AETHLON MEDICAL INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information 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 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, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation as of the end of the period covered by this Annual Report under the supervision and with the participation of our management, including our Chief Executive Officer, who also serves as our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Internal Control over Financial Reporting (a) Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including our Chief Executive Officer, who also serves as our Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2025. The evaluation was conducted in accordance with the guidelines established by the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, and the successful implementation of remediation measures addressing the previously identified material weaknesses, management concluded that our internal control over financial reporting was effective as of March 31, 2025. Remediation of Previously Reported Material Weaknesses Segregation of Duties and User Access Controls As previously disclosed, management identified a material weakness in internal control over financial reporting related to segregation of duties and user access controls within our financial systems. Specifically, the Company had not adequately maintained user access controls to restrict both user and privileged access to financial applications, allowing the same individual to initiate, record, and approve accounting entries. Additionally, check stock was stored in the office of an authorized signatory, representing a weakness in physical access control. This control deficiency was due in part to our limited accounting and finance staff, which hindered the design and implementation of effective segregation of duties. The lack of adequate user access controls and the absence of sufficient compensating controls could have resulted in a material misstatement of the financial statements. 60 To remediate this material weakness, the Company implemented the following measures: · In November 2023, check stock was relocated to a secure area accessible only to individuals without check signing authority, to mitigate unauthorized access risks. Subsequently, the Company discontinued maintaining any physical check stock onsite. While the Company continues to issue physical checks as needed, these are processed exclusively through the bank’s controlled check issuance services, eliminating the risk associated with onsite check stock and enhancing control over disbursements. · In May 2024, the Company completed an upgrade to its accounting software, enabling the establishment of distinct user roles and system access controls. While certain individuals may both initiate and record transactions due to the size of the finance team, all transactions are reviewed and approved by personnel independent of those entering the transactions. Management has tested the design and operating effectiveness of these new controls and concluded that the material weakness was remediated as of March 31, 2025. Accounting for Accrued Commission Liabilities The Company also previously identified a material weakness in internal control over financial reporting related to the accounting for accrued commission liabilities. From fiscal 2017 through fiscal 2020, the Company incorrectly recorded commission accruals totaling approximately $404,000. This error arose due to the incorrect application of U.S. GAAP and the absence of adequate review controls, and it was not identified and corrected in a timely manner. The Company reversed the erroneous accrued commission liability during the year ended March 31, 2024, with the correction reflected as a reclassification to equity. To prevent recurrence, the Company implemented quarterly controls during fiscal 2025 for the review and validation of accruals, including those related to commissions. These controls include formal procedures for the assessment of accrual balances, with overall oversight provided by the Audit Committee in connection with its review of the Company’s financial reporting. Management has evaluated the design and operating effectiveness of these controls and concluded that the material weakness was remediated as of March 31, 2025. Limitations on Internal Control Over Financial Reporting Management recognizes that a system of internal control over financial reporting, no matter how well designed and operated, can provide only reasonable assurance and may not prevent or detect all material misstatements. Internal control over financial reporting has inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or changes in conditions that may render controls inadequate. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with the policies or procedures may deteriorate. (b) 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, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the three months ended March 31, 2025, none of our directors or officers entered into , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” that were intended to satisfy the affirmative defense conditions of Rule 10b5-1, in each case as defined in Item 408 of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 61 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The names, ages and positions of our directors and executive officers as of June 26, 2025 are listed below: NAMES TITLE OR POSITION(1) AGE James B. Frakes Chief Executive Officer, Chief Financial Officer and Director 68 Edward G. Broenniman Chairman and Director 88 Angela Rossetti Director 71 Chetan S. Shah, M.D. Director 55 Nicolas Gikakis Director 58 Steven P. LaRosa, M.D. Chief Medical Officer 58 (1) Our Board of Directors has determined that Mr. Broenniman, Mr. Gikakis, Ms. Rossetti and Dr. Shah meet the requirements to be determined as “independent directors” for all purposes, including Compensation Committee and Audit Committee purposes, under the Nasdaq Stock Market (“Nasdaq”) rules and for federal securities law purposes. Mr. Frakes is not independent, as he also functions as executive and officer of the Company. Certain additional information concerning the individuals named above is set forth below. This information is based on information furnished to us by each individual noted. James B. Frakes Chief Executive Officer, Chief Financial Officer and Director Mr. Frakes has served as Chief Executive Officer and Chief Financial Officer since October 3, 2024, having previously served as Interim Chief Executive Officer beginning in November 2023. He has also served as a director of the Company since November 2023, and has held the role of Chief Financial Officer of the Company since September 2010. Prior to being appointed as Chief Financial Officer, Mr. Frakes served as Senior Vice President, Finance of the Company from January 2008 to September 2010. He previously served as the Chief Financial Officer for Left Behind Games Inc., a start-up video game company. Prior to 2006, he served as Chief Financial Officer of NTN Buzztime, Inc., an interactive entertainment company. Mr. Frakes received an MBA from the University of Southern California and a B.A. with Honors from Stanford University. Edward G. Broenniman, Chairman and Director Mr. Broenniman has served as a director of the Company since March 1999. He has been the managing director of The Piedmont Group, LLC, a venture advisory firm, since 1978. Mr. Broenniman currently serves on the boards of two privately held firms. He previously served on the boards of the nonprofit entities, the Dingman Center for Entrepreneurship’s Board of Advisors at the University of Maryland (1989 to 2020), the National Capital Chapter of Corporate Directors (Founder, Chair from 2003 to 2005 and director from 2001 to 2018) and the Board of the Association for Corporate Growth, National Capital Chapter (Founder, Chair from 2000 to 2018). Mr. Broenniman received his MBA from Stanford Graduate School of Business and his B.A. from Yale University. 62 Nicolas Gikakis, Director Mr. Gikakis has served as a director of the Company since July 2023. From 2021 to May 2023, Mr. Gikakis served as the Head of Commercial for WearOptimo Pty Ltd, a private Australian medical device and digital health company. Previously, from 2017 to 2019, Mr. Gikakis served as Vice President of Strategy and Corporate Development at Oventus Medical Limited, a private medical device company, during which time he assisted with the commercial expansion of its sleep apnea device. From 2012 to 2021, Mr. Gikakis held various leadership and independent strategic advisor positions in the healthcare industry in sales, marketing, product development, and corporate development and transactions, including for companies working with blood filtration and purification. Mr. Gikakis earned a B.S. in bioengineering from the University of Pennsylvania and holds an MBA from George Mason University, with earlier work in bench and clinical research, and clinical experience at the University of Pennsylvania. Angela Rossetti, Director Ms. Rossetti has served as a director of the Company since April 2022. As an active consultant since March 2018, her client list has included Kala Pharmaceuticals, Inc. and Celgene Corporation, among others. From June 2015 through July 2017, Ms. Rossetti served as Vice President of Cell Machines, Inc., an early-stage biopharmaceutical company developing novel protein therapies, where she assisted with the commercialization of technology for hemophilia and other diseases. Ms. Rossetti has held a number of positions within pharmaceutical commercial development, marketing, communications and finance, including Vice President of a Global Commercial Medicine Team at Pfizer Inc. from 2007 to 2012, where she led a global smoking cessation campaign. Ms. Rossetti previously served on the board of directors of Palatin Technologies, Inc., a public biopharmaceutical company, from June 2013 to December 2020. Ms. Rossetti currently holds positions as an adjunct Assistant Professor of Medical and Pharmaceutical Ethics at New York Medical College and an Adjunct Associate at Albert Einstein College of Medicine. Ms. Rossetti graduated from a joint program of the Albert Einstein College of Medicine and Benjamin N. Cardozo School of Law with an M.S. in Bioethics, has an M.B.A. from Columbia University Graduate School of Business and a B.A. in Biology and English from the University of Pennsylvania. Chetan S. Shah, M.D., Director Dr. Shah has served as a director of the Company since June 2013. Dr. Shah is a board certified Otolaryngologist. He is a partner and board member of the Surgery Center at Hamilton, as well as Physician Management Systems and Princeton Eye & Ear, which he founded in 2009. Dr. Shah serves on the board of one other private company. He holds teaching positions and serves on multiple hospital committees in the area and is on the Audiology and Speech Language Pathology Committee for the State of New Jersey. Dr. Shah also was a member of the Board of Medical Examiners for the State of New Jersey. Dr. Shah received his Bachelor’s degree and Medical Degree from Rutgers University and Robert Wood Johnson Medical School, respectively. Steven P. LaRosa, M.D., Chief Medical Officer Dr. LaRosa has served as our Chief Medical Officer since January 2021 and served as our Chief Scientific Officer from May 2021 until February 2023. Dr. LaRosa has over 20 years of experience as a practicing physician and infectious disease specialist. Prior to joining the Company, Dr. LaRosa served as the Vice President of Clinical Development of Entasis Therapeutics, a spin-out of AstraZeneca focused on pathogen-targeted small molecules to treat serious multidrug-resistant Gram-negative infections, from March 2020 to December 2020. Prior to joining Entasis, Dr. LaRosa was an Attending Physician in the Division of Infectious Disease at Beverly Hospital, a member of Beth Israel Lahey Health. Prior to Beverly Hospital from September 2012 to March 2020, he was an Attending Physician in the Division of Infectious Diseases at Rhode Island Hospital. Prior to that, Dr. LaRosa was an Associate Staff Physician in the Department of Infectious Disease at the Cleveland Clinic Foundation. He also served as a Clinical Research Physician for Eli Lilly and Company. Throughout his career, Dr. LaRosa has had several academic appointments. Dr. LaRosa holds his M.D. from Boston University School of Medicine and his B.S. in Biology from Boston College. He completed an Internal Medicine Residency and Chief Residency at the Cleveland Clinic Foundation and Infectious Disease Fellowship at Massachusetts General Hospital. He is Board Certified by the ABIM in Internal Medicine and Infectious Disease. 63 Family Relationships There are no family relationships between or among the directors or executive officers. There are no arrangements or understandings between any two or more of our directors or executive officers or between any of our directors or executive officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the current Board of Directors. There are also no arrangements, agreements or understandings between non-management stockholders that may directly or indirectly participate in or influence the management of our affairs. Legal Proceedings To our knowledge, (i) no director or executive officer has been a director or executive officer of any business that has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years; (ii) no director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years; (iii) no director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years; and (iv) no director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years. Board of Directors Our Board of Directors has the responsibility for establishing broad corporate policies and for overseeing our overall performance. Members of our Board of Directors are kept informed of our business activities through discussions with our Interim Chief Executive Officer and other executive officers, by reviewing analyses and reports sent to them and by participating in Board and committee meetings. Mr. Broenniman serves as Chairman of our Board and Mr. Frakes as our Interim Chief Executive Officer, and we have not designated a lead independent director. We believe that having the offices of Chairman of our Board and Interim Chief Executive Officer held by two different people is appropriate for a company of our size and stage of development in order to maximize efficiencies of our limited available personnel resources. Nevada law provides that each director holds office after the expiration of his or her term until a successor is elected and qualified, or until the director resigns or is removed, resulting in a term that extends to our next annual meeting of stockholders. Our Board of Directors presently has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, on which each of Mr. Broenniman and Ms. Rossetti serve as independent directors. In addition, Dr. Shah serves as an independent director on the Audit, Compensation and Nominating and Corporate Governance Committees, and Mr. Gikakis serves as an independent director on the Nominating and Corporate Governance Committees. Mr. Broenniman is Chair of the Audit Committee, Dr. Shah is Chair of the Compensation Committee and Ms. Rossetti is Chair of the Nominating and Corporate Governance Committee. Our Board of Directors believes that sound governance practices and policies provide an important framework to assist them in fulfilling their duty to stockholders. Our Board of Directors has implemented separate committees for the areas of audit, compensation and nomination of directors, annual review of the independence of our Audit and Compensation Committee members, maintenance of a majority of independent directors and written expectations of management and directors, among other best practices. Our Board of Directors has determined that four of our five current directors meet the independence requirements of the Nasdaq Capital Market, on which our common stock is listed. In the judgment of our Board of Directors, Mr. Frakes does not meet such independence standards, as he serves as an executive officer of the Company. In reaching its conclusions, our Board of Directors considered all relevant facts and circumstances with respect to any direct or indirect relationships between our Company and each of the directors, including those discussed under the caption “Certain Relationships and Related Transactions,” below. Our Board of Directors determined that any relationships that exist or existed in the past between our Company and each of the independent directors were immaterial on the basis of the information set forth in the above-referenced sections. 