Title

Presentation

Aethlon Medical, Inc. beats earnings expectations. Reported EPS is $-0.40074, expectations were $-0.98.

Operator: Good afternoon, and welcome to the Aethlon Medical Fourth Quarter Fiscal 2025 Earnings and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jim Frakes, Chief Executive Officer and Chief Financial Officer. Please go ahead.

James B. Frakes: Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical’s Fiscal Fourth Quarter 2025 Earnings Conference Call. My name is Jim Frakes, and I am the Chief Executive Officer and Chief Financial Officer of Aethlon Medical. Now I have some bad news and some good news to report on this call. The bad news is since Dr. Steven LaRosa, our Chief Medical Officer, is out on a family vacation, you’ll have to listen to my soliloquy throughout this call. But the good news is that we made more progress advancing in the clinic with our product this period than in any quarter since I’ve been with Aethlon. At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal fourth quarter ended March 31, 2025.

If you have not seen or received Aethlon Medical’s earnings release, please visit the Investors page at www.aethlonmedical.com to view it. Following this introduction and the reading of the company’s forward-looking statement disclaimer, I will provide an overview of our strategy and recent developments. I will then make some brief remarks on Aethlon’s financials. We will then open up the call for the Q&A session. Before we start the business portion of the call, please note that this news release — the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement.

These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties, and actual results may differ materially from the results anticipated in the forward-looking statements. Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption Risk Factors in the company’s annual report on Form 10-K for the fiscal year ended March 31, 2025, the company’s most recent quarterly report on Form 10-Q and in the company’s other filings with the Securities and Exchange Commission. Except as may be required by law, the company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances.

With that, we will now cover the business portion update of this call. Let me start by highlighting some key developments from fiscal year-end 2025 through today. We treated the first 3 patients in our oncology trial using the Hemopurifier at clinical sites in Australia. We received regulatory approval in India to initiate a similar oncology study. We expanded our trial protocol to align with evolving standard of care in immunotherapy. Our preclinical data demonstrate 98.5% removal of platelet-derived extracellular vesicles or EVs in simulated Hemopurifier treatments. We’re collaborating with University of California, San Francisco or UCSF on long COVID research with findings to be presented at the upcoming Keystone Symposium. And importantly, we significantly reduced our operating expenses through streamlined operations.

Now let me go into more detail on a few of these items, starting with the progress in our cancer trial in Australia. We’ve completed Hemopurifier treatments in the first 3 participants enrolled in our safety, feasibility and dose finding study of patients with solid tumors unresponsive to anti-PD-1 agents. Participant #1 was treated at Royal Adelaide Hospital in January 2025, while participants #2 and #3 received treatment at Royal North Shore Hospital in Sydney in June 2025. Each participant received a single 4-hour Hemopurifier treatment without device deficiencies or immediate complications and have now completed the prespecified 7-day safety follow-up. This milestone triggers the first meeting of an independent Data Safety Monitoring Board, or DSMB, which will review safety data and determine whether we can advance to the next treatment cohort.

If we get the go-ahead, the next group of patients will receive 2 Hemopurifier treatments over the course of a 1-week period. We expect to receive preliminary data from the first cohort in about 3 months. This will include insights into how the Hemopurifier affected EV levels and antitumor T cell activity. I, like all of you, I’m anxious to learn what the effects of our product are on EV removal and antitumor T cell activity from these cancer patients that were treated with our Hemopurifier. We also amended the trial protocol to allow enrollment of patients receiving combination therapies with either pembrolizumab better known as KEYTRUDA or nivolumab marketed as OPDIVO. That change reflects current treatment practices and should help us reach a broader patient pool.

