debt financing for the foreseeable future.

As a result of the COVID-19

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.

We expect our clinical trial expenses

for the planned oncology trials in Australia and India to increase for the foreseeable future.

Those increases in clinical trial expenses

include the cost of manufacturing additional Hemopurifiers.

In addition, we have entered into

leases for our headquarters, laboratory and manufacturing facilities.

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

Future capital requirements will

depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical programs,

the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, the

time and costs involved in obtaining regulatory approvals, competing technological and market developments, as well as our ability to

establish collaborative arrangements, effective commercialization, marketing activities and other arrangements.

We expect to continue

to incur increasing negative cash flows and net losses for the foreseeable future.

We will continue to need to raise additional capital

either through equity and/or debt financing for the foreseeable future.

As a result of 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 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.

While we currently have over $9.1

million in cash and cash equivalents and have been carrying out certain expense reductions since November 2023, our planned additional

expense reductions may not materialize and/or our patient recruitment may occur more rapidly than expected along with the concomitant

increases in expenses;

therefore there is substantial doubt that our cash on hand will carry the company for 12 months beyond the filing

date of the financial statements included in this Annual Report.

We do plan to access the equity

markets for additional capital, however, there can be no assurance that we will be able to access such additional capital.

Our ability to raise additional

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or generate positive cash flow from operating activities.

Cash flows from operating,

investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized as follows

(in thousands):

Cash flows from operating, investing

and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized as follows (in thousands):

For the year ended

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Financing activities

Net (decrease) increase in cash

Effect of exchange rate on cash

Net decrease in cash

Net Cash Used in Operating Activities

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Net cash used in operating activities was approximately $10,130,000 in fiscal 2024, compared

to net cash used in operating activities of approximately $9,767,000 in fiscal 2022, an increase of approximately $738,000.

factors in this $738,000 increase in cash used in operations in fiscal 2023 was a $1,613,695 increase in our net loss.

to net cash used in operating activities of approximately $10,505,000 in fiscal 2023, a decrease of approximately $375,000.

in cash flows was primarily driven by a positive change in our working capital items of $413,000 mainly from the increase in accounts

payable and accrued expenses offset by an increase in net loss of approximately $38,000 before non-cash items.

Net Cash Used in Investing Activities

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Net cash generated from financing

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.

activities decreased from approximately $8,915,000 in the fiscal year ended March 31, 2023 to approximately $1,288,000 in the fiscal year

ended March 31, 2024.

In the fiscal year ended March

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$35,000 to pay for the tax withholding on the issuance of restricted stock units, or RSUs.

In the fiscal year ended March 31, 2022, we

raised approximately $17,456,000 from the issuance of common stock, which was partially offset by the use of approximately $88,000 to

pay for the tax withholding on the issuance of RSUs.

During the fiscal year ended March 31, 2023,

we raised $8,927,211 from the issuance of common stock, which was partially offset by the use of approximately $12,000 to pay for the

tax withholding on the issuance of RSUs.

Critical Accounting Policies and Significant Judgments and Estimates

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assets and liabilities at the date of the financial statements.

Such estimates and assumptions affect the reported amounts of expenses

These estimates and assumptions affect the reported amounts of expenses

during the reporting period.

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from these estimates under different future conditions.

We believe that the estimates and assumptions that are most important to the portrayal

of our financial condition and results of operations, in that they require the most difficult, subjective or complex judgments, form the

basis for the accounting policies deemed to be most critical to us.

These critical accounting estimates relate to revenue recognition,

stock purchase warrants issued with notes payable, beneficial conversion feature of convertible notes payable, impairment of intangible

assets and long lived assets, stock compensation, deferred tax asset valuation allowance, and contingencies.

Revenue Recognition

Our revenues consist entirely

of amounts earned under contracts and grants with the NIH.

During the fiscal years ended March 31, 2023 and 2022, we recognized revenues

totaling $574,245 and $294,165, respectively, under such contracts.

We have concluded that these agreements are not within the scope of

ASC Topic, 606, Revenue from Contracts with Customers, or Topic 606, as the NIH grants and contracts do not meet the definition of a “customer”

as defined by Topic 606.

Prior to the effective date of ASC Topic 606, which for the Company was April 1, 2018, we accounted for our grant/contract

revenues under the Milestone Method as prescribed by the legacy guidance of ASC 605-28, Revenue Recognition – Milestone Method,

or the Milestone Method.

In the absence of other applicable guidance under US GAAP, effective April 1, 2018, we elected to continue to

use the Milestone Method by analogy to recognize revenue under these grants/contracts.

Common Stock Warrants

In the past, we have granted

warrants to purchase our common stock in connection with financing transactions.

When such warrants are classified as equity, we measure

the relative estimated fair value of such warrants which represents a discount from the face amount of the notes payable.

Such discounts

are amortized to interest expense over the term of the notes.

We analyze such warrants for classification as either equity or derivative

liabilities and value them based on binomial lattice models.