64 Audit Committee and Audit Committee Financial Expert Our Board of Directors formed an Audit Committee in May 1999. Our Board of Directors has determined that Mr. Broenniman, due to his professional experience business acumen and independence, meets the definition of an “audit committee financial expert” as defined in Item 407(d)(5)(ii) under Regulation S-K, promulgated under the Exchange Act. Each of the members of the Audit Committee has a basic understanding of finance and accounting and is able to read and understand fundamental financial statements. Our Board of Directors has determined that each of the members of the Audit Committee meets the independence requirements applicable to audit committee members of Nasdaq Capital Market companies. The Audit Committee has the authority to appoint, review and discharge our independent registered public accounting firm. The Audit Committee reviews the results and scope of the audit and other services provided by our independent registered public accounting firm, as well as our accounting principles and our system of internal controls, reports the results of their review to the full Board of Directors and to management and recommends to the full Board of Directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K. The Audit Committee has adopted a charter, which can be found on our website under “Investors – Governance – Governance Documents.” The reference to or inclusion of our website address in this Amendment No. 1 does not include or incorporate by reference the information on our website into this Amendment No. 1. Compensation Committee The Compensation Committee approves or makes recommendations to our Board of Directors on decisions concerning compensation of the executive management team and non-employee directors and administers our stock-based incentive compensation plans. The Chair establishes meeting agendas after consultation with other committee members. Our Interim Chief Executive Officer and other members of management regularly discuss our compensation issues with Compensation Committee members. Subject to Compensation Committee review, modification and approval, our Chief Executive Officer typically makes recommendations respecting bonuses and equity incentive awards for the other members of the executive management team. The Compensation Committee establishes all bonus and equity incentive awards for all executive members of the management team. Our Board of Directors has determined that all members of the Compensation Committee meet the independence requirements applicable to Nasdaq Capital Market companies. With respect to calendar year 2024, our Compensation Committee considered compensation information provided by Anderson Pay Advisors LLC (“Anderson”), a compensation consultant, in determining executive compensation. Anderson provided competitive compensation data showing that our cash compensation generally was and made cash compensation recommendations designed to compensate our officers in line with the 50% range for similarly situated companies. The Compensation Committee has adopted a charter, which can be found on our website at “Investors –Governance – Governance Documents.” The reference to or inclusion of our website address in this Amendment No. 1 does not include or incorporate by reference the information on our website into this Amendment No. 1. Nominating and Corporate Governance Committee The responsibilities of the Nominating and Corporate Governance Committee include: · overseeing our corporate governance functions on behalf of our Board of Directors; · making recommendations to our Board of Directors regarding corporate governance issues; · identifying and evaluating candidates to serve as directors of our Company consistent with criteria approved by our Board of Directors; · selecting director candidates or recommending such candidates to our Board of Directors for selection; and · reviewing and evaluating the performance of our Board of Directors. 65 The Nominating and Corporate Governance Committee has adopted a charter, which can be found on our website at “Investors – Governance – Governance Documents.” The reference to or inclusion of our website address in this Amendment No. 1 does not include or incorporate by reference the information on our website into this Amendment No. 1. Stockholder Nominees for Director There have been no material changes to the procedures by which stockholders may recommend nominees to the Board of Directors. Code of Ethics In February 2005, our Board of Directors approved a “Code of Business Conduct and Ethics” (as amended from time to time, the “Code”), which applies to our principal executive officer, our principal financial officer, our principal accounting officer and persons performing similar tasks. In February 2020, the Board of Directors adopted an amended Code, which is applicable to all of our directors, officers and other employees and which is available on our website at www.aethlonmedical.com. If we make any substantive amendments to, or grant any waivers from, the Code for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a Current Report on Form 8-K. The inclusion of our website address in this Amendment No. 1 does not include or incorporate by reference the information on our website into this Amendment No. 1. Incentive Compensation Recoupment Policy We have adopted an incentive compensation recovery policy (the “Compensation Recovery Policy”) that is designed to comply with, and will be interpreted in a manner consistent with, Section 10D and Rule 10D-1 of the Exchange Act and the applicable rules of the Nasdaq Stock Market, including any interpretive guidance provided by Nasdaq. Under our Compensation Recovery Policy, in the event of an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct a material error in previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Company must recover erroneously awarded incentive-based compensation previously paid to the Company’s executive officers in accordance with the terms of such Compensation Recovery Policy. Furthermore, under the Compensation Recovery Policy, the Company is prohibited from indemnifying any executive officer or former executive officer against the loss of erroneously awarded incentive-based compensation and from paying or reimbursing an executive officer for purchasing insurance to cover any such loss. A copy of our Compensation Recovery Policy is attached as Exhibit 97.1 to this Amendment No. 1. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial stockholders are required by Commission regulations to furnish us with copies of all Section 16(a) forms they file. To the best of the Company’s knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us during or with respect to the year ended March 31, 2025 and written representations that no other reports were required, there were no late Section 16 filings during the year ended March 31, 2025. ITEM 11. EXECUTIVE COMPENSATION We are a “smaller reporting company” under Item 10 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the following compensation disclosure is intended to comply with the requirements applicable to smaller reporting companies. Although the rules allow us to provide less detail about our executive compensation program, the Compensation Committee of our Board of Directors (the “Compensation Committee”) is committed to providing the information necessary to help stockholders understand its executive compensation-related decisions. Accordingly, this section includes supplemental narratives that describe the 2024 fiscal year executive compensation program for our named executive officers. 66 Our named executive officers for the fiscal year ended March 31, 2025, consist of our Chief Executive Officer, who also serves as our Principal Financial Officer; our Chief Medical Officer; and our former Senior Vice President, Chief Operating Officer, who served during the fiscal year but was no longer employed as of year-end. These individuals represented our principal executive officers and the two most highly compensated executive officers other than our principal executive officers. · James B. Frakes, our Chief Executive Officer and Chief Financial Officer; · Steven P. LaRosa, M.D., our Chief Medical Officer; and · Guy F. Cipriani, our former Senior Vice President, Chief Operating Officer. SUMMARY COMPENSATION TABLE FOR 2025 AND 2024 FISCAL YEARS The following table summarizes all compensation earned by our named executive officers for the fiscal years ended March 31, 2025 and 2024. Named And Principal Position Fiscal Year Ended March 31, Salary ($) All Other Compensation ($) Total ($) James B. Frakes 2025 500,000 – 500,000 Chief Executive Officer and Chief Financial Officer 2024 416,449 – 416,449 Steven P. LaRosa, M.D. 2025 430,000 50,000 480,000 Chief Medical Officer 2024 430,000 – 430,000 Guy F. Cipriani 2025 199,500 196,188 (1) 395,688 Senior Vice President, Chief Operating Officer 2024 378,064 – 378,064 (1) Includes a severance payment of $178,750 and a vacation payout of $17,438, each paid in connection with the executive’s termination of employment. Narrative Disclosure to Executive Summary Generally, the three principal components of our executive compensation program for our named executive officers are base salary, executive cash bonus and long-term incentive equity compensation. We do not have any formal policies for allocating compensation among salary, performance bonus awards and equity grants, short-term and long-term compensation or among cash and non-cash compensation. Instead, the Compensation Committee considered compensation information provided by Anderson Pay Advisors LLC, or Anderson, our compensation consultant, in determining the compensation to recommend to the Board of Directors for its approval, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. We generally target providing total executive and director compensation at the 50% range for comparable companies. Base Salary Base salary provides financial stability and security to our named executive officers through a fixed amount of cash for performing job responsibilities. Each of our named executive officers’ 2025 and 2024 calendar year base salaries are listed in the table below, which reflects the Compensation Committees’ review of the data provided by Anderson and the Compensation Committee’s goal of setting salaries to be at the 50% range for comparable companies. Name 2025 Base Salary 2024 Base Salary James B. Frakes $ 500,000 $ 500,000 (1) Steven P. LaRosa, M.D. $ 430,000 $ 430,000 Guy F. Cipriani – $ 390,000 (2) (1) Mr. Frakes’ annual base salary was increased from $360,000 to $500,000, effective as of November 7, 2023 in connection with his appointment as interim Chief Executive Officer (2) Mr. Cipriani’s annual base salary was increased from $370,000 to $390,000, effective as of November 7, 2023 in connection with his appointment as Senior Vice President, Chief Operating Officer. Mr. Cipriani’s employment was terminated on October 3, 2024. 67 Executive Cash Bonuses and Annual Cash Incentives With respect to the fiscal year ended March 31, 2025, we approved a cash bonus of $50,000 to our Chief Medical Officer. We did not approve any annual cash incentives for our named executive officers. Equity-Based Incentive Awards Individual stock option grants are determined based on a number of factors, including current corporate and individual performance, outstanding equity holdings and their retention value and total ownership, historical value of our stock, internal equity amongst executives and market data provided by Anderson. In the fiscal year ended March 31, 2025, we did not approve any equity-based incentive awards for our named executive officers. Granting of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. Other than our RSU grants in every April to our independent directors, we have not made any awards to any named executive officer or employee during the past two fiscal years. Employment and Separation Agreements On December 12, 2018, we entered into an executive employment agreement with Mr. Frakes, which was amended in November 2023 and currently governs the terms of his employment. Effective November 7, 2023, in connection with his appointment as Interim Chief Executive Officer, the Board of Directors increased Mr. Frakes’ annual base salary to $500,000. On October 3, 2024, Mr. Frakes was appointed as our permanent Chief Executive Officer. He will also continue to serve as Chief Financial Officer. The agreement also provides that Mr. Frakes is eligible to receive an annual cash performance bonus, based on the achievement of individual and company performance objectives to be established annually by the Board of Directors or its Compensation Committee. The decision to award a bonus, and the amount, is at the discretion of the Board of Directors or the Compensation Committee. In the event Mr. Frakes’ employment is terminated without cause or he resigns for good reason (as defined in the agreement), he will be entitled to continue receiving his base salary and company-paid healthcare premiums for 12 months following such termination. Effective July 1, 2024, Lee Arnold, Chief Science Officer of the Company, was terminated by the Company. As a result of Mr. Cipriani’s termination, that executive employment agreement entered into by and between Mr. Arnold and the Company on February 1, 2023, (the “Employment Agreement”), terminated July 1, 2024. In connection with his departure, Mr. Arnold is entitled to receive twelve months’ severance and related separation benefits, consistent with the terms of his Employment Agreement. Effective October 3, 2024, Guy F. Cipriani, Chief Operating Officer of the Company, has departed the Company. Mr. Cipriani’s departure was not related to the Company’s financial or operating results or to any disagreements or concerns regarding the Company’s financial or reporting practices. As a result of Mr. Cipriani’s departure, that executive employment agreement entered into by and between Mr. Cipriani and the Company on January 2, 2021, as amended (the “Employment Agreement”), terminated effective October 3, 2024. In connection with his departure, Mr. Cipriani is entitled to receive twelve months’ severance and related separation benefits, consistent with the terms of his Employment Agreement. On January 4, 2021, we entered into an executive employment agreement with Dr. LaRosa, which governs the current terms of his employment with us. Dr. LaRosa’s annual base salary was increased by the Compensation Committee to $430,000, effective May 1, 2021, when Dr. LaRosa assumed the additional duties of interim Chief Scientific Officer, which he held until February 2023. In addition, we paid Dr. LaRosa a one-time signing bonus of $100,000. Further, Dr. LaRosa was eligible to receive a grossed-up reimbursement of relocation expenses pursuant to the terms of his employment agreement. In addition, the agreement provides that Dr. LaRosa is eligible for an annual cash performance bonus for each year with a target amount of 40% of Dr. LaRosa’s then-current annual base salary, based upon our and Dr. LaRosa’s achievement of objectives and milestones to be determined on an annual basis by the Board of Directors (or Compensation Committee thereof). Whether Dr. LaRosa receives an annual bonus for any given year, and the amount of any such annual bonus, will be determined in the discretion of our Board of Directors (or the Compensation Committee thereof). The agreement also provides that if Dr. LaRosa’s employment is terminated without cause, or if he resigns for good reason (each as defined in the agreement), then Dr. LaRosa will be entitled under his agreement to continue to receive his annual base salary and payment of premiums for continuation of healthcare benefits for a period of 12 months following such termination. 