To put it in perspective, only about 30% of patients respond to these therapies long term. Tumor-derived EVs are thought to play a role in resistance to these treatments. The Hemopurifier is designed to bind and remove these EVs from the bloodstream, potentially improving the therapeutic response rates to anti-PD-1 antibodies. In our preclinical studies, we’ve already seen the Hemopurifier reduce the number of EV levels in plasma samples from cancer patients. But just to reiterate, the primary endpoint of this study is safety. We’re monitoring for any adverse events and clinically significant changes in lab tests following the Hemopurifier treatments. The study is designed to include between 9 to 18 participants and the patients will receive between 1 and 3 Hemopurifier treatments depending on the cohort.

We are also conducting exploratory analysis to understand how the number of Hemopurifier treatments impact EV levels and whether lowering EVs might help improve the body’s own natural ability to attack tumor cells. Those insights may help us shape the design of future clinical trials, including a potential premarket approval study. Turning to activities in India. On June 19, we received formal approval from India’s Central Drugs Standard Control Organization, or CDSCO, India’s regulatory authority to begin a similar oncology study at Medanta Medicity Hospital. That approval followed a successful meeting with a Subject Expert Committee and prior Ethics Committee clearance. The trial will begin following a site initiation visit conducted by our India-based CRO, Qualtran.

I’d also like to share a quick update from our research lab. On May 12, we published results of a preclinical ex vivo study in bioRxIV, and we have submitted a manuscript to a peer-reviewed journal for publication. In that study, we showed that the Hemopurifier using our proprietary GNA affinity resin removed 98.5% of platelet-derived extracellular vesicles or PD-EVs from human plasma during a time point equivalent to a 4-hour Hemopurifier treatment. Excessive levels of PD-EVs have been implicated in many serious conditions beyond cancer, including lupus, systemic sclerosis, multiple sclerosis, Alzheimer’s disease, sepsis and both acute and long COVID. These results reinforce the rationale behind our current oncology work and point to possible additional therapeutic applications in the future.

Next, I’d like to make a few remarks about our scientific collaboration in long COVID research. Our collaboration with the UCSF Long COVID clinic has been accepted for a poster presentation at the Keystone Symposium on Long COVID this August, specifically August 10 through 13. The study analyzed blood samples from patients with long COVID and compared them to recovered individuals to evaluate the binding of larger and smaller EVs to our lectin affinity resin. These findings add to our growing body of evidence and support future exploration — further exploration of the Hemopurifier in addressing the significant and still unmet medical need, impacting an estimated 44 million to 48 million people in the U.S., with an estimated economic burden in the billions in those with symptoms lasting for at least a year.

Finally, I want to highlight the work we did this past year to streamline our operations and significantly reduce our operating costs. This wasn’t just about tightening the belt. It was about focusing our resources where they have the greatest clinical and regulatory impact. So in summary, I’ve worked at Aethlon Medical for a long time, and I’ve never seen this much forward progress in the clinic and in the lab since I joined the company. I’m very pleased with the progress. Now let’s touch briefly on the financials. As of March 31, 2025, we had a cash balance of approximately $5.5 million. Our operating expenses for the year came in at approximately $9.3 million. This was a reduction of approximately $3.3 million or 26% compared to the prior year.

This decrease was largely due to lower payroll and related expenses as well as reductions in professional fees and general and administrative expenses. We did record a noncash charge that impacted the income statement. Most notably, we recognized a $4.6 million noncash charge related to a warrant inducement offer that we made in March 2025. We raised approximately $2.3 million in cash through this warrant inducement offer. This involved temporarily lowering the exercise price of existing warrants and the issuance of new warrants. Because it was a noncash charge, it did not impact the net worth on our balance sheet. For those that wanted to take a deeper dive into the numbers, please refer to the earnings release that we just issued or the full 10- K annual report that we will issue following this call.

Also, we recognized approximately $324,000 in other income related to the employee retention tax credit under the CARES Act and an additional $36,000 in related interest income from the IRS. The remaining expected credit was recorded as a receivable within current assets on our balance sheet. No such amounts were recorded in the prior fiscal year. We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for March 31, 2025, and the statements of operations for the fiscal years ended March 31, 2025 and 2024. As I mentioned earlier, we will file our annual report on Form 10-K following this call. Our next earnings call for the fiscal first quarter ending June 30, 2025, will coincide with the filing of our quarterly report on Form 10-Q in August 2025.

