What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-06-27 compared with 2023-06-28 · 814 added, 672 removed, 592 unchanged (72% of the section changed)

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

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

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

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

Chief Executive Officer and Chief Financial Officer (who is our principal executive officer and principal financial officer), to allow

timely decisions regarding required disclosures.

In designing and evaluating

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

In designing and evaluating the

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

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

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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,

our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Annual Report,

our disclosure controls and procedures were effective.

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

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

Internal Control over Financial Reporting

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of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

Under the supervision and

with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation

of the effectiveness of our internal control over financial reporting as of March 31, 2023.

According to the guidelines established by

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, one or more

material weaknesses renders a company’s internal control over financial reporting ineffective.

Based on this evaluation, we have

concluded that our internal control over financial reporting was effective as of March 31, 2023.

Under the supervision and with the participation of

our management, including our Interim Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness

of our internal control over financial reporting as of March 31, 2024.

According to the guidelines established by Internal Control—Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, one or more material weaknesses renders a company’s

internal control over financial reporting ineffective.

Based on this evaluation, we have concluded that our internal control over financial

reporting was not effective as of March 31, 2024 due to the material weaknesses described below.

Description of Material Weaknesses

Based on such evaluation,

management identified a material weakness in the segregation of duties within our financial systems.

Specifically, user access controls

were not sufficiently maintained to properly restrict both user and privileged access to financial applications within our accounting

software system to initiate, record and approve entries.

Also noted that check stock was secured in an authorized signatory’s office.

It is difficult to design

and maintain appropriate segregation of duties in the initiation, recording, and approval of transactions within financial systems with

a limited number of personnel.

This, coupled with management having not designed and maintained user access controls that adequately

restrict user and privileged access to financial applications, and the absence of sufficient other mitigating controls, created a segregation

of duties weakness which could potentially have resulted in a material misstatement.

Management has identified remediation actions that

may require the addition of personnel to the finance and accounting function or a change in accounting software, which will allow the

Company to design the control environment in a manner that provides effective segregation of duties.

Management has identified certain

actions beyond staff changes or accounting software changes.

As of May 2024, the accounting software was updated, and distinct user roles

were created.

Transactions are recorded by personnel who are independent of those who initiate them and are approved by separate personnel

who are independent of those who record them.

Additionally, check stock was relocated in November 2023.

During 2017 through 2020,

the Company incorrectly recorded accrued commission liability of approximately $404,000.

The Company reversed accrued commission liability

of approximately $404,000 during the year ended March 31, 2024 related to this error in accounting under U.S.

The Company originally

failed to correctly apply appropriate accounting principles in recording the transaction, and the error was not detected and corrected

in a timely manner, resulting in an adjustment to the financial statements.

Management has discussed with counsel appropriate

measures to record such potential commission liabilities in the future and will implement a quarterly review of all accruals.

of the accrued commission liability into equity as of March 31, 2024 corrected the impact of the error.

The Company is in the process

of implementing quarterly review controls over review and assessment of accruals.

This plan, with oversight from our Audit Committee,

is in the process of implementation in response to the identified material weakness.

Limitation on Effectiveness of Controls

In designing and evaluating our

disclosure controls and procedures, management recognized that any disclosure controls and procedures, no matter how well designed and

operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives.

No evaluation of internal

control can provide absolute assurance that all internal control issues and instances of fraud, if any, within a company are detected.

In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit

relationship of possible controls and procedures.

There are inherent limitations to the effectiveness of any system of disclosure controls

and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.

the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be

no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may

become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.

the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control Over Financial Reporting

There was no change in our

internal control over financial reporting during the last fiscal quarter ended March 31, 2023 that has materially affected, or is reasonably

likely to materially affect, our internal control over financial reporting.

There was no change in our internal

control over financial reporting during the last fiscal quarter ended March 31, 2024 that has materially affected, or is reasonably likely

to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

On June 27, 2024, we received

a letter, or Notice, from The Nasdaq Stock Market, or Nasdaq, advising us that for 31 consecutive trading days preceding the date of the

Notice, the bid price of our common stock had closed below the $1.00 per share minimum required for continued listing on The Nasdaq Capital

Market pursuant to Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement.

The Notice has no effect on the listing of our

common stock at this time, and our common stock continues to trade on The Nasdaq Capital Market under the symbol “AEMD.”

In accordance with Nasdaq

Listing Rule 5810(c)(3)(A), we have 180 calendar days to regain compliance with the Minimum Bid Requirement, or the Grace Period, subject

to a potential 180 calendar day extension, as described below.

To regain compliance, the closing bid price of our common stock must be

at least $1.00 per share for a minimum of ten consecutive business days within the Grace Period.

If we do not achieve compliance

with the Minimum Bid Requirement by December 24, 2024, the end of the Grace Period, we may be eligible for an additional 180 calendar

day period to regain compliance.

To qualify, we would be required to meet the continued listing requirement for the market value of our

publicly held shares and all other Nasdaq initial listing standards, with the exception of the bid price requirement, and would need to

provide written notice of our intention to cure the deficiency during the second compliance period.

However, if it appears to Nasdaq staff

that we will not be able to cure the deficiency, or if we do not meet the other listing standards, Nasdaq could provide notice that our

common stock will be subject to delisting.

In the event we receive notice that our common stock is being delisted, we would be entitled

to appeal the determination to a Nasdaq Listing Qualifications Panel and request a hearing.

We intend to monitor the closing

bid price of our common stock and may, if appropriate, consider implementing available options to regain compliance with the Minimum Bid

Price Requirement.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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

Certain information required by

Part III is omitted from this Annual Report and incorporated by reference to our definitive proxy statement for our 2024 Annual Meeting

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

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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

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

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

We maintain a Code of Business

Conduct and Ethics that applies to all our employees, officers and directors.

This includes our principal executive officer, principal

financial officer and principal accounting officer or controller, or persons performing similar functions.

The full text of our Code of

Business Conduct and Ethics is posted on our website at www.aethlonmedical.com on the “Governance” page of the section titled

“Investors.” If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision

of the Code of Business Conduct and Ethics to any executive officer or director that are required to be disclosed pursuant to SEC rules,

we will promptly disclose the nature of the amendment or waiver on our website or in a current report on Form 8-K.