68 Outstanding Equity Awards at 2025 Fiscal Year-End The following table sets forth certain information concerning equity awards granted to our named executive officers that remained outstanding as of March 31, 2025. OPTIONS AWARDS Name Grant Date Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($) Option Expiration Date James B. Frakes 4/3/2020 1,75620 (1) – 102.40 4/2/2030 Chief Executive Officer and 2/10/2022 1,253 (2) 287 112.80 2/9/2032 Chief Financial Officer Steven P. LaRosa, M.D. 1/4/2021 1,512 (3) – 201.60 1/3/2031 Chief Medical Officer 2/10/2022 1,253 (4) 287 112.80 2/9/2032 Guy F. Cipriani, MBA, – – – – – Senior Vice President, Chief Operating Officer – – – – – (1) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of April 3, 2020, then monthly over the following 36 months, subject to Mr. Frakes continued service with the Company. (2) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of February 10, 2022, then monthly over the following 36 months, subject to Mr. Frakes continued service with the Company. (3) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of January 4, 2021, then monthly over the following 36 months, subject to Dr. LaRosa’s continued service with the Company. (4) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of February 10, 2022, then monthly over the following 36 months, subject to Dr. LaRosa’s continued service with the Company. (5) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of January 4, 2021, then monthly over the following 36 months, subject to Mr. Cipriani’s continued service with the Company. (6) This option is subject to vesting at a rate of 25% on the one year anniversary of the grant date of February 10, 2022, then monthly over the following 36 months, subject to Mr. Cipriani’s continued service with the Company. 69 Director Compensation for 2025 Fiscal Year The following director compensation disclosure reflects all compensation awarded to, earned by or paid to our then non-employee directors for the fiscal year ended March 31, 2025. Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Total ($) Edward G. Broenniman (2) 97,500 50,000 147,500 Nicolas Gikakis (3) 48,750 50,000 98,750 Angela Rossetti (4) 63,000 50,000 113,000 Chetan S. Shah, M.D. (5) 63,750 50,000 113,750 (1) In accordance with SEC rules, this column reflects the aggregate grant date fair value of the awards computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for stock-based compensation transactions. Assumptions used in the calculation of these amounts are included in our consolidated financial statements in this Annual Report. These amounts do not reflect the actual economic value that will be realized by our directors upon the vesting, exercise, or the sale of the shares of common stock underlying such awards. (2) In the fiscal year ended March 31, 2025, Mr. Broenniman earned $30,000 in cash compensation for his services to us as non-executive Chairman and $67,500 related to his roles as a member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and as the chair of our Audit Committee, for an aggregate amount of $97,500. Mr. Broenniman also received restricted stock units, or RSUs, valued at $50,000 for his ongoing service as a Board member pursuant to our Amended and Restated Non-Employee Director Compensation Policy, or Director Compensation Policy. (3) Mr. Gikakis served on our Audit Committee until September 30,2024. In the fiscal year ended March 31, 2025, Mr. Gikakis earned $48,750 for his roles as a director and as a member of our Audit Committee and Nominating and Corporate Governance Committee. Mr. Gikakis also received RSUs valued at $50,000 for his ongoing service as a Board member pursuant to our Director Compensation Policy. As of March 31, 2024, Mr. Gikakis had 4,885 shares of common stock subject to outstanding RSUs. (4) In the fiscal year ended March 31, 2025, Ms. Rossetti earned $63,000 for her roles as a director, a member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and as the chair of our Nominating and Corporate Governance Committee. Ms. Rossetti also received RSUs valued at $50,000 for her ongoing service as a Board member pursuant to our Director Compensation Policy. As of March 31, 2025, Ms. Rossetti had no outstanding equity awards. (5) Dr. Shah served as a member of our Audit Committee until September 15, 2023. In the fiscal year ended March 31, 2025, Dr. Shah earned $63,750 for his roles as a director, a member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee and as the chair of our Compensation Committee. Dr. Shah also received RSUs valued at $50,000 for his ongoing service as a Board member pursuant to our Director Compensation Policy. Non-Employee Director Compensation Policy We maintain the Director Compensation Policy, in which only non-employee directors may participate, pursuant to which such non-employee directors are entitled to receive cash and equity compensation for their service on the Board of Directors and its committees. Under the Director Compensation Policy in effect during the fiscal year ended March 31, 2025, a newly appointed or elected eligible director will receive an initial grant of RSUs with a grant date fair value of $75,000 or, at the discretion of our Board of Directors, options to acquire shares of common stock with a grant date fair value of $75,000, based on the average of the closing prices of our common stock for the five trading day period ending on the date of grant and will vest at a rate determined by the Board of Directors in its discretion, typically in equal quarterly installments over one year. In addition, under the Director Compensation Policy, at the beginning of each fiscal year, each continuing director eligible to participate will receive a grant of RSUs with a grant date fair value of $50,000 or, at the discretion of our Board of Directors, options to acquire shares of common stock with a grant date fair value of $50,000, based on the average of the closing prices of our common stock for the five trading day period ending on the date of grant and will vest at a rate determined by the Board of Directors in its discretion, typically in equal quarterly installments over one year . 70 Under the Director Compensation Policy in effect during the fiscal year ended March 31, 2025, in lieu of per meeting fees, eligible directors will receive an annual board retainer fee of $40,000, as well as the following annual retainer fees: Audit Committee chair - $15,000, Compensation Committee chair - $15,000, Nominating and Corporate Governance Committee chair - $8,000, Audit Committee member - $7,500 (not applicable to the chair), Compensation Committee member - $7,500 (not applicable to the chair) and Nominating Committee member - $5,000 (not applicable to the chair). Additionally, the Chairperson of the Board of Directors will receive an additional annual board retainer fee of $30,000. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth information as of March 31, 2025, with respect to the ownership of our common stock, by (i) each person known by us to be the beneficial owner of more than five percent (5%) of the outstanding shares of each class of our capital stock, (ii) each of our directors and director nominees, (iii) each of our executive officers, and (iv) all of our named executive officers and directors as a group. As of such date, we had 2,585,316 shares of our common stock issued and outstanding, after adjustment for the 1-for-8 reverse stock split effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025. We believe that each individual or entity named has sole investment and voting power with respect to shares of common stock indicated as beneficially owned by them, subject to community property laws where applicable, except where otherwise noted. Unless otherwise indicated, the address for each person listed in the table below is c/o Aethlon Medical, Inc., 11555 Sorrento Valley Road, Suite 203, San Diego, CA 92121. NAME OF BENEFICIAL OWNER NUMBER OF SHARES BENEFICIALLY OWNED(1) PERCENT OF SHARES BENEFICIALLY OWNED(2) Greater than 5% Stockholders Armistice Capital, LLC 180,758 (3) 7% Ikarian Capital, LLC 153,660 (4) 6% Directors and Named Executive Officers James B. Frakes, Chief Executive Officer, Chief Financial Officer and Director 2,805 (5) * Edward G. Broenniman, Chairman and Director 4,887 (6) * Chetan S. Shah, M.D., Director 3,923 (7) * Angela Rossetti, Director 6,208 (8) * Steven P. LaRosa, M.D., Chief Medical Officer 2,552 (9) * Nicolas Gikakis, Director 3,569 (10) – All Current Directors and Executive Officers as a Group (6 members) 23,944 9% ____________________ * Less than 1% (1) Calculated pursuant to Rule 13d-3(d)(1) of the Exchange Act. Under Rule 13d-3(d)(1), shares not outstanding that are subject to options, warrants, rights or conversion privileges exercisable by a person within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person but not deemed outstanding for the purpose of calculating the percentage owned by each other person listed. (2) Based on 2,585,316 shares of common stock outstanding as of March 31, 2025, as adjusted for the 1-for-8 reverse stock split effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025. (3) Armistice Capital, LLC ("Armistice Capital") is the investment manager of Armistice Capital Master Fund Ltd. (the "Master Fund"), the direct holder of the Shares, and pursuant to an Investment Management Agreement, Armistice Capital exercises voting and investment power over the securities of the Issuer held by the Master Fund and thus may be deemed to beneficially own the securities of the Issuer held by the Master Fund. Mr. Boyd, as the managing member of Armistice Capital, may be deemed to beneficially own the securities of the Issuer held by the Master Fund. The Master Fund specifically disclaims beneficial ownership of the securities of the Issuer directly held by it by virtue of its inability to vote or dispose of such securities as a result of its Investment Management Agreement with Armistice Capital. The Master Fund, a Cayman Islands exempted company that is an investment advisory client of Armistice Capital, has the right to receive dividends from, or the proceeds from the sale of, the reported securities. The address of the principal business office of each of the Reporting Persons is c/o Armistice Capital, LLC, 510 Madison Avenue, 7 th Floor, New York, NY 10022. 71 (4) Represents shares of common stock held by Ikarian Healthcare Master Fund, L.P., a Cayman Islands exempted limited partnership (the “Fund”) and certain separate managed account. The Fund, and certain separately managed accounts managed by Ikarian Capital (collectively, the "Managed Accounts"), are the record owners of the securities covered by this statement. Ikarian Capital is an investment adviser registered under the Investment Advisers Act of 1940, as amended, and serves as investment manager to the Fund and as sub-adviser to the Managed Accounts, and may be deemed to have beneficial ownership of the securities covered by this statement through the investment discretion it has over the Fund and the Managed Accounts. Ikarian Capital is ultimately controlled, indirectly, by Mr. Shahrestani. Accordingly, Mr. Shahrestani may be deemed to indirectly beneficially own securities beneficially owned by Ikarian Capital. The Fund disclaims beneficial ownership of the shares held by the Managed Accounts. The Managed Accounts disclaim beneficial ownership of the shares held by the Fund. The address of the principal business office of each of the Reporting Persons is c/o Ikarian Capital, LLC, 100 Crescent Court, Suite 1620, Dallas, Texas 75201. (5) Consists of (i) 30 shares of common stock and (ii) 2,805 shares subject to stock options that are currently exercisable or will be exercisable within 60 days of March 31, 2025. (6) Consist of 4,887 shares of common stock (7) Consist of 3,923 shares of common stock. (8) Consists of 6,208 shares of common stock. (9) Consists of 2,552 shares subject to stock options that are currently exercisable or will be exercisable within 60 days of March 31, 2025. (10) Consists of 3,569 shares of common stock Equity Compensation Plans The following table sets forth information, as of March 31, 2025, about our equity compensation plans in effect as of that date: Plan category (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (b) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders (2) 6,546 $ 130.52 390,950 Equity compensation plans not approved by security holders (3) – – – Totals 6,546 $ 130.52 390,950 (1) Net of equity instruments forfeited, exercised or expired. (2) Excludes RSU grants to our officers and directors during the fiscal year ended March 31, 2025, since all of the shares underlying the RSUs had been issued during that fiscal year and there were no outstanding RSUs as of March 31, 2025. (3) As of March 31, 2025, we did not have any equity compensation plans that were not approved by our stockholders. 