And now I’d be happy to answer any questions that you may have. Operator, please open the call for questions.

Operator: [Operator Instructions] Our first question is from Marla Marin with Zacks.

Marla Marin: So there’s a lot going on. Given that the company is involved now in conducting ongoing clinical study in Australia upcoming in India, the long COVID initiative, is it still right to think that the focus areas remain oncology, number one, followed by infectious disease or/long COVID and then potentially organ transplantation?

James B. Frakes: Marla, this is Jim. Our focus remains almost entirely on oncology. The upcoming trial in India is virtually parallel to the Australian trial. So we already have Hemopurifier stationed at the hospital, the PI is an expert using the Hemopurifier. So that remains our primary focus. We took advantage of the relationship with UC San Francisco’s Long COVID unit to obtain some precious but free samples that we analyzed once we were set up for the oncology trial. So that’s a cost-effective area that’s potentially very valuable, but it’s early. We’re going to present at that conference in August. And if there’s a possible grant situation, we’ll pursue that. But our main focus remains oncology.

Marla Marin: Okay. And when you say it’s cost efficient, so there wasn’t significant, if any, capital outlay in order to conduct the collaboration, and there is some potential for incoming nondilutive funds. Is that the right way to think about that?

James B. Frakes: If we can land such a nondilutive grant or contract with the government, it’s still very early, Marla. We’re presenting some early data, it looks interesting, but we would have a lot of work to do. So I don’t want to overplay that. We were — our history is in viruses. If there’s another situation where we can help, we’ll be poised to do that. But I don’t want to understate how much we’re focused on oncology. It remains our primary.

Marla Marin: Right. Okay. And then one follow-up on that and then one other last question. So with the first 3 patients having been treated in Australia, could you please remind us again of — and you might have already said this in your prepared remarks, if you did, I apologize, but could you remind us what the expected time line is before you deliver some more robust data?

James B. Frakes: Well, once — there’s an electronic data equivalent of the clipboard that used to be on patients’ beds in the old days. Once that is finalized and the PIs have signed off on it, they’ll be presented to the Data Safety Monitoring Committee. There’s a tentative meeting set up in July. If they like everything, they’re going to give us a green light to proceed to the next cohort, which will be 2 treatments per week. And at the same time, the blood samples that we’ve taken during the treatments and then afterwards have been sent by those hospitals to our lab at University of Sydney, and they’ll measure the changes in EVs and T cells. And we expect to receive that data later on in the summer. As I mentioned in my remarks, I can’t wait. I don’t know what they’ll be. Hopefully, good, but we’ve been waiting to see that kind of information for a long time as our shareholders.

Marla Marin: Right. And then finally, my last question is, you talked about in the press release about some nonrecurring costs that were incurred in connection with the former — some former executives. So should we be thinking that the nonrecurring expenses are for the time being are finished. We won’t be seeing additional one-off costs?

James B. Frakes: So we terminated 3 senior executives over like a year. And the former CEO, that ended — there was a 1-year payout for each of those. His ended in November of 2024. The second one ended — will end on Monday, June 30, and the third will end in September. And I’m not anticipating — I’m not expecting any more. I think it would probably be me, our Chief Science Officer, we’re the only ones left with contracts like that. And I certainly hope that’s not the case and don’t expect it will be the case. So yes, long-winded answer to your question, I’m not expecting more of that.

Operator: The next question is from Swayampakula Ramakanth with H.C. Wainwright.