Information contained

in, or that can be accessed through, our website is not incorporated by reference herein, and you should not consider information on our

website to be part of this Annual Report.

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”

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.

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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

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

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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

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”

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.

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(a)(1) Financial Statements.

The response to this portion of Item 15 is set

forth under Part II, Item 8 above.

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.

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

Filed Herewith

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January 17, 2020

Form of Class A Warrant to Purchase Common Stock, issued on May 17, 2024.

Form of Class B Warrant to Purchase Common Stock, issued on May 17, 2024.

Form of Pre-Funded Warrant to Purchase Common Stock, issued on May 17, 2024.

Form of Placement Agent Warrant to Purchase Common Stock, issued on May 17, 2024.

Description of Aethlon Medical, Inc.’s Securities.

June 25, 2020

Incorporated by Reference

Filed Herewith

Aethlon Medical, Inc.

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February 11, 2019

Amendment No.

1 to Executive Employment Agreement, effective as of November 7, 2023, by and between the Company and James B.

December 22, 2023

Form of Indemnification Agreement for Officers and Directors.

February 11, 2019

Incorporated by Reference

Exhibit Description

Filed Herewith

Form of Option Grant Agreement for Officers and Directors.

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February 11, 2019

SBIR Phase II Award Contract, by and among Aethlon Medical, Inc., the National Institutes of Health and the National Cancer Institute, dated September 12, 2019.

November 1, 2019

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.

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November 3, 2020

Separation Agreement between the Company and Dr.

Fisher, effective as of November 27, 2023.

November 27, 2023

Lease, by and between the Company and San Diego Inspire 1, LLC.

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February 10, 2021

Incorporated by Reference

Filed Herewith

Executive Employment Agreement between the Company and Guy Cipriani, dated January 1, 2021.

February 10, 2021

Amendment No.

1 to Executive Employment Agreement, effective as of November 7, 2023, by and between the Company and Guy F.

December 22, 2023

Executive Employment Agreement between the Company and Steven P.

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March 24, 2022

Incorporated by Reference

Exhibit Description

Filed Herewith

Amendment No.

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

June 28, 2023

List of Subsidiaries.

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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.

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.

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

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

Section 1350.

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)

Incorporated by Reference

Filed Herewith

Incentive Compensation Recoupment Policy.

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

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Indicates management contract or compensatory plan.

The information in Exhibit 32.1 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Annual Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.

FORM 10-K SUMMARY

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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 June, 2023.

/s/ CHARLES J.

Fisher, Jr., M.D.

Chief Executive Officer

its behalf by the undersigned, thereunto duly authorized, o n the 27 th d ay of

INTERIM CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER.

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each

person whose signature appears below constitutes and appoints James B.

Frakes and Charles J.

Fisher, Jr., M.D., his or her true and lawful

attorney-in-fact and agent, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities,

to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents

in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them,

full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as

fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact

and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements

of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant

KNOW ALL PERSONS BY THESE PRESENTS, that each person

whose signature appears below constitutes and appoints James B.

Frakes his or her true and lawful attorney-in-fact and agent, with full

power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments

to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with

the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each

and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she

might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitutes or substitute,

may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of

the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

/s/ CHARLES J.

Chief Executive Officer, Principal Executive Officer and Director

June 28, 2023

Fisher, Jr., M.D.

Chief Financial Officer and Principal Financial and Accounting Officer

Interim Chief Executive Officer and Chief Financial Officer, Principal Executive Officer, Principal Financial and Accounting Officer and Director

June 27, 2024

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Angela Rossetti

/s/ GUY CIPRIANI

Senior Vice President, Chief Business Officer and Director

/s/ NICOLAS GIKAKIS

June 27, 2024

Nicolas Gikakis

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 23 )

Report of Independent Registered Public Accounting Firm (Baker Tilly US, LLP, San Diego, CA PCAOB ID No.

Consolidated Balance Sheets as of March 31, 2024 and 2023

Consolidated Statements of Operations for the Years Ended March 31, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended March 31, 2024 and 2023

Consolidated Statements of Equity for the Years Ended March 31, 2024 and 2023

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Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and the Board of Directors

of Aethlon Medical, Inc.

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Aethlon Medical, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Aethlon Medical, Inc.

and its subsidiary (the Company) as of March 31, 2023 and 2022, the related consolidated statements

of operations, equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively,

the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of

the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity

with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance

sheets of Aethlon Medical, Inc.

and its subsidiary (the Company) as of March 31, 2024 and 2023, the related consolidated statements of

operations and comprehensive loss, equity and cash flows for the years then ended, and the related notes to the consolidated financial

statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for the years

then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements

have been prepared assuming the Company will continue as a going concern.

As discussed in Note 1 of the consolidated financial statements,

the Company has recurring losses from operations, an accumulated deficit, expects to incur losses for the foreseeable future and requires

additional working capital.

These are the reasons that raise substantial doubt about the Company’s ability to continue as a going

Management’s plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not

contain any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control

over financial reporting.

Accordingly, we express no such opinion.

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Critical Audit Matters

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

Critical audit matters are matters arising from the

current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

We determined that there are no critical audit matters.

Baker Tilly US, LLP

/s/ Baker Tilly US, LLP

We have served as the Company's auditor since 2001.

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Cash and cash equivalents

Accounts receivable

Deferred offering costs

Prepaid expenses and other current assets

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Property and equipment, net

Right-of-use lease asset

Right-of-use lease asset, net

Restricted cash

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Due to related parties

Deferred revenue

Lease liability, current portion

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STOCKHOLDERS’ EQUITY

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

Common stock, $ 0.001 par value, 60,000,000 shares authorized at March 31, 2024 and 2023;

2,629,725 and 2,299,259 shares issued and outstanding at March 31, 2024 and 2023, respectively

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STOCKHOLDERS’ EQUITY BEFORE NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS

TOTAL STOCKHOLDERS’ EQUITY

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Loss on dissolution of subsidiary

Interest income

Interest income and other

Other expense (income)

NET LOSS BEFORE NONCONTROLLING INTERESTS

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

( 12,208,174 )

( 12,029,786 )

LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

Basic and diluted net loss per share attributable to common stockholders

Weighted average number of common shares outstanding - basic and diluted

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

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$ ( 12,035,927 )