72 Item 402(v) Pay Versus Performance We are providing the following information about the relationship between executive compensation actually paid and certain financial performance of our company as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K. The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee view the link between the Company’s performance and named executive officer (“NEO”) pay. This disclosure is intended to comply with the requirements of Item 402(v) of Regulation S-K applicable to “smaller reporting companies.” For additional information about our compensation philosophy and how we seek to align executive compensation with the Company’s performance, refer to “Executive and Director Compensation” section above. Required Tabular Disclosure of Pay Versus Performance The amounts set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the “Executive and Director Compensation” section above. With the exception of Charles J. Fisher as PEO during the 2023 fiscal year, our Chief Executive Officer is our principal executive officer and is referred to as PEO in the headers in the following tables. PAY VERSUS PERFORMANCE Fiscal Year Summary Compensation Table Total for PEO 1 (1) ($) Compensation Actually Paid to PEO 1 (2)(4) ($) Summary Compensation Table Total for PEO 2 (1) ($) Compensation Actually Paid to PEO 2 (3)(4) ($) Average Summary Compensation Table Total for Non-PEO NEOs (5) ($) Average Compensation Actually Paid to Non-PEO NEOs (6) ($) Value of Initial Fixed $100 Investment Based On Total Shareholder Return (7) ($) Net Income (Loss) (millions) (8) ($) (a) (b) (c) (b) (c) (d) (e) (f) (h) 2025 $ – $ – $ 500,000 $ 495,402 $ 430,844 $ 430,875 $ 2.45 $ (13.40 ) 2024 $ 505,332 $ 395,249 $ 416,449 $ 400,496 $ 404,032 $ 385,270 $ 8.28 $ (12.21 ) 2023 $ 460,000 $ (62,027 ) – – $ 388,750 $ 220,700 $ 18.84 $ (12.03 ) (1) The dollar amounts reported in these columns (b) are the amounts of total compensation reported for our respective PEOs for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation — Summary Compensation Table.” (2) Charles J. Fisher, Jr., M.D. served as the Company’s Chief Executive Officer for the entirety of the year fiscal year ended March 31, 2023 and through November 7, 2023, and served as the Company’s PEO for such period. (3) James B. Frakes was appointed as the Company’s Chief Executive Officer, effective November 7, 2023, and served as the Company’s PEO from such date through March 31, 2024. (4) The dollar amounts reported in columns (c) represent the amount of “compensation actually paid” to Dr. Fisher and Mr. Frakes in the periods during which they served as PEO, respectively, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our PEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the reported total compensation for our PEOs for each year to determine the compensation actually paid: 73 PEO 1 PEO 2 2025 ($) 2024 ($) 2023 ($) 2025 ($) 2024 ($) 2023 ($) Summary Compensation Table Total – 505,332 460,000 500,000 416,449 388,750 Deduct: Grant Date Fair Value of Equity Awards as reported in Summary Compensation Table (a) – – – – – Add: Fiscal Year-End Fair Value of Equity Awards Granted in the Fiscal Year – – – – – Add: Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years – – (378,862 ) (9,739 ) (128,266 ) Add: Fair Value of Equity Awards Granted in the Fiscal Year that Vested in the Fiscal Year – – – (2,465 ) – – Add: Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year – – (143,164 ) (2,133 ) (39,784 ) Deduct: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year – (110,083 ) – – – Compensation Actually Paid (b) – 395,249 (62,027 ) 495,402 400,496 220,700 (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. (b) Amount of equity award adjustments may differ from amount reported in the table above due to rounding. The fair values of stock options vested during the fiscal year or outstanding as of fiscal year end were estimated using the Black-Scholes option pricing model with the following assumptions, which may be materially different from the assumptions used for estimating the grant-date fair value as reported in the “Option Awards” columns in the Summary Compensation Table: Year Ended March 31, 2025 2024 2023 Expected term (in years) 4.45 years 4,46 years 5.20 years Expected volatility 137.13% 145.9% 138.9% Risk-free interest rate 4.07% 4.02% 2.20% Expected dividend rate 0.00% 0.00% 0.00% (5) The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding our PEOs) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs (excluding our PEO) included for purposes of calculating the average amounts in each applicable year are Dr. LaRosa and Mr. Cipriani. (6) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to our non-PEO NEOs, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the reported total compensation for each year to determine the compensation actually paid: 74 Average of Non-PEO NEOs 2025 2024 2023 Summary Compensation Table Total 437,844 404,032 388,750 Deduct: Grant Date Fair Value of Equity Awards as reported in Summary Compensation Table (a) – – – Add: Fiscal Year-End Fair Value of Equity Awards Granted in the Fiscal Year – – – Add: Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years (1,232 ) (13,524 ) (128,266 ) Add: Fair Value of Equity Awards Granted in the Fiscal Year that Vested in the Fiscal Year – – – Add: Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year (3,002 ) (5,238 ) (39,784 ) Deduct: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year (2,734 ) – – Compensation Actually Paid (b) (430,875 ) (385,270 ) (62,027 ) (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. (b) Amount of equity award adjustments may differ from amount reported in the table above due to rounding. The fair values of stock options vested during the fiscal year or outstanding as of fiscal year end were estimated using the Black-Scholes option pricing model with the following assumptions, which may be materially different from the assumptions used for estimating the grant-date fair value as reported in the “Option Awards” columns in the Summary Compensation Table: Year Ended March 31, 2025 2024 2023 Expected term (in years) 4.45 years 4.46 years 5.20 years Expected volatility 137.13% 145.9% 138.9% Risk-free interest rate 4.07% 4.02% 2.20% Expected dividend rate 0.00% 0.00% 0.00% (7) TSR is determined based on the value of an initial fixed investment of $100 on March 31, 2022. Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. (8) Net loss attributable to Aethlon as reported in the Company’s consolidated financial statements for the applicable year. 75 Required Narrative Disclosure to Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above. Compensation Actually Paid and Net Income Loss Because the Company is a pre-commercial stage company, we had no revenue during the periods presented, other than revenue associated with government contracts and grants. Consequently, we do not use net income (loss) as a performance measure in our executive compensation program. Moreover, as a pre-commercial stage company with limited revenue, we do not believe there is any meaningful relationship between our net loss and compensation actually paid to our NEOs during the periods presented. Compensation Actually Paid and Cumulative TSR The chart below shows the relationship between the compensation actually paid to our PEOs and the average compensation actually paid to our non-PEO NEOs, on the one hand, to the Company’s cumulative TSR over the three years presented in the table, on the other. All information provided above under the “Item 402(v) Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference. 76 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The following describes all transactions since April 1, 2023, and all proposed transactions, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest. In making such decisions our Audit Committee considers and approves or disapproves any related party transaction as defined under SEC Regulation Item 404, to the extent required by SEC regulations. Separation Agreement with Former CEO In connection with Charles J. Fisher, Jr. M.D.’s resignation as the Company’s Chief Executive Officer, effective November 2023, (the “Fisher Separation Date”), in accordance with the terms of his Executive Employment Agreement with the Company, dated as of October 30, 2020 (the “Fisher Employment Agreement”), and pursuant to Dr. Fisher’s Separation Agreement with the Company, effective as of November 27, 2023 (the “Fisher Separation Agreement”), the Company will provide Dr. Fisher with (1) cash severance equivalent to twelve months of Dr. Fisher’s base salary in effect as of the Separation Date, subject to standard payroll deductions and withholdings, payable over the Company’s regular payroll schedule over the twelve months following the Separation Date; (2) the accelerated vesting on fifty percent (50%) of the outstanding and unvested equity awards held by Dr. Fisher that were subject to time-based vesting as of the Fisher Separation Date, which were deemed fully vested and exercisable as of the Fisher Separation Date; and (3) reimbursement of COBRA healthcare premium costs for the same level of coverage Dr. Fisher had during his employment with the Company, until the earliest of (i) twelve months from November 27, 2023, (ii) the date Dr. Fisher becomes eligible for substantially equivalent healthcare coverage through another source, or (iii) the expiration of Dr. Fisher’s eligibility for the continuation coverage. Further, and pursuant to the Separation Agreement, Dr. Fisher provided the Company with a general release of all claims, effective November 27, 2023. Separation Agreement with Former COO Guy Cipriani’s termination as the Company’s Chief Operating Officer effective October 2024 (the “Cipriani Separation Date”), in accordance with the terms of his Executive Employment Agreement with the Company, dated as of October 30, 2020 (the “Cipriani Employment Agreement”), and pursuant to Mr. Cipriani’s Separation Agreement with the Company, effective as of October 3, 2024 (the “Cipriani Separation Agreement”), the Company will provide Mr. Cipriani with (1) cash severance equivalent to twelve months of Mr. Cipriani’s base salary in effect as of the Separation Date, subject to standard payroll deductions and withholdings, payable over the Company’s regular payroll schedule over the twelve months following the Separation Date and (2) reimbursement of COBRA healthcare premium costs for the same level of coverage Mr. Cipriani had during his employment with the Company, until the earliest of (i) twelve months from October 3, 2024, (ii) the date Mr. Cipriani becomes eligible for substantially equivalent healthcare coverage through another source, or (iii) the expiration of Mr. Cipriani’s eligibility for the continuation coverage. Further, and pursuant to the Separation Agreement, Mr. Cipriani provided the Company with a general release of all claims, effective October 3, 2024. Separation Agreement with Former CSO Lee Arnold’s termination as the Company’s Chief Science Officer effective July 1, 2024 (the “Arnold Separation Date”), in accordance with the terms of his Executive Employment Agreement with the Company, dated as of February 1, 2023 (“Arnold Employment Agreement”), and pursuant to Mr. Arnold’s Separation Agreement with the Company, effective as of July 1, 2024 (the “Arnold Separation Agreement”), the Company will provide Mr. Arnold with (1) cash severance equivalent to twelve months of Mr. Arnold’s base salary in effect as of the Arnold Separation Date, subject to standard payroll deductions and withholdings, payable over the Company’s regular payroll schedule over the twelve months following the Separation Date and (2) reimbursement of COBRA healthcare premium costs for the same level of coverage Mr. Arnold had during his employment with the Company, until the earliest of (i) twelve months from July 1, 2024, (ii) the date Mr. Arnold becomes eligible for substantially equivalent healthcare coverage through another source, or (iii) the expiration of Mr. Arnold’s eligibility for the continuation coverage. Further, and pursuant to the Arnold Separation Agreement, Mr. Arnold provided the Company with a general release of all claims, effective July 1, 2024. 77 Employment Arrangements We currently have written employment agreements with our executive officers. For information about our employment agreements with our named executive officers, refer to “Executive and Director Compensation — Employment Contracts.” Equity Awards Granted to Executive Officers and Directors We have granted stock options and RSUs to our executive officers and directors. For information about our grants of stock option awards and RSUs to our named executive officers and our directors, refer to “Executive and Director Compensation — Outstanding Equity Awards at 2024 Fiscal Year-End,” “Executive and Director Compensation — Director Compensation for 2024 Fiscal Year” and “Executive and Director Compensation — Non-Employee Director Compensation Policy.” Indemnification Agreements We have entered into and intend to continue to enter into indemnification agreements with each of our directors and our officers. The indemnification agreements, our Articles of Incorporation, as amended, and our Amended and Restated Bylaws require us to indemnify our directors and officers to the fullest extent permitted by Nevada law. Policies and Procedures for Transactions with Related Persons We maintain a written policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock and any members of the immediate family or affiliate of any of the foregoing persons are not permitted to enter into a related person transaction with us without the approval or ratification of the Audit Committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our common stock, or any member of the immediate family or affiliate of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must be presented to the Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, the Audit Committee is to consider the material facts of the transaction, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table presents fees for professional services billed by Haskell & White and Baker Tilly during the fiscal years ended March 31, 2025 and 2024: Fiscal Year 2025 Fiscal Year 2024 Audit Fees(1) $ 237,300 $ 448,810 Tax Fees(2) 17,500 40,386 Total Fees $ 254,800 $ 489,196 (1) Audit fees include fees for professional services rendered in connection with the audit of our annual financial statements for fiscal years 2025 and 2024 and for reviews of our quarterly financial statements and those services normally provided in connection with statutory or regulatory filings or engagements including comfort letters, consents and other services related to SEC matters. (2) Tax Fees include the aggregate fees billed during fiscal year 2025 for professional services for preparation of income tax returns. Policy on Audit Committee Pre-approval of Audit and Permissible Non-audit Services of Independent Auditor Our Audit Committee is responsible for pre-approving all audit, audit-related, tax and other permitted non-audit services to be performed for us by our independent auditor. The Audit Committee approved all of the services for which Baker Tilly billed us as set forth in the above table. 78 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed as part of this Annual Report: (a)(1) Financial Statements. The response to this portion of Item 15 is set forth under Part II, Item 8 above. (a)(2) Financial Statement Schedules. All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto set forth under Item 8 above. (a)(3) Exhibits required by Item 601 of Regulation S-K. Incorporated by Reference Exhibit Number Exhibit Description Form SEC File No. Exhibit No. Date Filed Herewith 3.1 Articles of Incorporation, as amended. 8-K 001-37487 3.1 September 19, 2022 3.2 Amended and Restated Bylaws of the Company. 8-K 001-37487 3.1 September 12, 2019 4.1 Form of Common Stock Certificate. S-1 333-201334 4.1 December 31, 2014 4.2 Form of Warrant to Purchase Common Stock. S-1/A 333-234712 4.14 December 11, 2019 4.3 Form of Underwriter Warrant. S-1/A 333-234712 4.15 December 11, 2019 4.4 Form of Common Stock Purchase Warrant. 8-K 001-37487 4.1 January 17, 2020 4.5 Form of Class A Warrant to Purchase Common Stock, issued on May 17, 2024. 8-K 001-37487 4.1 May 17, 2024 4.6 Form of Class B Warrant to Purchase Common Stock, issued on May 17, 2024. 