Swayampakula Ramakanth: In terms — first of all, congratulations on getting the third patient through the trial. So based on what I heard so far, it looks like as soon as you get the okay from the DSMB review, you potentially could be starting the second cohort sometime in August or something like that. So — and does the amended protocol comes into effect for the second cohort, is it? So should we expect the enrollment, the next 3 patients — the enrollment of the next 3 patients go much faster than the 6-plus months that took for the first 3? How should we think about that? And then after that cohort, is there another DSMB look for safety before you start the third cohort where I think it’s 3 Hemopurifiers per week.

James B. Frakes: So the first cohort that we believe we finished is 1 treatment per week, just 1 treatment only in 1 week. The second cohort will be 2 treatments in 1 week. And the third cohort will be 3 treatments in 1 week, Monday, Wednesday, Friday or Tuesday, Thursday, Saturday. The DSMB will need to meet between each — so the one next month about going to Cohort #2. And then again, they’ll need to meet before going to Cohort #3 to answer that question. In terms of recruitments, we now have 3 hospitals recruiting. The hospital that took the longest to get running because of it’s larger and more bureaucratic is Genesis Healthcare in Sydney. And the population is just so much bigger in Sydney than Adelaide or Gold Coast. I think it’s over 3 million people versus 1.2 million or 3 million in Adelaide.

So many more potential patients, and we see weekly updates on recruiting and there’s ongoing recruiting. So we’re — we have a running start. We’re not just waiting until the DSMB — we’re not going to treat anybody until they approved it, but we’re trying to line up patients to quickly move into that. So there’s a reason to think it should move much faster than the first cohort.

Swayampakula Ramakanth: Okay. And is there any potential for a third hospital to be joining in Australia? Or is it just these 2 hospitals are going to run the entire program?

James B. Frakes: Well, we have a third hospital in Gold Coast, which is north of Sydney, but they have not treated any patients yet. They could — I mean they’re still recruiting. I think it’s a smaller hospital in a smaller population area. And we’re looking at potential other hospitals. But again, we potentially only need 6 more patients, best case, 3 in each of the remaining 2 cohorts. So we have a running start. We’re moving their screening. So there’s reason to think it should go faster.

Swayampakula Ramakanth: Okay. And then switching geographies and going into India. So this is — my understanding is it’s just one hospital, Medanta. So what is the protocol there? Is the protocol there with a monotherapy or combination therapy because now that you know you have some safety in the first cohort, so could you just go straight into combination therapies there? Or what — how is the protocol approved there?

James B. Frakes: That’s a good question. Right now, it’s the original protocol as a monotherapy, and it was just approved. So that’s something to think about. But the population — that hospital is in Delhi. I don’t know what the population is, but many millions of people. So — and it’s a very high-end private hospital. So I think their clientele should be able to afford these expensive drugs. I mean we don’t pay for them, but it’s not a small public hospital out in the countryside. It’s a big hospital in a big city.

Swayampakula Ramakanth: Yes, I’m aware of it but…

James B. Frakes: And the doctor that’s in charge of the renal treatment side of the equation is very familiar with our technology. She’s done many, many Hemopurifier treatments, albeit in hep C patients, not oncology patients. So they are comfortable with the device and the therapy.

Swayampakula Ramakanth: Okay. But it’s going to be the same, right? So it will be 3 patients per cohort and…

James B. Frakes: Yes, same. Exactly the same…

Swayampakula Ramakanth: Okay. Okay. All right. And then the same thing includes there, too, like there’s a DSMB look after every cohort similar to what you’re doing in Australia. Is that — or that’s not true.

James B. Frakes: Yes — I believe that’s true.

Swayampakula Ramakanth: Okay. So now that at least you know you have both the geographies opened up, what are you thinking in terms of timing for this whole entire 9 or 18 patients that you want to test for this study to get done?

James B. Frakes: Well, — if we assume 1 patient a month for the remaining 6 in Australia that would take us out near calendar year-end. There would be data collection after that, writing up of reports, so another quarter or 2. But in terms of Australia, I think we’re looking at about 9 to 12 months to be completely done, including writing up the report. India, we’ll just have to see how fast it goes. We’re just getting going there.