Basic and diluted net loss per share attributable to common stockholders

Weighted average number of common shares outstanding - basic and diluted

See accompanying notes to the consolidated financial

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$ ( 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

Issuances of common stock for cash

under at the market program

Issuance of common shares upon vesting

of restricted stock units and net stock option exercise

Loss on dissolution of subsidiary

Stock-based compensation expense

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( 12,029,786 )

Other comprehensive loss

BALANCE - MARCH 31, 2023

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$ ( 142,358,554 )

$ ( 141,708 )

Issuances of common stock for cash under at the market program

Issuance of common shares upon vesting of restricted stock units

Loss on dissolution of subsidiary

Issuances of common stock for cash

under at the market program

Rounding for reverse split

Issuance of common shares upon vesting

of restricted stock units

Reversal of accrued commission liability

Stock-based compensation expense

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Stock-based compensation

Loss of dissolution of subsidiary

Accretion of right-of-use lease asset

Loss on disposal of property, plant and equipment

Loss on dissolution of Subsidiary

Non-cash lease expense

Changes in operating assets and liabilities:

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Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units

Net proceeds from the issuance of common stock and exercise of warrants

Net proceeds from the issuance of common stock

Net cash provided by financing activities

Effect of Exchange Rate on Changes on Cash

Net (decrease) increase in cash and restricted cash

Net decrease in cash and restricted cash

( 9,090,965 )

( 2,539,476 )

Cash and restricted cash at beginning of year

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Supplemental information of non-cash investing and financing activities:

Issuances of common stock under cashless warrant exercises

Initial recognition of right-of-use lease asset and lease liability

Issuance of shares under vested restricted stock units, net stock option exercises and unvested share issuance for services

Reversal of accrued commission liability (see Note

Deferred offering costs not yet paid

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:

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Cash and restricted cash

See accompanying notes to the

consolidated financial statements.

See accompanying notes to the consolidated financial

Aethlon Medical, Inc.

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ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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,

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

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

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

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

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

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

approved treatment.

Aethlon Medical, Inc., or Aethlon, the Company, we

or us, is 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

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

metastasis, and in life-threatening infectious diseases.

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

as a “Breakthrough Device” for two independent indications:

· the treatment of individuals with advanced or metastatic cancer

who are either unresponsive to or intolerant of standard of care therapy, and with cancer types in which exosomes have been shown to

participate in the development or severity of the disease;

· the treatment of life-threatening viruses that are not addressed

with approved therapies.

We believe the Hemopurifier 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

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In several cases, these studies were conducted in collaboration with leading government or non-government research

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.

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.

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.

Furthermore, 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 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 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 supplier.

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.

working with the FDA to qualify this second supplier of our GNA.

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.

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, India.

MAMC is affiliated

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

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.

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

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 trials will also

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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.

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

In addition to the foregoing, we are monitoring closely

the impact of inflation, recent bank failures and the war between Russia and Ukraine and the military conflicts in Israel and the surrounding

areas, as well as related political and economic responses and counter-responses by various global factors on our business.

level of uncertainty regarding the duration and impact of these events on capital markets and the U.S.

economy, we are unable to assess

the impact on our timelines and future access to capital.

The full extent to which inflation, recent bank failures and the ongoing military

conflicts will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on

future developments, as well as the economic impact on national and international markets that are highly uncertain.

Our executive offices are located at 11555 Sorrento

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Our website address is www.aethlonmedical.com.

Our common stock is listed on the Nasdaq Capital

Market under the symbol “AEMD.”

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

on Form 10-K.

Our common stock is listed on the Nasdaq Capital Market

under the symbol “AEMD.”

LIQUIDITY AND GOING CONCERN

Management expects existing cash as of March 31,

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.

The Company has incurred losses since inception in devoting substantially

all of its efforts toward research and development and has an accumulated deficit of $ 154,566,728 as of March 31, 2024.

During the year

ended March 31, 2024, the Company generated a net loss of approximately $ 12,208,000 and the Company expects that it will continue to generate

operating losses for the foreseeable future.

While the Company currently has 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

The Company’s ability to execute its current operating plan depends

on its ability to reduce expenses and obtain additional funding via the sale of equity, or other sources of capital.

The Company plans

to continue actively pursuing financing alternatives, however, there can be no assurance that it will obtain the necessary funding, raising

substantial doubt about the Company’s ability to continue as a going concern within one year of the date these financial statements

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

PRINCIPLES OF CONSOLIDATION

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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.

Operations in our Australian subsidiary is recorded in their functional

The results of operations for our Australian subsidiary are translated from functional currency into U.S.

dollars using the

current exchange rate on the date the expense was recognized.

Assets and liabilities are translated using the period end exchange rates.

The U.S dollar effects that arise from translating the net assets of are recorded in other comprehensive income (loss).

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, 2024 and 2023, and the consolidated statement of cash flows for the fiscal years ended

March 31, 2024 and 2023.

RISKS AND UNCERTAINTIES

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USE OF ESTIMATES

We prepare our consolidated financial statements

in conformity with accounting principles generally accepted in the United States of America, or GAAP, which requires us to make a number

We prepare our consolidated financial statements in

conformity with accounting principles generally accepted in the United States of America, or GAAP, which requires us to make a number

of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

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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.

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.

CASH AND CASH EQUIVALENTS

Accounting standards define “cash and cash

equivalents” as any short-term, highly liquid investment that is both readily convertible to known amounts of cash and so near their

maturity that they present insignificant risk of changes in value because of changes in interest rates.

For the purpose of financial statement

presentation, we consider all highly liquid investment instruments with original maturities of three months or less when purchased, or

any investment redeemable without penalty or loss of interest to be 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:

Accounting standards define “cash and cash equivalents”

as any short-term, highly liquid investment that is both readily convertible to known amounts of cash and so near their maturity that

they present insignificant risk of changes in value because of changes in interest rates.

For the purpose of financial statement presentation,

we consider all highly liquid investment instruments with original maturities of three months or less when purchased, or any investment

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

Cash is carried at cost, which approximates fair value, and cash

equivalents are carried at fair value.