8-K 001-37487 4.2 May 17, 2024 4.7 Form of Pre-Funded Warrant to Purchase Common Stock, issued on May 17, 2024. 8-K 001-37487 4.3 May 17, 2024 4.8 Form of Placement Agent Warrant to Purchase Common Stock, issued on May 17, 2024. 8-K 001-37487 4.4 May 17, 2024 4.9 Description of Aethlon Medical, Inc.’s Securities. X 4.10 F orm of New Warrant to purchase Common Stock issued on March 17, 2025 8-K 001-37487 4.1 March 17, 2025 79 Incorporated by Reference Exhibit Number Exhibit Description Form SEC File No. Exhibit No. Date Filed Herewith 10.1++ Aethlon Medical, Inc. Amended and Restated Non-Employee Director Compensation Policy, as Modified on February 10, 2022. 10-Q 001-37487 10.2 February 14, 2022 10.2++ Employment Agreement, by and between Aethlon Medical, Inc. and James Frakes, dated December 12, 2018. 10-Q 001-37487 10.3 February 11, 2019 10.3++ Amendment No. 1 to Executive Employment Agreement, effective as of November 7, 2023, by and between the Company and James B. Frakes. 8-K 001-37487 10.1 December 22, 2023 10.4++ Form of Indemnification Agreement for Officers and Directors. 10-Q 001-37487 10.4 February 11, 2019 10.5++ Form of Option Grant Agreement for Officers and Directors. 10-Q 001-37487 10.5 February 11, 2019 10.6++ Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for Directors. 10-Q 001-37487 10.6 February 11, 2019 10.7++ Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for Executives. 10-Q 001-37487 10.7 February 11, 2019 10.8 Assignment Agreement, by and between Aethlon Medical, Inc. and London Health Sciences Center Research Inc., dated November 7, 2006. S-1 001-37487 10.27 November 15, 2019 10.9++ Aethlon Medical, Inc. 2020 Equity Incentive Plan as amended,, Form of Restricted Stock Grant, Form of Option Grant and Agreement. 8-K 001-37487 10.1 October 2, 2024 10.10++ Employment Agreement between the Company and Dr. Fisher, dated October 30, 2020. 8-K 001-37487 10.2 November 3, 2020 10.11++ Separation Agreement between the Company and Dr. Fisher, effective as of November 27, 2023. 8-K 001-37487 10.1 November 27, 2023 10.12 Lease, by and between the Company and San Diego Inspire 1, LLC. and San Diego Inspire 2, LLC, effective December 7, 2020. 10-Q 001-37487 10.3 February 10, 2021 80 Incorporated by Reference Exhibit Number Exhibit Description Form SEC File No. Exhibit No. Date Filed Herewith 10.13++ Executive Employment Agreement between the Company and Guy Cipriani, dated January 1, 2021. 10-Q 001-37487 10.5 February 10, 2021 10.14++ Amendment No. 1 to Executive Employment Agreement, effective as of November 7, 2023, by and between the Company and Guy F. Cipriani. 8-K 001-3748 7 10.2 December 22, 2023 10.15++ Executive Employment Agreement between the Company and Steven P. LaRosa, MD, dated January 4, 2021. 10-Q 001-37487 10.6 February 10, 2021 10.16++ Executive Employment Agreement, by and between Aethlon Medical, Inc. and Lee D. Arnold, Ph.D., dated February 1, 2023. 10-Q 001-37487 10.1 February 13, 2023 10.17 Lease between Aethlon Medical, Inc. and San Diego Inspire 5, LLC, effective October 27, 2021. 10-Q 001-37487 10.1 November 9, 2021 10.18 At the Market Offering Agreement, dated March 24, 2022, by and between Aethlon Medical, Inc. and H.C. Wainwright & Co., LLC. 8-K 001-37487 1.1 March 24, 2022 10.19++ Amendment No. 1 to Executive Employment Agreement, by and between Aethlon Medical, Inc. and Lee D. Arnold, Ph.D., dated May 1, 2023. 10-K 001-37487 10.18 June 28, 2023 10.20 Form of Inducement Letter dated March 17, 2025 8-K 001-37487 10.1 March 17, 2025 19.1 Insider Trading Policy . X 21.1 List of Subsidiaries. X 23.1 Consent of Haskell & White LLP, Independent Registered Public Accounting Firm. X 23.2 Consent of Baker Tilly US, LLP, Independent Registered Public Accounting Firm. X 24.1 Power of Attorney (see signature page) X 31.1 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. X 32.1* 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. X 81 Incorporated by Reference Exhibit Number Exhibit Description Form SEC File No. Exhibit No. Date Filed Herewith 97.1 Incentive Compensation Recoupment Policy. X 101.INS 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) X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101) X __________________ ++ 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. ITEM 16. FORM 10-K SUMMARY None. 82 SIGNATURES Pursuant to the requirements 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 26th d ay of June, 2025. By: /s/ JAMES B. FRAKES JAMES B. FRAKES 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 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. Signature Title Date /s/ JAMES B. FRAKES Chief Executive Officer and Chief Financial Officer, June 26, 2025 James B. Frakes Principal Executive Officer, Principal Financial and Accounting Officer and Director /s/ EDWARD G. BROENNIMAN Chairman and Director June 26, 2025 Edward G. Broenniman /s/ CHETAN S. SHAH Director June 26, 2025 Chetan S. Shah, M.D. /s/ ANGELA ROSSETTI Director June 26, 2025 Angela Rossetti /s/ NICOLAS GIKAKIS Director June 26, 2025 Nicolas Gikakis 83 Page Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (Haskell & White LLP, San Diego, CA PCAOB ID No 200 ) F-2 Report of Independent Registered Public Accounting Firm (Baker Tilly, San Diego, CA PCAOB ID No 23 ) F-4 Consolidated Balance Sheets as of March 31, 2025 and 2024 F-5 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended March 31, 2025 and 2024 F-6 Consolidated Statements of Equity for the Years Ended March 31, 2025 and 2024 F-7 Consolidated Statements of Cash Flows for the Years Ended March 31, 2025 and 2024 F-8 Notes to Consolidated Financial Statements F-9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders Aethlon Medical, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Aethlon Medical, Inc. (the “Company”) as of March 31, 2025, and the related consolidated statements of operations and comprehensive loss, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2025, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements of the Company as of and for the year ended March 31, 2024 (the “fiscal 2024 consolidated financial statements”), before the effects of the retroactive adjustments described in Note 4 with respect to the one-for-eight reverse stock split effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025, and the comparative disclosures related to the adoption of updated segment reporting standards as discussed in Note 9, were audited by other auditors whose report dated June 27, 2024, expressed an unqualified opinion, with an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern on those statements. We also audited the adjustments described in Note 1 that were applied retroactively to the fiscal 2024 consolidated financial statements to reflect the June 9, 2025 one-for-eight reverse stock split, as described in in Note 4 and with respect to segment reporting in Note 9, and the related disclosures therein. In our opinion, such adjustments and related disclosures are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the fiscal 2024 consolidated financial statements of the Company other than with respect to the adjustment and disclosures referred to herein and, accordingly, we do not express an opinion or any other form of assurance on the fiscal 2024 consolidated financial statements taken as a whole. Substantial Doubt About the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to 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 to achieve its operating plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Continued) Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit 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 consolidated 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 audit, 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. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the consolidated 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 consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Haskell & White LLP HASKELL & WHITE LLP We have served as the Company’s auditor since 2024. Irvine, California June 26, 2025 F- 3 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the board of directors of Aethlon Medical, Inc.: Opinion on the Financial Statements We have audited, before the effects of the adjustments to retrospectively apply the changes in presentation of the Company’s segment disclosure described in Notes 1 and 9 and the effects of the 1-for-8 reverse stock split described in Note 4, the accompanying consolidated balance sheet of Aethlon Medical, Inc. and its subsidiary (the "Company") as of March 31, 2024, the related consolidated statements of operations and comprehensive loss, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the changes in presentation of the Company’s segment disclosure described in Notes 1 and 9 and the effects of the 1-for-8 reverse stock split described in Note 4, present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the changes in segment presentation described in Notes 1 and 9 and reverse stock split in Note 4, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. The adjustments were audited by other auditors. 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 concern. 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 These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations 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 consolidated 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 audit 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. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Baker Tilly US, LLP We served as the Company's auditor from 2001 to 2024. San Diego, California June 27, 2024 F- 4 AETHLON MEDICAL, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS March 31, 2025 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,501,261 $ 5,441,978 Deferred offering costs – 277,827 Prepaid expenses and other current assets 448,539 505,983 TOTAL CURRENT ASSETS 5,949,800 6,225,788 Property and equipment, net 676,220 1,015,229 Operating lease right-of-use asset 601,846 883,054 Patents, net 550 1,100 Restricted cash 97,813 87,506 Deposits 33,305 33,305 TOTAL ASSETS $ 7,359,534 $ 8,245,982 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 534,524 $ 777,862 Due to related parties 579,565 546,434 Operating lease liability, current portion 313,033 290,565 Other current liabilities 472,164 215,038 TOTAL CURRENT LIABILITIES 1,899,286 1,829,899 Operating lease liability, less current portion 336,718 649,751 TOTAL LIABILITIES 2,236,004 2,479,650 COMMITMENTS AND CONTINGENCIES (Note 8) – – STOCKHOLDERS’ EQUITY Common stock, $ 0.001 par value, 60,000,000 shares authorized at March 31, 2025 and 2024; 2,585,239 and 328,728 shares issued and 2,010,739 and 328,728 outstanding at March 31, 2025 and 2024, respectively 2,586 329 Additional paid-in capital 173,092,894 160,339,671 Accumulated other comprehensive loss ( 17,133 ) ( 6,940 ) Accumulated deficit ( 167,954,817 ) ( 154,566,728 ) TOTAL STOCKHOLDERS’ EQUITY 5,123,530 5,766,332 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 7,359,534 $ 8,245,982 See accompanying notes to the consolidated financial statements. F- 5 AETHLON MEDICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Years Ended March 31, 2025 2024 OPERATING COSTS AND EXPENSES Professional fees 2,224,092 3,526,926 Payroll and related expenses 3,874,092 5,206,451 General and administrative 3,243,181 3,903,191 Total operating expenses 9,341,365 12,636,568 OPERATING LOSS ( 9,341,365 ) ( 12,636,568 ) OTHER EXPENSE (INCOME), NET Interest income ( 298,122 ) ( 447,356 ) Other income ( 324,450 ) – Interest expense 10,109 – Other expense 4,659,188 18,962 Total other expense (income), net 4,046,725 ( 428,394 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS ( 13,388,089 ) ( 12,208,174 ) Basic and diluted net loss per share attributable to common stockholders $ ( 8.58 ) $ ( 38.87 ) Weighted average number of common shares outstanding - basic and diluted 1,560,839 314,097 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS ( 13,388,089 ) ( 12,208,174 ) OTHER COMPREHENSIVE LOSS ( 10,193 ) ( 799 ) COMPREHENSIVE LOSS $ ( 13,398,282 ) $ ( 12,208,973 ) See accompanying notes to the consolidated financial statements. F- 6 AETHLON MEDICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF EQUITY FOR THE YEARS ENDED MARCH 31, 2025 AND 2024 COMMON STOCK ADDITIONAL PAID IN ACCUMULATED ACCUMULATED COMPREHENSIVE TOTAL SHARES AMOUNT CAPITAL DEFICIT LOSS EQUITY BALANCE - MARCH 31, 2023 287,408 $ 288 $ 157,428,617 $ ( 142,358,554 ) $ ( 6,141 ) $ 15,064,210 Issuances of common stock for cash under at the market program, net 37,011 37 1,322,346 – – 1,322,383 Rounding for reverse split 4 – – – – – Issuance of common shares upon vesting of restricted stock units and net stock option exercises 4,305 4 ( 34,782 ) – – ( 34,778 ) Reversal of accrued commission liability – – 404,120 – – 404,120 Stock-based compensation expense – – 1,219,370 – – 1,219,370 Net loss – – – ( 12,208,174 ) – ( 12,208,174 ) Other comprehensive loss – – – ( 799 ) ( 799 ) BALANCE – MARCH 31, 2024 328,728 $ 329 $ 160,339,671 $ ( 154,566,728 ) $ ( 6,940 ) $ 5,766,332 Issuances of common stock for public offering 1,012,500 1,013 3,538,894 – – 3,539,907 Issuances of common stock for Class A and Class B warrant exercises, net 1,231,304 1,231 4,205,173 – – 4,206,404 Issuance of common shares upon vesting of restricted stock units and net stock option exercises 12,707 13 ( 18,940 ) – – ( 18,927 ) Stock-based compensation expense – – 415,234 – – 415,234 Warrant inducement expense, net – – 4,612,862 – – 4,612,862 Net loss – – – ( 13,388,089 ) – ( 13,388,089 ) Other comprehensive loss – – – – ( 10,193 ) ( 10,193 ) BALANCE – MARCH 31, 2025 2,585,239 $ 2,586 $ 173,093,894 $ ( 167,954,817 ) $ ( 17,133 ) $ 5,123,530 See accompanying notes to the consolidated financial statements. F- 7 AETHLON MEDICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED MARCH 31, 2025 AND 2024 Years Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 13,388,089 ) $ ( 12,208,174 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 339,559 359,057 Stock-based compensation 415,234 1,219,370 Loss on disposal of property, plant and equipment – 21,135 Non-cash lease expense 281,208 143 Warrant Inducement Expense 4,612,862 – Changes in operating assets and liabilities: Prepaid expenses and other current assets 113,923 ( 10,232 ) Accounts payable and other current liabilities ( 53,360 ) 156,678 Due to related parties 33,131 332,213 Net cash used in operating activities ( 7,645,532 ) ( 10,129,810 ) Cash flows from investing activities: Purchases of property and equipment – ( 250,867 ) Cash used in investing activities – ( 250,867 ) Cash flows from financing activities: Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units ( 18,927 ) ( 34,778 ) Net proceeds from the issuance of common stock 3,539,907 1,322,383 Proceeds from exercise of warrants – standard terms 2,054,940 – Proceeds from exercise of warrants – induced terms 2,316,320 – Commission paid related to warrant inducement ( 153,979 ) – Legal fees paid related to warrant inducement ( 10,877 ) – Net cash provided by financing activities 7,727,384 1,287,605 Effect of Exchange Rate on Changes on Cash ( 12,262 ) 2,107 Net increase (decrease) in cash and cash equivalents and restricted cash 69,590 ( 9,090,965 ) Cash and cash equivalents restricted cash at beginning of year 5,529,484 14,620,449 Cash and cash equivalents and restricted cash at end of year $ 5,599,074 $ 5,529,484 Supplemental