We believe that the estimates

and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require the

most difficult, subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us.

There were no accounting estimates

in the year ended March 31, 2024 with a high degree of uncertainty or amounts that are with a high likelihood to change from period to

period that would materially impact the presentation of our financial statements for the year ended March 31, 2024.

Share-based Compensation

We account for share-based

compensation awards using the fair-value method and record such expense based on the grant date fair value in the consolidated financial

statements over the requisite service period.

Derivative Instruments

We evaluate free-standing

derivative instruments (or embedded derivatives) to properly classify such instruments within equity or as liabilities in our financial

Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis.

The classification of a derivative

instrument is reassessed at each reporting date.

If the classification changes as a result of events during a reporting period, the instrument

is reclassified as of the date of the event that caused the reclassification.

There is no limit on the number of times a contract may

be reclassified.

Instruments classified as

derivative liabilities are remeasured each reporting period (or upon reclassification) and the change in fair value is recorded on our

consolidated statement of operations in other expense (income).

We had no derivative instruments at March 31, 2023 or March 31, 2022.

Deferred tax assets are recognized

for the future tax consequences attributable to the difference between the consolidated financial statements and their respective tax

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities

for financial reporting purposes and the amounts reported for income tax purposes, and (b) tax credit carryforwards.

We record a valuation

allowance for deferred tax assets when, based on our best estimate of taxable income (if any) in the foreseeable future, it is more likely

than not that some portion of the deferred tax assets may not be realized.

Convertible Notes Payable

There were no convertible

notes outstanding as of March 31, 2023 or 2022.

We account for share-based compensation

awards using the fair-value method and record such expense based on the grant date fair value in the consolidated financial statements

over the requisite service period.

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.

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.

The Company maintains the Amended

and Restated Non-Employee Director Compensation Policy, or 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

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.

April 16, 2024, our Board of Directors 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 four non-employee directors of the Company then serving on the Board of Directors.

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 of Directors, and for a grant of stock options or $75,000 worth of RSUs for a

newly elected non-employee director, with each RSU priced at the average for the closing prices for the five days preceding and including

the date of grant, or $1.52 per share for the RSUs granted in April 2024.

As a result, in April 2024 the four eligible directors were

each granted an RSU in the amount of 32,894 shares under the Company’s 2020 Equity Incentive Plan, or the 2020 Plan.

RSUs are subject to vesting in four equal installments, with 25% of the restricted stock units vesting on each of June 30, 2024, September

30, 2024, December 31, 2024, and March 31, 2025, subject in each case to the director’s Continuous Service (as defined in the 2020

Plan), through such dates.

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

There were no vested RSUs outstanding

as of March 31, 2024.

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.

On May 17, 2024, we closed a public

offering pursuant to which we sold an aggregate of:

(i) 2,450,000 shares of our common stock and accompanying Class A warrants to purchase

up to 2,450,000 shares of common stock and Class B warrants to purchase up to 2,450,000 shares of common stock, at a combined public offering

price of $0.58 per share and accompanying warrants;

and (ii) in lieu of common stock, pre-funded warrants to purchase 5,650,000 shares

of common stock and accompanying Class A warrants to purchase up to 5,650,000 shares of common stock and Class B warrants to purchase

up to 5,650,000 shares of common stock, at a combined public offering price of $0.579 per pre-funded warrant and accompanying warrants,

which is equal to the public offering price per share of common stock, and accompanying warrants less the $0.001 per share exercise price

of each such pre-funded warrant.

The Class A and Class B warrants

each have an exercise price of $0.58 per share, are immediately exercisable, and, in the case of Class A warrants, will expire on May

17, 2029, and in the case of Class B warrants, will expire on May 19, 2025.

The exercise price of the Class A and Class B warrants is

also subject to adjustment for stock splits, reverse splits, and similar capital transactions as described in such warrants.

LLC acted as the exclusive placement agent for the offering.

The gross proceeds from the offering,

before deducting the placement agent’s fees and other offering expenses, were approximately $4.7 million.

The Company intends to

use the net proceeds from this offering for general corporate purposes, which may include clinical trial expenses, research and development

expenses, capital expenditures and working capital.

In June 2024, holders of Class

A and Class B warrants exercised 295,000 shares and 2,875,000 shares, respectively, for total proceeds of $1,838,600.

In April 2024, our Board of Directors

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 four non-employee directors of the Company then serving on the Board of Directors.

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.

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 of Directors, and for a grant of stock options or $75,000 worth of RSUs for a newly elected non-employee director, with each

RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $1.52 per share for the

April 2024 RSU grants.

As a result, in April 2024 the four eligible directors were each granted an RSU in the amount of 32,894 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, 2024, September 30, 2024, December 31, 2024, and March 31, 2025, subject in each case to the director’s Continuous Service

(as defined in the 2020 Plan), through such dates.

Vesting will terminate upon the director’s termination of Continuous Service

prior to any vesting date.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-K

Item 7. Management’s Discussion and Analysis