For the fiscal years ended March 31, 2024 and March

31, 2023 our cash and cash equivalents were comprised of the following instruments:

Schedule of cash and cash equivalents

For the year ended

Cash in US bank checking account

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Total cash and cash equivalents

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

classified as cash equivalents.

CONCENTRATIONS OF CREDIT RISKS

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2024, we maintained cash equivalents of approximately $ 4.7 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.

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.

31, 2024 Australian cash balance was below that threshold.

We did not have any revenue in fiscal year ended March

All of our revenue in the fiscal year ended March 31, 2023 related to our government contracts.

We did not have any accounts

receivable at March 31, 2024.

RESTRICTED CASH

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statements of operations.

Deferred tax assets and liabilities 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.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to the difference between the consolidated financial statements and their respective tax basis.

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.

Management has provided a full valuation allowance against the Company’s net deferred

Tax positions taken or expected to be taken in the course of preparing tax returns are required to be evaluated to determine

whether the tax positions are more-likely-than-not to be sustained by the applicable tax authority.

Tax positions deemed to not meet a

more-likely-than-not threshold would be recorded as tax expense in the current year.

There were no uncertain tax positions that require

accrual to or disclosure in the consolidated financial statements as of March 31, 2024 and 2023.

LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment

whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

If the cost basis of a long-lived

asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized.

We believe no

impairment charges were necessary during the fiscal years ended March 31, 2023 and 2022.

Long-lived assets are reviewed for impairment whenever

events or changes in circumstances indicate that their carrying amounts may not be recoverable.

If the cost basis of a long-lived asset

is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized.

We believe no impairment

charges were necessary during the fiscal years ended March 31, 2024 and 2023.

LOSS PER SHARE

Basic loss per share is computed by dividing net

income available to common stockholders by the weighted average number of common shares outstanding during the period of computation.

Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional

Basic loss per share is computed by dividing net loss

available to common stockholders by the weighted average number of common shares outstanding during the period of computation.

loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional

common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive.

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As of March 31, 2024 and 2023, a total of 124,028

and 2,243,838 potential common shares, consisting of shares underlying outstanding stock options, restricted stock units, or RSUs, and

warrants were excluded as their inclusion would be antidilutive.

DEFERRED FINANCING COSTS

Costs related to the issuance of debt are capitalized

as a deduction to our convertible notes based on the accounting standard on imputation of interest, and amortized to interest expense

over the life of the related debt using the effective interest method.

There was no amortization related to our deferred financing costs

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

and 204,501 potential common shares, consisting of shares underlying outstanding stock options, restricted stock units, or RSUs, and warrants

were excluded as their inclusion would be antidilutive.

DEFERRED OFFERING COSTS

Specific incremental costs directly attributable to

an actual offering of securities may be deferred and charged against the gross proceeds of the offering.

As of March 31, 2024, approximately

$ 278,000 of costs have been deferred.

REVENUE RECOGNITION

Our revenues consist entirely of amounts earned

under contracts and grants with the National Institutes of Health, or 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 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.

We did not recognize revenue in fiscal year ended

March 31, 2024.

Our revenues in the fiscal year ended March 31, 2023 consisted entirely of amounts earned under contracts and grants with

the National Institutes of Health, or NIH.

During the fiscal year ended March 31, 2023, we recognized revenues totaling $ 574,245 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.

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 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.

We identify the deliverables included within these

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characteristics:

(1) There is substantive uncertainty at the date

the arrangement is entered into that the event will be achieved.

A vendor’s assessment that it expects to achieve a milestone does

not necessarily mean that there is not substantive uncertainty associated with achieving the milestone.

(1) There is substantive uncertainty at the date the

arrangement is entered into that the event will be achieved.

A vendor’s assessment that it expects to achieve a milestone does not

necessarily mean that there is not substantive uncertainty associated with achieving the milestone.

(2) The event can only be achieved based in whole

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payments being due to the vendor.

A milestone does not include events for which

the occurrence is either:

A milestone does not include events for which the

occurrence is either:

(a) contingent solely upon the passage of time;

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(2) The consideration relates solely to past performance;

(3) The consideration is reasonable relative to

all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.

A milestone is not considered substantive if any

portion of the associated milestone consideration relates to the remaining deliverables in the unit of accounting (i.e., it does not relate

solely to past performance).

To recognize the milestone consideration in its entirety as revenue in the period in which the milestone

is achieved, the milestone must be substantive in its entirety.

Milestone consideration cannot be bifurcated into substantive and nonsubstantive

In addition, if a portion of the consideration earned from achieving a milestone may be refunded or adjusted based on future

performance, the related milestone is not considered substantive.

We have recognized revenue under the following

contracts/grants:

(3) The consideration is reasonable relative to all

of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.

A milestone is not considered substantive if any portion

of the associated milestone consideration relates to the remaining deliverables in the unit of accounting (i.e., it does not relate solely

to past performance).

To recognize the milestone consideration in its entirety as revenue in the period in which the milestone is achieved,

the milestone must be substantive in its entirety.

Milestone consideration cannot be bifurcated into substantive and nonsubstantive components.

In addition, if a portion of the consideration earned from achieving a milestone may be refunded or adjusted based on future performance,

the related milestone is not considered substantive.

We have recognized revenue under the following contract/grant:

Phase 2 Melanoma Cancer Contract

On September 12, 2019, the National Cancer Institute,

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

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

or NCI, part of the NIH, awarded to us a 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

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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.

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 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.

$ 574,245 in fiscal year ended March 31, 2023.

STOCK-BASED COMPENSATION

Employee stock options and rights to purchase

shares under stock participation plans are accounted for under the fair value method.

Accordingly, share-based compensation is measured

when all granting activities have been completed, generally the grant date, based on the fair value of the award.

The exercise price of

options is generally equal to the market price of the Company’s common stock (defined as the closing price as quoted on the Nasdaq

Capital Market or OTCBB on the date of grant).

Compensation cost recognized by the Company includes (a) compensation cost for all equity

incentive awards granted prior to April 1, 2006, but not yet vested, based on the grant-date fair value estimated in accordance with the

original provisions of the then current accounting standards, and (b) compensation cost for all equity incentive awards granted subsequent

to March 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of subsequent accounting standards.

We use a Binomial Lattice option pricing model for estimating fair value of options granted (see Note 4).