information of non-cash investing and financing activities: Issuance of shares under vested restricted stock units, net stock option exercises and unvested share issuance for services $ 13 $ 35 Disposal of fully depreciated property $ 350,670 $ – Reversal of accrued commission liability (see Note 6) $ – $ 404,120 Deferred offering costs not yet paid $ – $ 219,117 Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets: Cash and cash equivalents $ 5,501,261 $ 5,441,978 Restricted cash 97,813 87,506 Cash and restricted cash $ 5,599,074 $ 5,529,484 See accompanying notes to the consolidated financial statements. F- 8 Aethlon Medical, Inc. and Subsidiary Notes to Consolidated Financial Statements 1. ORGANIZATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Aethlon Medical, Inc. (“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 with additional potential applications e in organ transplantation and other areas of significant unmet needs. In human studies, 164 sessions with 38 patients, the Hemopurifier was safely utilized and demonstrated the potential to remove life-threatening viruses. In pre-clinical studies, the Hemopurifier has demonstrated the potential to remove harmful exosomes and exosomal particles from biological fluids, utilizing its proprietary lectin-based technology. This action has potential applications in cancer, where exosomes and exosomal particles may promote immune suppression and metastasis, and in life-threatening infectious diseases. The U.S. Food and Drug Administration (“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 or exosomal particles have been shown to participate in the development or severity of the disease; and · the treatment of life-threatening viruses that are not addressed with approved therapies. Oncology We believe that 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 remove harmful extracellular vesicles 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 completed an in vitro binding study of extracellular vesicles from cancer patient samples, 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 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 Opdivo®. We have launched in an Australia safety, feasibility and dose-finding clinical trials of the Hemopurifier in cancer patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Keytruda® (pembrolizumab) or Opdivo® (nivolumab). The primary endpoint of the approximately nine to 18-patient, is safety. Exploratory analyses will be conducted to explore the number of HP treatments required to produce sustained reductions of EVs as well as improve anti-tumor T cell activity. We plan to open a similarly designed trial in India. The following three hospitals in Australia have received ethics committee approval, have gone through training on our device and are open for patient enrollment: Royal Adelaide Hospital in Adelaide, Australia and Pindara Private Hospital in the Gold Coast section of Australia and GenesisCare North Shore Hospital in Sydney, Australia. As of 16JUN2025 we have treated three participants in the first of the three treatment cohorts. Once these patients have completed the pre-specified 7-day safety follow-up period, the data will be presented to an independent Data Safety Monitoring Board (DSMB). The DSMB will provide a recommendation to Aethlon senior leadership on advancing to the next cohort where participants will receive 2 HP treatments during the one week treatment period. The Company continues to pursue approval of a similar clinical trial in India. HREC approval has previously been obtained at Medanta Medicity Hospital. Following this a meeting with Subject Expert Committee (SEC) of the India Regulatory Agency CDSCO was held 5JUN2025. We are awaiting the formal approval letter of the CDSCO. The clinical trial at Medanta can commence following a Site Initiation Visit (SIV) by the company’s India CRO, Qualtran. F- 9 Life-Threatening Viral Infections The Company also believes that the Hemopurifier can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already approved treatment. In small-scale or early feasibility human studies, the Hemopurifier has been used in the past to treat individuals infected with human immunodeficiency virus, or HIV, hepatitis-C and Ebola. Additionally, in vitro, the Hemopurifier has been demonstrated to capture Ebola, Marburg virus, Zika, Lassa, MERS-CoV, Cytomegalovirus, Epstein-Barr, Herpes simplex, Chikungunya, Dengue, West Nile, H1N1 swine flu, H5N1 bird flu, and the reconstructed 1918 Spanish flu virus. In several cases, these studies were conducted in collaboration with leading government or non-government research institutes. The Hemopurifier has previously been studied under FDA and international regulatory frameworks for the treatment of severe SARS-CoV-2 infection. While we terminated our U.S. and India-based COVID-19 studies due to low ICU patient volume and shifting priorities, these programs demonstrated real-world use of the Hemopurifier in critically ill patients. We maintain an open IDE for viral indications to preserve optionality for future outbreaks or emergent pathogens . We have sufficient inventory of Hemopurifiers to support our ongoing oncology trial in Australia as well as any near-term expansion of that study or potential trial activity in India. While we have received FDA approval to begin manufacturing at our San Diego facility under our IDE supplement, we are still awaiting FDA approval of a separate supplement to qualify an additional supplier of a key Hemopurifier component. We continue to work with the FDA on this process. Pre-Clinical Exploration of Additional Clinical Uses for the Hemopurifier The Aethlon R&D laboratory continues to explore potential new indications for the Hemopurifier. We have published in the peer-reviewed journal Transplant Immunology the ability of the device to remove extracellular vesicles and their microRNA cargo from acellular perfusates of discarded kidneys that had undergone normothermic machine perfusion. On May 12, 2025, the results of our pre-clinical ex vivo study entitled “Ex Vivo Removal of CD41 positive platelet microparticles from Plasma by a Medical Device containing a Galanthus nivalis agglutinin (GNA) affinity resin” were published in the pre-print vehicle bioRxiv. This manuscript has been submitted to a peer-reviewed publication for review. Platelet -derived extracellular vesicles (PD-EVs) are the most numerous EV population in the body and are released by platelets in response to a variety of stimuli. The cargo contained within these EVs have been noted to take part in damage to blood vessels, activation of immune cells and spread of tumor cells. Excessive levels of PD-EVs have been implicated in a myriad of diseases including cancer, lupus, systemic sclerosis, multiple sclerosis, Alzheimer’s disease, sepsis, acute and Long COVID. We hypothesized that the Aethlon Hemopurifier which contains a propriety GNA affinity resin would remove platelet derived EVs from plasma. In this experiment two hundred milliliters on donated healthy human plasma were circulated over the Aethlon Hemoupurifier (HP) to simulate a clinical HP session. The study results showed a 98.5% removal of platelet -derived EVs at a timepoint equivalent to a 4-hour HP treatment. The results of this study support the current Australian Clinical Trial in Oncology as well as open the investigation of the Hemopurifier in many indications. Extracellular vesicles have been implicated in the pathogenesis of Long COVID.As we had previously demonstrated removal of extracellular vesicles by the Hemopurifier in a patient with severe acute COVID-19 infection, we hypothesized that patients with Long COVID would have extracellular vesicles with the mannose sugar on their surface that would bind to the affinity resin in our device. We partnered with investigators at the Univ of California San Francisco Medical Center Long COVID clinic to obtain samples from participants with Long COVID as well as controls that had had COVID -10 infection but had recovered. The data to be presented will review the binding of larger and smaller extracellular vesicles to the GNA lectin and the lectin affinity resin, respectively. We believe the data from this pre-clinical study calls for additional study of the Hemopurifier and look forward to receiving feedback from the Long COVID scientific community at the Keystone Symposium. F- 10 Successful outcomes of human trials will also be required by the regulatory agencies of certain foreign countries where we plan to market and sell the Hemopurifier. Some of our patents may expire before FDA approval or approval in a foreign country, if any, is obtained. However, we believe that certain patent applications and/or other patents issued to us more recently will help protect the proprietary nature of our Hemopurifier treatment technology. We believe that the Hemopurifier may be a substantial advancement in the treatment of patients with advanced and metastatic cancer 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. 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 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. LIQUIDITY AND GOING CONCERN The Company has incurred losses since inception in devoting substantially all of its efforts toward research and development and has an accumulated deficit of $ 167,954,817 as of March 31, 2025. During the year ended March 31, 2025, the Company generated a net loss of approximately $ 13,388,000 and the Company expects that it will continue to generate operating losses for the foreseeable future. While the Company has been carrying out certain expense reductions since November 2023; our planned additional expense reductions may not materialize and/or our patient recruitment may occur more rapidly than expected along with the concomitant increases in expenses, therefore there is substantial doubt that our cash on hand will carry the company for 12 months beyond the filing date of the financial statements included in this Annual Report. 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 are issued. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of Aethlon Medical, Inc. and its wholly owned subsidiary, Aethlon Medical Australia Pty Ltd.. Operations in our Australian subsidiary is recorded in their functional currency. The results of operations for our Australian subsidiary are translated from functional currency into U.S. dollars. Expenses originally incurred in U.S. dollars are translated using the exchange rate on the transaction date. For expenses in the subsidiary’s functional currency, we use the average exchange rate for the period, as it is not practical to determine the exact rate for each transaction date. 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, 2025 and 2024, and the consolidated statement of cash flows for the fiscal years ended March 31, 2025 and 2024. RISKS AND UNCERTAINTIES We operate in an industry that is subject to intense competition, government regulation and rapid technological change. Our operations are subject to significant risk and uncertainties including financial, operational, technological, regulatory, and including the potential risk of business failure. F- 11 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 of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of expenses during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions. We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require the most difficult, subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. 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, 2025 and March 31, 2024 our cash and cash equivalents were comprised of the following instruments: Schedule of cash and cash equivalents For the year ended March 31, 2025 March 31, 2024 Cash in US bank checking account $ 282,545 $ 697,908 Cash equivalents held in US Treasury bills 5,157,887 4,736,469 Cash in Australian bank checking account 60,829 7,601 Total cash and cash equivalents $ 5,501,261 $ 5,441,978 CONCENTRATIONS OF CREDIT RISKS Cash is maintained at one US financial institution in a checking account. Accounts at this institution are secured by the Federal Deposit Insurance Corporation up to $250,000. Our March 31, 2025 cash balances were approximately $ 130,000 over such insured amount. We do not believe that the Company is exposed to any significant risk with respect to its cash in that checking account. At March 31, 2025, we maintained cash equivalents of approximately $ 5.2 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 risk. 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, 2025 Australian cash balance was below that threshold. RESTRICTED CASH To comply with the terms of our laboratory, office, and manufacturing space leases, we arranged for our former bank, First Republic Bank, to issue two standby letters of credit (L/Cs) totaling $ 87,506 in favor of the landlord, in lieu of a security deposit. To support the L/Cs, we authorized the withdrawal of $87,506 from our operating accounts and placed the funds in restricted certificates of deposit, which we classified as restricted cash, a long-term asset on our balance sheet. Following the transition of our banking relationship from First Republic Bank to JPMorgan Chase, the standby letters of credit were converted to a money market deposit account with an additional $ 5,000 buffer. This interest-bearing account had a balance of $ 97,813 as of March 31, 2025, which we continue to classify as restricted cash. F- 12 PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to five years. Repairs and maintenance are charged to expense as incurred while improvements are capitalized. Upon the sale or retirement of property and equipment, the accounts are relieved of the cost and the related accumulated depreciation with any gain or loss included in the consolidated statements of operations. INCOME TAXES 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 asset. 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, 2025 and 2024. 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, 2025 and 2024. LOSS PER SHARE 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. Diluted 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. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded as their effect would be antidilutive. As of March 31, 2025 and 2024, a total of 2,938,170 and 15,504 potential common shares, consisting of shares underlying outstanding stock options, restricted stock units, or RSUs, shares held in abeyance and warrants were excluded as their inclusion would be antidilutive. REVENUE RECOGNITION We did not recognize revenue in fiscal year ended March 31, 2025 or March 31, 2024. 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). F- 13 The following table summarizes share-based compensation expenses relating to shares and options granted and the effect on loss per common share during the years ended March 31, 2025 and 2024: Schedule of share-based compensation expenses Fiscal Years Ended March 31, 2025 March 31, 2024 Vesting of Stock Options and Restricted Stock Units $ 415,234 $ 1,219,370 Total Stock-Based Compensation Expense $ 415,234 $ 1,219,370 Weighted average number of common shares outstanding – basic and diluted 1,560,839 314,097 Basic and diluted loss per common share $ ( 0.27 ) $ ( 3.88 ) 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. We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate for all expense amortization after March 31, 2007 is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the fiscal year ended March 31, 2025 was insignificant. PATENTS Patents include both foreign and domestic patents. We capitalize the cost of patents, some of which were acquired, and amortize such costs over the shorter of the remaining legal life or their estimated economic life, upon issuance of the patent. The unamortized costs of patents are subject to our review for impairment under our long-lived asset policy above. 