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Presentation

Aethlon Medical, Inc. misses on earnings expectations. Reported EPS is $-0.85 EPS, expectations were $-0.68.

Operator: Good afternoon, and welcome to the Aethlon Medical First Quarter Fiscal 2026 Earnings and Corporate Update. 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, sir.

James B. Frakes: Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical’s Fiscal First Quarter 2026 Earnings Conference Call. My name is Jim Frakes, and I’m the Chief Executive Officer and Chief Financial Officer of Aethlon Medical. At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal first quarter ended June 30, 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, Dr. Steven LaRosa, our Chief Medical Officer, and I will provide an overview of Aethlon’s 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 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 update portion of this call. First, I’d like to note that because of our March 31 fiscal year, we report our fourth quarter and then the ensuing first quarter quite close in time, basically 6 weeks apart.

As a result, in this earnings call, we will also touch on some of the late-breaking news from our previous earnings call in late June. Overall, we are pleased with the progress in our Australian oncology trial. Dr. LaRosa will cover the specifics on that trial shortly, but I wanted to give some high- level thoughts first. Keep in mind that several of these points are forward-looking statements, as I just noted. In the first quarter, we advanced our lead oncology indication clinical program, delivered preclinical results supporting broader applications including long COVID, all while significantly reducing operating expenses. Our focus remains on moving the Hemopurifier towards regulatory approval and expanding use across multiple diseases. While we received formal approval from India’s Central Drug Standard Control Organization, or CDSCO to initiate a similar oncology trial at Medanta Medicity Hospital in New Delhi, India.

Discussions with our India-based CRO showed first patient treatment would likely slip to early 2026. Given this extended time line and our broader strategic priorities, we decided not to proceed with the India study. This choice is about focus, not just savings, though we expect to conserve $500,000 to $1 million by this decision. Based on our current progress in Australia, we could complete treatments by late 2025 or early 2026, analyze data and be in a position to apply for a PMA or efficacy trial in Australia and engage strategic partners. If we were still early in the Indian trial at that point, regulators or potential strategic partners could require us to finish it first, delaying our path forward. Avoiding that risk is why we are focusing our resources in Australia, which keeps us on the fastest toward our next milestone.

And now I will turn the call over to Dr. LaRosa, who will cover updates on the Australian oncology trial and on our R&D efforts, particularly in long COVID and our recent preclinical data regarding the removal of platelet-derived extracellular vesicles or EVs. Steve?

Steven P. LaRosa: Thank you, Jim. Hello, everyone. I’m joining you live from the Keystone Symposium Conference on Long COVID in Santa Fe, New Mexico, where last evening, I presented preclinical data in long COVID, more about that in a little bit. First, I’d like to give you our progress in our lead indication in oncology, our Australian clinical trial of patients with solid tumors not responding to immunotherapy with anti-PD-1 agents. We have completed Hemopurifier treatments in the 3 patients in our first cohort. The first patient completed a Hemopurifier treatment at our site at Royal Adelaide Hospital in January, and patients 2 and 3 were treated at Royal North Shore Hospital in Sydney on June 2 and June 16 of this year. All 3 participants completed the entire 4-hour Hemopurifier treatment without any device deficiencies and no immediate complications.

At the prespecified 7-day safety follow-up period, none of these 3 participants experienced a dose-limiting toxicity or a device-related serious adverse event. The second patient enrolled, unfortunately, went on to die from progression of his cancer and can only provide a 1-week follow-up worth of data. An independent Data Safety Monitoring Board known as the DSMB convened on July 11, 2025, to review the safety data on these first 3 patients in the first cohort. Following a closed session deliberation, the DSMB provided Aethlon Medical’s senior leadership with a recommendation to advance to our second treatment cohort where patients will receive 2 Hemopurifier treatments during a 1- week period. All 3 of our sites in Australia are actively screening patients for this second cohort.

These sites are screening under an amended protocol that allows patients on either monotherapy or combination therapy that includes pembrolizumab or nivolumab. This protocol amendment was performed to reflect changes in standard of care, leaning now more towards combo therapy and it thus increases the potential pool of patients for the study. The laboratory of Professor Georges Grau at the University of Sydney continues to work on the central lab test on the first patient cohort samples to look for the effects of the Hemopurifier on extracellular vesicle numbers and antitumor T cell function. We would expect to be able to make some observations of this data sometime in September 2025. As a reminder, the primary endpoint of this approximate 9 to 18-patient safety, feasibility and dose-finding study is safety.

The trial will monitor for any adverse events and clinically significant changes in lab tests of Hemopurifier-treated patients with solid tumors who have stable or progressive disease while on a regimen that includes either KEYTRUDA or OPDIVO anti-PD-1 therapy. The patients, as mentioned, it’s designed in 3 cohorts. The first we’ve completed, the second cohort where patients get 2 treatments in a 1-week period and the third cohort where the patients get 3 Hemopurifier treatments in a 1-week period. As mentioned, in addition to monitoring safety, we’re examining the number of Hemopurifier treatments needed to decrease the concentration of extracellular vesicles, and if these decreases in EV numbers improve the body’s own natural ability to attack tumor cells.

These exploratory central laboratory analyses are expected to inform the dosing of a later efficacy and safety trial, including a PMA or premarket approval study that is required by the FDA and other regulatory agencies. Currently, only approximately 30% to 40% of patients who receive pembrolizumab or nivolumab will have a lasting clinical response to these agents. Extracellular vesicles produced by tumors have been implicated in the spread of cancers as well as the resistance to anti-PD-1 therapies. The Aethlon Hemopurifier has been designed to bind and remove these EVs from the bloodstream, which may improve the therapeutic response rates to the anti-PD-1 drugs. In preclinical studies, the Hemopurifier has been able to decrease the number of EVs in cancer patient samples.