Employee stock options and rights to purchase shares

under stock participation plans are accounted for under the fair value method.

Accordingly, share-based compensation is measured when

all granting activities have been completed, generally the grant date, based on the fair value of the award.

The exercise price of options

is generally equal to the market price of the Company’s common stock (defined as the closing price as quoted on the Nasdaq Capital

Market or OTCBB on the date of grant).

Compensation cost recognized by the Company includes (a) compensation cost for all equity incentive

awards granted prior to April 1, 2006, but not yet vested, based on the grant-date fair value estimated in accordance with the original

provisions of the then current accounting standards, and (b) compensation cost for all equity incentive awards granted subsequent to March

31, 2006, based on the grant-date fair value estimated in accordance with the provisions of subsequent accounting standards.

Binomial Lattice option pricing model for estimating fair value of options granted (see Note 4).

The following table summarizes share-based compensation

8 unchanged sentences

Basic and diluted loss per common share

We record share-based compensation expenses for

awards of stock options and RSUs under ASC 718, Share-based compensation, or ASC 718.

For awards to non-employees for periods prior to

the adoption of ASU 2018-07, Compensation-Stock Compensation:

Improvements to Non-employee Share-Based Payment Accounting, on April 1,

2019, the Company had applied ASC 505-50, Equity – Equity-based payments to non-employees, or ASC 505-50.

ASC 718 establishes guidance

for the recognition of expenses arising from the issuance of share-based compensation awards at their fair value at the grant date.

We recognize share-based compensation expense

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

We record share-based compensation expenses for awards

of stock options and RSUs under ASC 718, Share-based compensation, or ASC 718.

For awards to non-employees for periods prior to the adoption

of ASU 2018-07, Compensation-Stock Compensation:

Improvements to Non-employee Share-Based Payment Accounting, on April 1, 2019, the Company

had applied ASC 505-50, Equity – Equity-based payments to non-employees, or ASC 505-50.

ASC 718 establishes guidance for the recognition

of expenses arising from the issuance of share-based compensation awards at their fair value at the grant date.

We recognize share-based compensation expense 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.

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.

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

10 unchanged sentences

STOCK PURCHASE WARRANTS

In the past we issued warrants for the purchase

of shares of our common stock in connection with the issuance of common stock for cash.

Warrants issued in connection with common stock

for cash, if classified as equity, are considered issued in connection with equity transactions and the warrant fair value is recorded

to additional paid-in-capital.

In the past we issued warrants for the purchase of

shares of our common stock in connection with the issuance of common stock for cash.

Warrants issued in connection with common stock for

cash, if classified as equity, are considered issued in connection with equity transactions and the warrant fair value is recorded to

additional paid-in-capital.

RESEARCH AND DEVELOPMENT EXPENSES

Our research and development costs are expensed

Our research and development costs are expensed as

We incurred approximately $ 2,520,000 and $ 2,745,000 of research and development expenses for the years ended March 31, 2024

1 unchanged sentence

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any off-balance sheet

arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial statements.

We have not entered into any off-balance sheet arrangements

that have or are reasonably likely to have a current or future material effect on our consolidated financial statements.

SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued Accounting Standards

Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced annual disclosures for specific

categories in the rate reconciliation and income taxes paid disaggregated by federal, state and foreign taxes.

ASU 2023-09 is effective

for public business entities for annual periods beginning after December 15, 2024.

The Company is evaluating if the adoption of this new

standard will have a material effect on our disclosures.

In June 2016, the FASB issued ASU No.

Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, or ASU No.

expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.

2018-07 is effective for interim and annual reporting periods beginning after December 15, 2018.

Entities must apply the guidance retrospectively

with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption.

2016-13, Financial

Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.

The adoption of ASU No.

on April 1, 2019 did not have a material impact on the Company's consolidated financial position, results of operations and related disclosures.

On April 1, 2019, the Company adopted ASC Topic

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.

Topic 842 also allows lessees and lessors to elect

certain practical expedients.

The Company elected the following practical expedients:

Transitional practical expedients, which must be elected as a package and applied consistently to all of the Company’s leases:

The Company need not reassess whether any expired or existing contracts are or contain leases.

The Company need not reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with the previous guidance will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with the previous guidance will be classified as finance leases).

The Company need not reassess initial direct costs for any existing leases.

Hindsight practical expedient.

The Company elected the hindsight practical expedient in determining the lease term (that is, when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company’s right-of-use assets.

2016-13 for smaller

reporting companies that did not previously early adopt was January 1, 2023.

The Company maintained

US Treasury bills with maturities of less than three months and expects zero credit losses from these securities.

the Company did not record an allowance for expected credit losses.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consist of the following:

Schedule of property and equipment

Schedule of property and equipment, net

March 31, 2024

3 unchanged sentences

Accumulated depreciation

Furniture and office equipment, net

Fixed Assets, net

Depreciation expense for the fiscal years ended March 31, 2024 and 2023

1 unchanged sentence

Patents, net consist of the following:

Schedule of patents

Schedule of patents, net

March 31, 2024

3 unchanged sentences

Issued patents, net of accumulated amortization

Patents pending

Amortization expense for our capitalized issued

patents for each of the fiscal years ended March 31, 2023 and 2022 was $ 550 and $ 54,754 , respectively.

As only one capitalized patent

remains to be amortized, future amortization expense on patents is estimated to be approximately $550 per year based on the estimated

life of the patent.

The weighted average remaining life of our remaining capitalized patent is approximately 3 years.

Amortization expense for our capitalized issued patents

for each of the fiscal years ended March 31, 2024 and 2023 was $ 550 .

As only one capitalized patent remains to be amortized, future amortization

expense on patents is estimated to be approximately $550 per year based on the estimated life of the patent.

The weighted average remaining

life of our remaining capitalized patent is approximately 2.0 years.

EQUITY TRANSACTIONS

October 4, 2023, we effected a 1-for-10 reverse stock split of our then outstanding shares of common stock.

Accordingly, each

10 shares of outstanding common stock then held by our stockholders were combined into one share of common stock.

Any fractional shares

resulting from the reverse split were rounded up to the next whole share.

Authorized common stock remained at 60,000,000 shares

following the stock split.