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. RESEARCH AND DEVELOPMENT EXPENSES Our research and development costs are expensed as incurred. We incurred approximately $ 2,212,000 and $ 2,520,000 of research and development expenses for the years ended March 31, 2025 and 2024, respectively, which are included in various operating expenses in the accompanying consolidated statements of operations. F- 14 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. SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS In fiscal year 2025, the Company adopted Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires public entities to disclose significant segment expense categories that are regularly provided to the Chief Operating Decision Maker (CODM) and included in the measure of segment profit or loss. The Company operates as a single reportable segment. The adoption of ASU 2023-07 did not impact the Company’s consolidated financial statements but resulted in enhanced footnote disclosures regarding significant segment expenses, as reflected in Note 9 – Segment Reporting. In March 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires public business entities to provide enhanced annual and interim disclosures that disaggregate specified income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is evaluating whether the adoption of this new standard will have a material impact on our disclosures . In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). ASU 2024-02 eliminates various references to the FASB’s Concepts Statements from the FASB Accounting Standards Codification in order to clarify that the Codification represents the authoritative source of generally accepted accounting principles (GAAP) in the United States. The amendments do not alter existing accounting requirements. The guidance is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024, and early adoption is permitted. This ASU is not expected to have a material impact on the Company’s consolidated financial statements or disclosures. 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. 2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The adoption of ASU No. 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. As a result, the Company did not record an allowance for expected credit losses. 2. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following: Schedule of property and equipment, net March 31, 2025 March 31, 2024 Furniture and office equipment, at cost $ 1,112,648 $ 1,112,648 Less: disposals ( 350,670 ) – Leasehold improvements 893,131 893,131 Gross property and equipment 1,655,109 2,005,779 Less: accumulated depreciation ( 978,889 ) ( 990,550 ) Fixed assets, net $ 676,220 $ 1,015,229 F- 15 Depreciation expense for the fiscal years ended March 31, 2025 and 2024 was $ 339,009 and $ 358,507 , respectively. During the year ended March 31, 2025, the Company disposed of fully depreciated property and equipment with an original cost of $ 350,670 . These disposals had no impact on net income, as the assets were fully depreciated at the time of removal. The reduction in gross property and equipment reflects the Company’s ongoing review and retirement of inactive or obsolete assets. 3. PATENTS, NET Patents, net consist of the following: Schedule of patents, net March 31, 2025 March 31, 2024 Issued patents $ 157,442 $ 157,442 Accumulated amortization ( 156,892 ) ( 156,342 ) Patents, net $ 550 $ 1,100 Amortization expense for our capitalized issued patents for each of the fiscal years ended March 31, 2025 and 2024 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 1.0 year. 4. EQUITY TRANSACTIONS REVERSE STOCK SPLIT Effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025, we effected a 1-for-8 reverse stock split of our then outstanding shares of common stock. Accordingly, each 8 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, 2023. All shares and per share amounts have been revised accordingly. WARRANT INDUCEMENT In March 2025, the Company entered into a warrant inducement agreement resulting in the issuance of 1,550,000 new warrants and the modification of 775,000 existing warrants. The fair value of the new warrants and the incremental fair value from the modification totaled $ 4,612,862 which was recorded as a non-cash inducement expense in other expense and reflected as an increase to additional paid-in capital. ISSUANCES OF COMMON STOCK AND WARRANTS Equity Transactions in the Fiscal Year Ended March 31, 2025. March 2025 Warrant-Based Financing On March 16, 2025, the Company entered into an inducement offer to exercise existing Class A and Class B Warrants (the “Agreement”) with a certain accredited and institutional holder (the “Holder”) of the Company’s outstanding Class A and Class B Warrants issued on May 17, 2024 (the “Existing Warrants”). Pursuant to the Agreement, the Holder, upon exercise, will receive a new unregistered Common Stock Purchase Warrant (“New Warrant”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), to purchase up to a number of shares equal to 200% of the number of Warrant Shares issued pursuant to the exercise of Existing Warrants pursuant to this Agreement (the “New Warrant Shares”), which New Warrant shall have an exercise price per share equal to $0.3736, subject to adjustment as provided in the New Warrant, will be exercisable at any time on or after six (6) months from the date of issuance and have a term of exercise of five and one-half (5.5) years from the date of issuance and (ii) a reduction of the exercise price of the Existing Warrants to $0.3736 per share, representing the closing price on March 14, 2025, but only with respect to a cash exercise under the Existing Warrants (as reduced from the current respective exercise price per share as set forth in the Existing Warrants). F- 16 The closing took place on March 17, 2025. Gross proceeds to the Company from the exercise of the Existing Warrants was $ 2,316,320 , prior to deducting closing costs and placement agent fees as further described below. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes. As a result of the Holder exercising the Existing Warrants, the Company issued an aggregate of 6,200,000 shares of its common stock. The shares underlying the Existing Warrants have all been registered on Form S-1 registration statement (Registration Number 333-278188). The Company agreed to file a resale registration statement registering the shares underlying the Replacement Warrants (“Resale Registration Statement”) within ninety (90) days of the date of the Agreement and to use commercially reasonable best efforts to cause the Resale Registration Statement to be effective on or prior to the 150th calendar day after the date of the Agreement. Subject to the terms of the Agreement, the Company will be required to pay certain liquidated damages if the shares underlying the New Warrants are not filed within the ninety (90) period, as more fully described in the Agreement. The Company further agreed that until sixty (60) days after the closing date of the warrant exercise, it will not (other than in connection with limited enumerated exceptions) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or common stock equivalents or file any registration statement or any amendment or supplement (other than the registration statement registering the shares underlying the Replacement Warrants). In connection with the transactions contemplated in the Agreement, the Company agreed to pay its placement agent, Maxim Group, LLC (the “Agent”) the following compensation, (i) a cash fee equal to 6.0% of the gross proceeds received by the Company in the transactions contemplated by the Agreement, and (ii) legal fees and out-of-pocket expenses of $ 15,000 . May 2024 Public Offering On May 17, 2024, the Company closed a public offering pursuant to which it sold an aggregate of: (i) 306,250 shares of common stock and accompanying Class A warrants to purchase up to 306,250 shares of common stock and Class B warrants to purchase up to 306,250 shares of common stock, at a combined public offering price of $ 4.64 per share and accompanying warrants; and (ii) in lieu of common stock, pre-funded warrants to purchase 706,250 shares of common stock and accompanying Class A warrants to purchase up to 706,250 shares of common stock and Class B warrants to purchase up to 706,250 shares of common stock, at a combined public offering price of $0.4.63 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. All pre-funded warrants issued in the offering were exercised in the quarter ended June 30, 2024. The Class A and Class B warrants each have an exercise price of $ 4.64 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 (“Maxim”), served as the exclusive placement agent in connection with the offering. We paid Maxim a cash fee of 6.5% of the aggregate gross proceeds raised at the closing of the offering, and reimbursement of certain expenses and legal fees in the amount of $ 100,000 . We also issued to designees of Maxim warrants to purchase up to an aggregate of 40,500 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $ 4.64 per share and have substantially the same terms as the Class A warrants, except the Placement Agent Warrants are not subject to an exercise price reset, are non-exercisable until November 15, 2024, and will expire on May 15, 2029 . The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses, were approximately $ 4.7 million. Net proceeds, of the offering, after deducting the placement agent fees and expenses and other offering expenses payable by us, were are approximately $ 3.5 million. In June 2024, and holders of Class A and Class B warrants exercised 37,500 shares and 360,000 shares, respectively, for additional proceeds of $ 1,844,400 . The shares of Common Stock, the Class A and Class B warrants, the pre-funded warrants and the Placement Agent Warrants described above and the underlying shares of Common Stock were offered pursuant to a Registration Statement on Form S-1, as amended (File No. 333-278188) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission (the “SEC”) on May 15, 2024 F- 17 RSU Grants to Non-Employee Directors In April 2024, 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 $12.16 per share for the April 2024 RSU grants. As a result, in April 2024 the four eligible directors were each granted an RSU in the amount of 4,112 shares under the 2020 Plan. The RSUs are subject to vesting in four equal installments, with 25% of the restricted stock units vesting on each of June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025, subject in each case to the director’s Continuous Service (as defined in the 2020 Plan), through such dates. Vesting will terminate upon the director’s termination of Continuous Service prior to any vesting date. There were no vested RSUs outstanding as of March 31, 2025. Equity Transactions in the Fiscal Year Ended March 31, 2024. 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, 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. The underlying shelf registration statement on Form S-3 expired in October 2024. As a result, we were no longer eligible to sell shares under the 2022 ATM Agreement, which we subsequently terminated following the expiration 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 of $ 1,322,383 net of $ 34,118 in commissions to Wainwright and $ 8,202 in other offering expense, through the sale of 37,011 shares of our common stock at an average price of $ 35.76 per share under the 2022 ATM Agreement. . F- 18 RSU Grants to Non-Employee Directors In April 2024, 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 $34.40 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 1,454 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 611 shares of common stock were outstanding as of March 31, 2024. WARRANTS: During the twelve-months ended March 31, 2025, we issued 2,065,500 warrants in connection with the May, 2024 public offering and 1,550,000 in connection with a March 2025 warrant inducement. We did not issue any warrants during the fiscal year ended March 31, 2024. A summary of the aggregate warrant activity for the years ended March 31, 2025 and 2024 is presented below: Schedule of warrant activity Fiscal Year Ended March 31, 2025 2024 Warrants Weighted Average Exercise Price Warrants Weighted Average Exercise Price Outstanding, beginning of year 4,090 $ 20.09 4,090 $ 20.09 Granted 3,615,500 $ 3.58 – $ N/A Exercised ( 1,231,305 ) $ 3.92 – $ N/A Cancelled/Forfeited ( 31,161 ) $ 25.13 – $ N/A Outstanding, end of year 2,357,124 $ 3.55 4,090 $ 20.09 Exercisable, end of year 2,357,124 $ 3.55 4,090 $ 20.09 Weighted average estimated fair value of warrants granted $ N/A $ N/A The detail of the warrants outstanding and exercisable as of March 31, 2025 is as follows: Schedule of warrant activity exercisable and outstanding Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Outstanding Weighted Average Exercise Price $4.64 or Below 2,357,124 4.63 $ 3.55 2,357,124 $ 3.55 The detail of the warrants outstanding and exercisable as of March 31, 2024 is as follows: Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Outstanding Weighted Average Exercise Price $150.00 or Below 2,531 0.71 $ 125.28 2,531 $ 125.28 $200.00 - $220.00 1,559 0.81 $ 218.24 1,559 $ 218.24 4,090 4,090 F- 19 STOCK-BASED COMPENSATION: 2020 EQUITY INCENTIVE PLAN The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by our stockholders in September 2020 to provide stock-based incentives to attract, retain, and motivate employees, directors, and consultants. The plan initially authorized 21,023 shares of common stock for issuance through stock options, restricted stock units (RSUs), stock bonuses, stock appreciation rights, and other awards. Stockholders approved increases to the share reserve in September 2022 and September 2024, authorizing an additional 22,500 and 375,000 shares, respectively. As of March 31, 2025, 390,950 shares remained available for issuance under the 2020 Plan . NON-EMPLOYEE DIRECTOR COMPENSATION POLICY 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 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, 2025—RSU Grants to Non-Employee Directors" for disclosure regarding equity awards under the Director Compensation Policy during the fiscal year ended March 31, 2025. STOCK OPTION ACTIVITY During the fiscal years ended March 31, 2025 and March 31, 2024, we did not issue stock option grants. Options outstanding that were vested as of March 31, 2025 and options that are expected to vest subsequent to March 31, 2025 are as follows: Schedule of options outstanding that have vested and are expected to vest Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Vested 5,795 $ 132.82 6.02 Expected to vest 751 $ 112.80 6.87 Total 6,546 The following is a summary of the stock options outstanding at March 31, 2025 and 2024 and the changes during the years then ended: Schedule of stock option activity Fiscal Year Ended March 31, 2025 2024 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Outstanding, beginning of year 10,816 $ 146.22 21,491 $ 180.93 Granted – $ – – $ – Cancelled/Forfeited ( 4,270 ) $ 170.29 ( 10,675 ) $ 215.12 Outstanding, end of year 6,546 $ 130.52 10,816 $ 146.22 Exercisable, end of year 5,795 $ 132.82 7,236 $ 159.13 Weighted average estimated fair value of options granted $ N/A $ N/A F- 20 Effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025, the Company effected a 1-for-8 reverse stock split of its common stock. All option share figures, including those for prior periods, have been adjusted retrospectively to reflect the reverse split. Option balances may not tie exactly to prior period filings due to rounding of fractional shar es. There were no stock option grants during the fiscal years ended March 31, 2025 or March 31, 2024. There were 16,448 RSUs granted during the fiscal year ended March 31, 2025. The weighted average grant date fair value of RSUs granted during the fiscal year ended March 31, 2025 was $ 50,000 . There were no stock option exercises during the fiscal years ended March 31, 2025 and 2024. The table below summarizes nonvested stock options as of March 31, 2025 and changes during the year ended March 31, 2025. Schedule of nonvested shares Shares Weighted Average Grant Date Fair Value Nonvested stock options at April 1, 2024 3,580 $ 120.13 Vested ( 1,628 ) $ 138.95 Forfeited ( 1,201 ) $ 99.19 Nonvested stock options at March 31, 2025 751 The detail of the options outstanding and exercisable as of March 31, 2025 is as follows: Schedule of detail of options outstanding and exercisable by exercise price Options Outstanding Options Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Outstanding Weighted Average Exercise Price $102.40-112.8 5,034 6.22 years $ 109.17 4,283 $ 108.54 $201.6 1,512 5.76 years $ 201.60 1,512 $ 201.60 Total 6,546 5,795 We recorded stock-based compensation expense related to RSU issuances and to options granted totaling $ 415,234 and $ 1,219,370 for the fiscal years ended March 31, 2025 and 2024, respectively. These expenses were recorded as stock compensation included in payroll and related expenses in the accompanying consolidated statement of operations for the years ended March 31, 2025 and 2024. The table below presents a summary of restricted stock unit activity as of March 31, 2025, and for the year then ended. Schedule of RSUs Shares Nonvested RSUs at April 1, 2024 611 Granted 16,448 Vested ( 12,707 ) Tax withholding payments or tax equivalent payments for net share settlement of restricted stock units ( 4,352 ) Nonvested RSUs at March 31, 2025 – Our total stock-based compensation for fiscal years ended March 31, 2025 and 2024 included the following: Schedule of stock-based compensation Fiscal Year Ended March 31, 2025 March 31, 2024 Vesting of restricted stock units $ 218,750 $ 206,250 Vesting of stock options 196,484 1,013,120 Total Stock-Based Compensation $ 415,234 $ 1,219,370 F- 21 We review share-based compensation on a quarterly basis for changes to the estimate of expected award forfeitures based on actual forfeiture experience. The cumulative effect of adjusting the forfeiture rate for all expense amortization is recognized in the period the forfeiture estimate is changed. The effect of forfeiture adjustments for the fiscal year ended March 31, 2025 was insignificant. On March 31, 2025, our outstanding stock options had no intrinsic value since the closing price on that date of $ 2.86 per share was below the weighted average exercise price of our outstanding stock options. At March 31, 2025, there was $ 78,548 of unrecognized compensation cost related to share-based payments, which is expected to be recognized over a weighted average period of 0.875 years. 5. RELATED PARTY TRANSACTIONS DUE TO RELATED PARTIES For the fiscal year ended March 31, 2025 we accrued unpaid fees of $ 68,250 owed to our non-employee directors. As a result of entering into separation agreements with two former executives, we paid out accrued vacation totaling $ 27,126 during the fiscal year ended March 31, 2025. These amounts were previously recorded in the "due to related parties" account. In addition, pursuant to the terms of their respective Executive Employment Agreements, we accrued a total of $ 809,782 for cash severance and COBRA payments, which are payable monthly over 12-month periods beginning on July 1, 2024, and October 15, 2024, respectively. Separately, in connection with a reduction in force in August 2024, we paid out an additional $ 13,419 in accrued vacation, which was also previously recorded in the "due to related parties" account. Amounts due to related parties were comprised of the following items: Schedule of amounts due to related parties March 31, 2025 March 31, 2024 Accrued Board fees $ 68,250 $ 68,250 Accrued vacation to all employees 165,029 167,973 Accrued separation expenses 346,286 310,211 Total due to related parties $ 579,565 $ 546,434 6. OTHER CURRENT LIABILITIES Other current liabilities were comprised of the following items: Schedule of other current liabilities March 31, 2025 March 31, 2024 D&O insurance premium financing (See Note 8) $ 178,206 – Accrued professional fees 247,631 $ 215,038 Accrued resale registration 46,327 – Total other current liabilities $ 472,164 $ 215,038 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. F- 22 7. INCOME TAXES For the years ended March 31, 2025 and 2024, we had no income tax expense due to our net operating losses and 100% deferred tax asset valuation allowance. At March 31, 2025 and 2024, 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, 2025 and 2024 are shown below: Schedule of deferred tax assets YEAR ENDED MARCH 31, 2025 2024 Deferred tax assets: Research and development credit carryforwards $ 3,442,000 $ 3,442,000 Capitalized research and development costs 519,000 646,000 Net operating loss carryforwards (1) 30,022,000 26,927,000 Stock compensation 415,000 2,244,000 Total deferred tax assets 34,398,000 33,259,000 Total deferred tax liabilities – – Net deferred tax assets 34,398,000 33,259,000 Valuation allowance for deferred tax assets ( 34,398,000 ) ( 33,259,000 ) Net deferred tax assets $ – $ – ______________ (1) 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, 2025, we had tax net operating loss carryforwards for federal and state purposes approximating $ 97 million and $ 91 million, respectively, portions of which began to expire in the year 2021. 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, 2025 and 2024 due to the following: Schedule of provision for income taxes 2025 2024 Income taxes (benefit) at federal statutory rate of 21.00% $ ( 2,811,000 ) $ ( 2,564,000 ) Tax effect on non-deductible expenses and credits 1,000 2,000 True up items 132,000 ( 29,000 ) Expiration of net operating loss carryforwards (1) 204,000 204,000 Change in valuation allowance 2,474,000 2,387,000 Income Tax Expense (Benefit) $ – $ – ______________ (1) Pursuant to Internal Revenue Code Section 382, use of our tax net operating loss carryforwards may be limited. F- 23 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 a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. During the years ended March 31, 2025 and 2024, we did not recognize any interest or penalties relating to tax matters. At and for the years ended March 31, 2025 and 2024, management does not believe the Company has any uncertain tax positions. Accordingly, there are no unrecognized tax benefits at March 31, 2025 or March 31, 2024. 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. 8. 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, 2025: 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, Suite 203, San Diego, California 92121 and 11575 Sorrento Valley Road, Suite 200, San Diego, California 92121, respectively. The agreement carries a term of 63 months and we took possession of the office space effective October 1, 2021. We took possession of the laboratory space effective January 1, 2022. In October 2021, we entered into another lease for approximately 2,655 square feet of space to house our manufacturing operations located at 11588 Sorrento Valley Road, San Diego, California 92121. The term is for 55 months and we took possession of the manufacturing space in August 2022. The current monthly base rent under the office and laboratory component of the lease is $ 14,590 . The current monthly base rent under the manufacturing component of the lease is $ 12,824 . The office, lab and manufacturing leases are coterminous with a remaining term of 24 months. The weighted average discount rate is 4.25 %. As of March 31, 2025, we have right-of-use lease assets of $ 601,846 . The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next two fiscal years. All of our leases conterminously expire during the fiscal year ending March 31, 2027. Schedule of lease maturity Fiscal Years Ended March 31, 2026 $ 333,462 2027 343,353 Total minimum lease payments 676,815 Less amount representing imputed interest ( 27,064 ) Present value of minimum lease payments $ 649,751 Overall, our rent expense, which is included in general and administrative expenses, approximated $ 421,789 and $ 420,353 for the fiscal years ended March 31, 2025 and 2024, respectively. F- 24 Premium Financing Agreement In January 2025, the Company entered into a short-term premium financing agreement with FIRST Insurance Funding, a division of Lake Forest Bank & Trust Company, N.A., to finance a portion of its Directors & Officers (D&O) and other insurance premiums. The total amount financed under the agreement was approximately $ 220,984 , with an associated finance charge of approximately $ 9,995 , resulting in a total repayment obligation of approximately $ 230,979 .30. The annual percentage rate is 9.75%, and the loan is payable in 10 monthly installments of approximately $23,097.93 beginning February 28, 2025. As collateral for the financing, the Company granted the lender a first priority security interest in the financed insurance policies, including all unearned premiums, dividends, credits, and certain loss payments. In the event of default, cancellation, or early termination of the policies, the lender has the right to collect any unearned premiums and apply them against the remaining loan balance. This arrangement is classified as a short-term liability within other liabilities on the balance sheet (See Note 6) and is recorded net of any prepaid portions of the insurance policies. LEGAL MATTERS 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 and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from selling one or more 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. 9. SEGMENT REPORTING The Company operates as a single operating and reportable segment, which reflects the manner in which the Chief Operating Decision Maker (CODM), the Company’s Chief Executive Officer, manages the business and allocates resources. The Company is a development-stage medical technology company focused on advancing a clinical-stage therapeutic device, with key operational decisions based on cash availability, development milestones, and return on investment associated with future manufacturing and commercialization opportunities. Although the Company has no commercial revenue, the CODM regularly reviews certain expense categories and cash flow metrics to assess progress and allocate resources. The primary internal measure of performance used by the CODM is cash used in operating activities, rather than traditional profit or loss measures. In accordance with ASU 2023-07, which the Company adopted for the year ended March 31, 2025, the following significant expense categories and internal performance measures were reviewed by the CODM during the fiscal year ended March 31, 2025 and March 31, 2024: Schedule of significant expense categories Category Year Ended March 31, 2025 Year Ended March 31, 2024 Research and development 1 $ 2,212,000 $ 2,520,000 General and administrative 2 $ 3,243,000 $ 3,903,000 Cash used in operating activities 3 $ 7,646,000 $ 10,130,000 1 Research and development expenses consist primarily of costs related to laboratory operations, clinical trial execution, investigational device testing, design iterations, and personnel-related expenses associated with research activities. These costs are not confined to a single financial statement line item and may be classified within general and administrative expense, professional fees, or payroll, depending on their nature. These expenses are regularly reviewed by the CODM as a single category for internal decision-making purposes. 2 General and administrative expense includes overhead, clinical trial-related administrative and planning costs, and manufacturing-related costs such as raw materials. These are not separately reviewed by the CODM and are assessed as part of the broader G&A category for decision-making purposes. 3 Cash used in operating activities is a key metric monitored by the CODM in evaluating resource needs, development pacing, and investment feasibility in the absence of revenue. F- 25 The Company does not allocate assets by segment, and the CODM does not use a measure of segment profit or loss to evaluate performance. There were no changes to the internal reports provided to or reviewed by the CODM during the years presented. Entity-Wide Information: · The Company did not recognize revenue during the fiscal year ended March 31, 2025. · All long-lived assets are located in the United States. · A significant portion of clinical trial activity is conducted through the Company’s wholly owned subsidiary based in Australia. 10. SUBSEQUENT EVENTS On June 25, 2025, the Company received notice from Nasdaq stating the Company has regained compliance with Listing Rule 5550(a)(2), and that the matter is now closed. Reverse Split – Following the approval of a reverse stock split at a Special Meeting of Stockholders on May 13, 2025, our Board of Directors approved a 1-for-8 reverse stock split or our outstanding shares of Common Stock, effective as of the close of business on June 6, 2025 with an effective trading date of June 9, 2025. Accordingly, each 8 shares of outstanding common stock held by stockholders were combined into one share of common stock. Our authorized common stock remained at 60,000,000 shares following the stock split. We issued an additional 77 shares as a result of rounding up fractional shares related to the reverse stock split. On June 2 and June 16, 2025, the second and third patients, respectively, were treated with the Aethlon Hemopurifier at GenesisCare North Shore in Sydney, Australia. Each patient underwent a single 4-hour treatment session and tolerated the procedure without complications. Follow-up visits will include safety assessments, extracellular vesicle (EV) and T cell measurements, as well as imaging to evaluate clinical response . RSU Grants In April 2025, our Board of Directors approved, pursuant to the terms of the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the four non-employee directors of the Company then serving on the Board of Directors. The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board of Directors, and for a grant of stock options or $75,000 worth of RSUs for a newly elected non-employee director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $2.80 per share for the RSUs granted in April 2025. As a result, in April 2025 the four eligible directors were each granted an RSU in the amount of 17,858 shares under the Company’s 2020 Equity Incentive Plan, or 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, 2025, September 30, 2025, December 31, 2025, and March 31, 2026, 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. F- 26