Swayampakula Ramakanth: Okay. So we should have a decent picture in a year from now, at least from the Australian side…

James B. Frakes: I would think so. I would think so.

Swayampakula Ramakanth: Okay. All right. And then — so with your current cash and with your current run rate, I mean the expense run rate, so what is the total run rate we could expect from this?

James B. Frakes: Well, like all small life science companies that doesn’t have revenues, we will need to keep raising money until we can take government grants or partner with a larger company. So eventually, we will need to do more equity financing, which is why your firm and other investment banks would make a good business in the life science sector.

Swayampakula Ramakanth: So in terms of getting a partner to the table, what sort of data do you think will help you get there?

James B. Frakes: Well, hopefully, the data from this safety study will be sufficient to partner but only time will tell. I don’t think we have enough — we don’t have any yet really. So it’s all our hypothesis with a lot of safety data.

Operator: The next question is from Anthony Vendetti with Maxim Group.

Anthony V. Vendetti: Most of my questions have been answered. But maybe just following up because it was very recent that you received, I guess, June 19, the approval in India. Obviously, a large population there. I know you said about 1 a month in Australia. Do you think once that gets up and running, the opportunity to do more than 1 per month there exists? Or are you like, look, these are specialized patients shouldn’t expect more than 1 per month.

James B. Frakes: It’s very possible. We’ve observed the actual HP treatments in both Adelaide and Sydney and they’re basically held — done in the dialysis suites without dialysis cartridges, our cartridge attached to a blood pumping machine. But the nurses seem comfortable with it from what we’ve seen we assume. So I don’t think their ability to logistically treat the patients is a constraint. It’s more of the patient recruitment. And if the oncologists begin to feel more comfortable, I would like to think more than one a month is possible. I can’t. I mean I’ll be happy if we can do 1 a month, but there’s no reason why it couldn’t be more.

Anthony V. Vendetti: Yes. Because I think — I mean I think just comparing the populations, I think 10x the population in India versus Australia. So larger patient pool is what I was thinking and…

James B. Frakes: Right. Right.

Anthony V. Vendetti: Right. And then you mentioned one of the ways, obviously, equity financing, but grant money too. And I think you — Aethlon has had grants before. I was wondering if you could just talk about the landscape for grant approval these days with all the changes going on at the government. Is getting grants approved, a, taking longer? Or b, is there just less grant money available and therefore, more difficult to get grant money at this point?

James B. Frakes: Well, we haven’t had any experience with the HHS on the grant side of things since the regime change. I still get e-mails, ticklers from people in that business. So I know it is continuing. I mean I basically ran our DARPA. It was like a $6 million 5-year contract. So I’m — and we’ve had 3 or 4 smaller ones with HHS in the oncology area studying exosomes. They were small $300,000 grants. So we are familiar with them. If we can find one that aligns with our goals, I’m 100% for it. But if it doesn’t align with our goals, they’re not really all that profitable. And I would think the — with the current regime, the overhead rates that could be charged might be lower than — based on what’s happened with the universities’ research overheads being cut. Not that that’s really profit, but it’s slimmer now than it was in those days. So we’ll look. If we can find one that aligns, I think, would be fantastic.

Anthony V. Vendetti: Okay. And then just last question on the expense side. I know you’ve cut expenses a couple of times here. It seems like you’re pretty much at — I’m not going to say it bare bones, but my guess is there’s not much more to cut. What you have in terms of a staff is sort of what’s necessary to continue to keep operating the company, correct?

James B. Frakes: I think that’s a good insight. That is where we are. In fact, as activity ramps up with these oncology trials, expenses in the G&A area might go up a bit. But that’s why I cut them back because I knew with success that would ramp up a bit.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jim Frakes for any closing remarks.

James B. Frakes: I’d like to thank you all again for joining us today to discuss our fiscal fourth quarter results, and we look forward to keeping you up to date on future calls. Thank you again. Goodbye.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.