The accompanying consolidated financial statements and accompanying notes have been retroactively revised to

reflect such reverse stock split as if it had occurred on April 1, 2022.

All shares and per share amounts have been revised accordingly.

ISSUANCES OF COMMON STOCK AND WARRANTS

1 unchanged sentence

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 H.C.

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 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,

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

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

Under the 2022 ATM Agreement, Wainwright may sell the 2022 ATM Shares

by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities

Act, including sales made directly on the Nasdaq Capital Market, or on any other existing trading market for the 2022 ATM Shares.

under the 2022 ATM Agreement, Wainwright may sell the 2022 ATM Shares in privately negotiated transactions with our consent and in block

transactions.

Under certain circumstances, we may instruct Wainwright not to sell the 2022 ATM Shares if the sales cannot be effected

at or above the price designated by us from time to time.

We are not obligated to make any sales of the 2022 ATM Shares under

the 2022 ATM Agreement.

The offering of the 2022 ATM Shares pursuant to the 2022 ATM Agreement will terminate upon the termination of

the 2022 ATM Agreement by Wainwright or us, as permitted therein.

The 2022 ATM Agreement contains customary representations, warranties

and agreements by us, and customary indemnification and contribution rights and obligations of the parties.

We agreed to pay Wainwright

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

We also agreed to reimburse Wainwright

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

In the fiscal year ended March 31, 2023, we raised net proceeds of

$ 8,927,211 , net of $ 229,610 in commissions to Wainwright and $ 27,153 in other offering expense, through the sale of, 7,480,836 shares

of our common stock at an average price of $1.19 per share under the 2022 ATM Agreement.

RSU Grants to Non-Employee Directors

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.

Wainwright & Co.,

On March 24, 2022, 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.

Offering Agreement, or the 2022 ATM Agreement, with H.C.

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

as previously filed with the Securities and Exchange Commission, or 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, Wainwright may sell

the 2022 ATM Shares by any method permitted by law and deemed to be an “at the market offering” as defined in Rule 415 promulgated

under the Securities Act, including sales made directly on the Nasdaq Capital Market, or on any other existing trading market for the

2022 ATM Shares.

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

with our consent and in block transactions.

Under certain circumstances, we may instruct Wainwright not to sell the 2022 ATM Shares if

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

We are not obligated to make any 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 will terminate

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

The 2022 ATM Agreement contains customary representations,

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

We agreed to pay

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

We also agreed to reimburse

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

In the fiscal year ended March 31, 2024, 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.

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.

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 granted RSUs under the 2020 Plan to each non-employee director of the Company.

The Director Compensation

Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year, with the RSUs priced at the

average for the closing prices for the five days preceding and including the date of grant, or $2.06 per share as of April 1, 2021.

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

The RSUs were subject to vesting in four equal

quarterly installments on June 30, September 30, December 31, 2021, and March 31, 2022, subject to the recipient’s continued service

with the Company on each such vesting date.

In June 2021, 18,221 vested RSUs held by our non-employee

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

All three non-employee directors elected to return 40% of

their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting in 7,289 of the vested

RSUs being cancelled in exchange for $ 35,786 in aggregate cash proceeds to those independent directors.

In September 2021, 18,221 vested RSUs held by

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

All three non-employee directors elected

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

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

In December 2021, 18,221 vested RSUs held by our

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

All three non-employee directors elected to

return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting in 7,289

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

In March 2022, 18,221 vested RSUs held by our

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

All three non-employee directors elected to

return 40% of their vested RSUs in exchange for cash, in order to pay their withholding taxes on the share issuances, resulting in 7,289

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

There were no vested RSUs outstanding as of March

We did not issue any warrants during the fiscal

years ended March 31, 2023 and 2022.

April 2023, the Compensation Committee of the Board, or Compensation Committee, approved, 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 under

the Director Compensation Policy to each of the three non-employee directors of the Company then serving on the Board of Directors of

the Company, or Board.

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

of each fiscal year for current non-employee directors then serving on the Board, and for a grant of stock options or $75,000 worth of

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

and including the date of grant, or $4.30 per share for the April 2023 RSU grants.

As a result, in April 2023 the three eligible directors

were each granted an RSU in the amount of 11,628 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 dates.

Vesting will terminate upon

the director’s termination of Continuous Service prior to any vesting date.

Unvested RSUs covering 4,885

shares of common stock were outstanding as of March 31, 2024.

Equity Transactions in the Fiscal Year Ended March 31, 2023.

During 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 748,084

shares of our common stock at an average price of $ 11.90 per share under the 2022 ATM Agreement.

RSU Grants to Non-Employee Directors

The Compensation

Committee approved, effective as of April 1, 2022, pursuant to the terms of 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, and the grant of an RSU for the then

newly appointed non-employee 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 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 $14.60 per share as of April 1, 2022.

The two then-current eligible

directors each was granted a contingent RSU in the amount of 3,425 shares

under the 2020 Plan and the then newly appointed director received a contingent RSU grant for 5,137 shares

under the 2020 Plan.

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.

We did not issue any warrants during the fiscal years

ended March 31, 2024 and 2023.

A summary of the aggregate warrant activity for the years ended March 31,

2024 and 2023 is presented below:

Summary of warrant activity

Schedule of warrant activity

Fiscal Year Ended March 31,

8 unchanged sentences

2024 is as follows:

Summary of warrant activity exercisable and outstanding

Schedule of warrant activity exercisable and outstanding

Warrants Outstanding

5 unchanged sentences

$25.00 - $27.50

The detail of the warrants outstanding and exercisable as of March 31,

2023 is as follows:

Warrants Outstanding

Warrants Exercisable

Exercise Prices

Exercise Price

$18.75 or Below

$25.00 - $27.50

STOCK-BASED COMPENSATION:

2020 EQUITY INCENTIVE PLAN

In September 2020, our stockholders approved the

adoption of the 2020 Plan, to provide incentives to attract, retain and motivate employees, directors and consultants, whose present and

potential contributions are important to our success, by offering them an opportunity to participate in our future performance through

awards of options, the right to purchase common stock, stock bonuses and stock appreciation rights and other awards.

We initially authorized

a total of 1,842,556 common shares for issuance under the 2020 Plan pursuant to stock option grants, RSUs or other forms of stock-based

compensation.

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.

In September 2020, our stockholders approved the adoption

of the 2020 Plan, to provide incentives to attract, retain and motivate employees, directors and consultants, whose present and potential

contributions are important to our success, by offering them an opportunity to participate in our future performance through awards of

options, the right to purchase common stock, stock bonuses and stock appreciation rights and other awards.

We initially authorized a total

of 168,182 common shares for issuance under the 2020 Plan pursuant to stock option grants, RSUs or other forms of stock-based compensation.

In September 2022, our stockholders approved an increase

in the number of shares of common stock authorized for issuance under the 2020 Plan by 180,000 shares.

As of March 31, 2024, there were

200,948 shares available under the 2020 Plan.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

The Company maintains the Director Compensation

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

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 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.

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.

new non-employee 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.

Please see above under the heading "Equity Transactions

in the Fiscal Year Ended March 31, 2024—RSU Grants to Non-Employee Directors" for disclosure regarding equity awards under

the Director Compensation Policy during the fiscal year ended March 31, 2024.

STOCK OPTION ACTIVITY

During the fiscal year ended March 31, 2024, we

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.

did not issue stock option grants.

The assumptions used in estimating the fair value of stock options in the fiscal year ended

March 31, 2023 included volatility ranging from 136.1 %

dividend rate, and risk-free rates between 1.49 %

The weighted average expected volatility was 138.07 %

Options outstanding that were vested as of March 31,

2024 and options that are expected to vest subsequent to March 31, 2024 are as follows:

Options outstanding that have vested and are expected to vest

Schedule of options outstanding that have vested and are expected to

Expected to vest

The following is a summary of the stock options

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

The following is a summary of the stock options outstanding

at March 31, 2024 and 2023 and the changes during the years then ended:

Schedule of stock option activity

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Weighted average estimated fair value of options granted

There were no stock option grants during the fiscal year ended March 31,

There were 12,222 stock options granted during the fiscal year ended March 31, 2023.

The weighted average grant date fair value

of stock options granted during the fiscal year ended March 31, 2023 was $ 61,146 .

There were 54,428 RSUs granted during the fiscal year ended

March 31, 2024.

The weighted average grant date fair value of RSUs granted during the fiscal year ended March 31, 2024 was $ 58,333 .

were no stock option exercises during the fiscal years ended March 31, 2024 and 2023.

The table below summarizes nonvested stock options as of March

31, 2024 and changes during the year ended March 31, 2024.

Schedule of nonvested shares

Weighted Average Grant Date Fair Value

Nonvested stock options at April 1, 2023

Nonvested stock options at March 31, 2024

The detail of the options outstanding and exercisable as of March 31, 2024

is as follows:

Detail of options outstanding and exercisable by exercise price

Schedule of detail of options outstanding and exercisable by exercise

Options Outstanding

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$6.90 - $16.80

$2.45 - $5.17

$57.00 - $142.50

We recorded stock-based compensation expense related

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of operations for the years ended March 31, 2024 and 2023.

Our total stock-based compensation for fiscal

years ended March 31, 2023 and 2022 included the following:

The table below summarizes restricted stock units

as of March 31, 2024 and changes during the year ended March 31, 2024.

Schedule of RSUs

Nonvested RSUs at April 1, 2023

Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units

Nonvested RSUs at March 31, 2024

Our total stock-based compensation for fiscal years

ended March 31, 2024 and 2023 included the following:

Schedule of stock-based compensation

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Vesting of restricted stock units

Vesting of restricted shares issued for services

Vesting of stock options

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adjustments for the fiscal year ended March 31, 2024 was insignificant.

On March 31, 2023, our outstanding stock options

had no intrinsic value since the closing price on that date of $ 0.38 per share was below the weighted average exercise price of our outstanding

On March 31, 2024, our outstanding stock options had

no intrinsic value since the closing price on that date of $ 1.68 per share was below the weighted average exercise price of our outstanding

stock options.

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DUE TO RELATED PARTIES

Historically, certain of our officers and other

related parties have advanced us funds, agreed to defer compensation and/or paid expenses on our behalf to cover working capital deficiencies.

There were no such related party transactions during the fiscal year ended March 31, 2023, except that we had accrued unpaid Board fees

of $ 57,000 owed to our outside directors as of March 31, 2023.

For the fiscal year ended

March 31, 2024 we accrued unpaid fees of $ 68,250 owed to our non-employee directors.

As a result of entering

into a Separation Agreement effective November 27, 2023 with our former Chief Executive Officer, or CEO, Charles J.

Fisher, M.D., or

the Separation Agreement, we paid out accrued vacation of $ 53,076

Fisher in the fiscal year ended March 31, 2024.

That accrued vacation was previously recorded in the due to related parties

In addition, pursuant to the terms of Dr.

Fisher’s Executive Employment Agreement, we accrued $ 435,378 for

cash severance payments payable monthly and COBRA payments to be paid monthly over a 12-month period that began on December 1,

Additionally, $ 393,139

of stock-based compensation was recorded during the fiscal year ended March 31, 2024 for the acceleration of vesting for 50% of then outstanding

options held by Dr.

Fisher at the time of his separation from the Company.

due to related parties were comprised of the following items:

Schedule of amounts

due to related parties

March 31, 2023

March 31, 2022

Accrued Board fees

Accrued vacation

Accrued vacation to all employees

Accrued separation expenses for former executive

Total due to related parties

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Other current liabilities were comprised of the following items:

Other Current Liabilities

Schedule of other current liabilities

March 31, 2024

1 unchanged sentence

Accrued professional fees

Accrued commission liability

Total other current liabilities

For the years ended March 31, 2023 and 2022, we

had no income tax expense due to our net operating losses and 100% deferred tax asset valuation allowance.

At March 31, 2023 and 2022, we had net deferred

tax assets as detailed below.

These deferred tax assets are primarily composed of capitalized research and development costs and tax net

operating loss carryforwards.

Due to uncertainties surrounding our ability to generate future taxable income to realize these assets,

a 100% valuation allowance has been established to offset the net deferred tax assets.

Significant components of our net deferred tax

assets at March 31, 2023 and 2022 are shown below:

During 2017 through 2020, the Company incorrectly

recorded accrued commission liability of approximately $404,000.

The Company reversed accrued commission liability of approximately $404,000

during the year ended March 31, 2024.

For the years ended March 31, 2024 and 2023, we had

no income tax expense due to our net operating losses and 100% deferred tax asset valuation allowance.

At March 31, 2024 and 2023, we had net deferred tax

assets as detailed below.

These deferred tax assets are primarily composed of capitalized research and development costs and tax net operating

loss carryforwards.

Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a 100% valuation

allowance has been established to offset the net deferred tax assets.

Significant components of our net deferred tax assets

at March 31, 2024 and 2023 are shown below:

Schedule of deferred tax assets

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Valuation allowance for deferred tax assets

( 30,022,000 )

( 27,090,000 )

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

carryforwards for federal and state purposes approximating $ 88 million and $ 80 million, portions of which began to expire in the year

Pursuant to Internal Revenue Code Section 382, use of

our tax net operating loss carryforwards may be limited.

The amount of the annual limitation, if any, will be determined based on the value of the Company immediately

prior to an ownership change.

Subsequent ownership changes may further affect the limitation in future years.

If and when the Company

utilizes the NOL carryforwards in a future period, it will perform an analysis to determine the effect, if any, of these loss limitation

rules on the NOL carryforward balances.

At March 31, 2024, we had tax net operating loss carryforwards

for federal and state purposes approximating $ 98 million and $ 91 million, respectively, portions of which began to expire in the year

The indefinite position is approximately $ 36 million.

Research and Development credits begin to expire in 2025.

The provision for income taxes on earnings subject

to income taxes differs from the statutory federal rate for the years ended March 31, 2024 and 2023 due to the following:

Provision for income taxes

Schedule of provision for income taxes

Income taxes (benefit) at federal statutory rate of 21.00%

$ ( 2,526,000 )

$ ( 2,188,000 )

Tax effect on non-deductible expenses and credits

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Pursuant to Internal Revenue Code Section 382, use of our tax net operating loss carryforwards may be limited.

ASC 740, “Income Taxes”, clarifies

the accounting for uncertainty in income taxes recognized in an entity's financial statements, and prescribes recognition thresholds and

measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return.

Under ASC 740,

the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not

to be sustained upon audit by the relevant taxing authority.

ASC 740, “Income Taxes”, clarifies the

accounting for uncertainty in income taxes recognized in an entity's financial statements, and prescribes recognition thresholds and measurement

attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return.

Under ASC 740, the impact

of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to

be sustained upon audit by the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less than

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31, 2024 or March 31, 2023.

Our tax returns remain open for examination by

the applicable authorities, generally 3 years for federal and 4 years for state.

We are currently not under examination by any taxing

Our tax returns remain open for examination by the

applicable authorities, generally 3 years for federal and 4 years for state.

We are currently not under examination by any taxing authorities.

COMMITMENTS AND CONTINGENCIES

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

We have had the following material changes to

our contractual obligations and commitments outside the ordinary course of business during the fiscal year ended March 31, 2023:

We have had the following material changes to our

contractual obligations and commitments outside the ordinary course of business during the fiscal year ended March 31, 2024:

LEASE COMMITMENTS

Office, Lab and Manufacturing Space Leases

In December 2020, we entered into an agreement

to lease approximately 2,823 square feet of office space and 1,807 square feet of laboratory space located at 11555 Sorrento Valley Road,

In December 2020, we entered into an agreement to

lease approximately 2,823 square feet of office space and 1,807 square feet of laboratory space located at 11555 Sorrento Valley Road,

Suite 203, San Diego, California 92121 and 11575 Sorrento Valley Road, Suite 200, San Diego, California 92121, respectively.

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The current monthly base rent under the manufacturing component of the lease is $ 12,452 .

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

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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.

As of our March 31, 2024 balance sheet, we have a

right-of-use lease asset of $ 883,054 .

The following table presents a maturity analysis of

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

All of our leases conterminously

expire during the fiscal year ending March 31, 2027.

Schedule of lease maturities

Schedule of lease maturity

Fiscal Years Ended March 31,

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Mobile Clean Room

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.

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.

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.

The arrangement

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

Overall, our rent expense, which is included in general

and administrative expenses, approximated $ 420,353 and $ 519,000 for the fiscal years ended March 31, 2024 and 2023, respectively.

LEGAL MATTERS

From time to time, claims are made against us

in the ordinary course of business, which could result in litigation.

From time to time, claims are made against us in the

ordinary course of business, which could result in litigation.

Claims and associated litigation are subject to inherent uncertainties

1 unchanged sentence

products or engaging in other activities.

The occurrence of an unfavorable outcome in any

specific period could have a material adverse effect on our results of operations for that period or future periods.

We are not presently

a party to any pending or threatened legal proceedings.

The occurrence of an unfavorable outcome in any specific

period could have a material adverse effect on our results of operations for that period or future periods.

We are not presently a party

to any pending or threatened legal proceedings.

SUBSEQUENT EVENTS

Management has evaluated events subsequent to

March 31, 2023 through the date that the accompanying consolidated financial statements were filed with the Securities and Exchange Commission

Management has evaluated events subsequent to March

31, 2024 through the date that the accompanying consolidated financial statements were filed with the Securities and Exchange Commission

for transactions and other events which may require adjustment of and/or disclosure in such financial statements.

Sales Under 2022 ATM Agreement

Subsequent to March 31, 2023, we raised net proceeds

of $1,086,119, net of $27,999 in commissions to Wainwright and $5,846 in other offering expense, through the sale of 1,778,901 shares

of our common stock at an average price of $0.61 per share under the 2022 ATM Agreement.

In April 2023, the Compensation Committee approved,

pursuant to the terms of the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each

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

The Director Compensation Policy provides for a grant of

stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current directors then serving on the Board, and for a

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

Public Offering

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.

Maxim Group 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, the Board 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.

The Director Compensation Policy provides for a grant of stock options or $50,000

worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board, and for a grant of stock

options or $75,000 worth of RSUs for a newly elected non-employee director, with each RSU priced at the average for the closing prices

for the five days preceding and including the date of grant, or $1.52 per share for the April 2024 RSU grants.

As a result, in April 2024

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

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

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

What changed 10-K

Item 9A. Controls and Procedures