Now I’d like to segue to our R&D preclinical activities. Last evening, August 12, 2025, Aethlon presented a poster at the Keystone Symposium on long COVID and other post-acute infectious syndromes being held in Santa Fe, New Mexico. Long-standing symptoms following acute COVID-19 infection known as long covid has been determined to affect approximately 400 million individuals worldwide with a global economic burden of approximately $1 trillion per year. This data can be found in a Nature Medicine 2024 publication. The presentations at this conference reviewed the clinical trials that have been conducted to date and show that there is currently no agent that is approved for the treatment of long COVID, indicating a large unmet medical need. Extracellular vesicles have been implicated in the pathogenesis of long COVID.

Since we had previously demonstrated removal of extracellular vesicles by the Hemopurifier in emergency use patients with severe acute COVID-19 infection, we hypothesized that the patients with long COVID would have extracellular vesicles with the mannose sugar on their surface that would be amenable to removal by our device. With this in mind, we partnered with investigators at the University of California San Francisco Medical Center, Long COVID link cohort, and they provided us samples from — blood samples from patients with long COVID as well as people who had COVID but had fully recovered. The data we presented last evening demonstrated that both large and small extracellular vesicles from long COVID patients found to the GNA lectin and lectin affinity resin, respectively, in our device.

We had active discussions with a number of participants, and we will take this feedback back to Aethlon to discuss potential next steps and other collaborations. Since this data has now been presented publicly, we will share this poster on our Aethlon medical site in the very near future. On May 12, 2025, the results of our preclinical ex vivo study entitled ex vivo removal of CD41-positive platelet microparticles from plasma by a medical device containing Galanthus nivalis agglutinin resin was published in the preprint vehicle bioRxiv and is publicly available. This manuscript has also been submitted to a peer-reviewed publication for review. Platelet-derived extracellular vesicles 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 platelet-derived 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, not only cancer, but also lupus, systemic sclerosis, multiple sclerosis, Alzheimer’s disease, sepsis and acute and long COVID. As a matter of fact, this morning, a presentation from the Paxlovid study indicated that platelets, activated platelets are a source of viral persistence within long COVID. We hypothesized in our publication analysis and our study that the Aethlon hemopurifier, which contains the proprietary GNA affinity resin might be able to bind these platelet-derived EVs from plasma. In this experiment, we took 200 milliliters of healthy donated human plasma and circulated it over our Aethlon Hemopurifier to simulate a clinical Hemopurifier session.

The data revealed that we removed 98.5% of platelet-derived EVs at a time point equivalent to a 4-hour treatment in a patient. The results of this study support our current Australian clinical trial in oncology as well as open the investigation of the hemopurifier in the diseases I just mentioned. With that, I’ll turn the call back over to Jim for the financial discussion, and then we will take questions. Jim?

James B. Frakes: Thanks, Steve, and good afternoon again, everyone. Let’s touch briefly on the financials now. As of June 30, 2025, we had a cash balance of approximately $3.8 million. For the 3 months ended June 30, 2025, our consolidated operating expenses were approximately $1.8 million. That’s down roughly $800,000 or 32% from $2.6 million a year ago. Most of the improvement came from payroll-related savings, including the absence of executive severance recorded last year, lower headcount and a related drop in stock- based compensation. We also saw a meaningful reduction in legal fees after transitioning to a new firm and lower scientific consulting costs with the wrap- up of a project. Our general and administrative expenses were modestly lower as well, helped by reduced insurance costs, but we did see an uptick in clinical trial spending as our trial advances.

All in, these efficiencies brought our operating loss down to $1.8 million compared to $2.6 million in last year’s June quarter, reflecting solid progress in aligning our resources with our strategic priorities. You can find more detail on these expense changes in our 10-Q, which breaks down specific drivers by category. We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for June 30, 2025, and the statements of operations for the 3-month periods ended June 30, 2025, and 2024. We will file our quarterly report on Form 10-Q following this call. Our next earnings call for the fiscal second quarter ending September 30, 2025, will coincide with the filing of our quarterly report on Form 10-Q in November 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] The first question comes from Marla Marin with Zacks.

Marla Marin: So there’s a lot going on. And — just remind us, I think you said in the press release that the primary endpoint of the study in Australia is safety. And so far, with the first cohort having been treated, it looks like there’s no adverse events related to treatment with the Hemopurifier. So it looks like you’re on track to meet the primary endpoint. Is that the right way to think about it?

James B. Frakes: Steve, do you want to take that one?

Steven P. LaRosa: Yes. So we’ve passed the first — it’s a 3-cohort study. We’ve passed the first cohort, an independent Data Safety Monitoring Board made up of experts in oncology and nephrology, reviewed the safety data and said, move forward to the second cohort where patients get to treatment. So we think it’s a big hurdle to have passed.

Marla Marin: Okay. So now trying to put in perspective on preclinical data, an extremely high metric, 98.5% of extracellular vesicles were removed in simulated treatment. But now we’re looking at actual treatment in a clinical study. Those — The kind of data that we should expect to see, I mean, I don’t know, it would seem to me that, that number in a laboratory setting is not really what we should expect to see out of this study with actual participants, patients who are ill. Is that not the way you’re thinking about it?

Steven P. LaRosa: Yes. No, I think you’re tracking perfectly, Marla. What’s in the lab is not — what the proof is in the pudding is in what happens in actual patients. So hopefully, soon, we’ll have our data from the first cohort from the Grau lab? And what matters ultimately is the reduction in actual — from patients who have been treated.

Marla Marin: Okay. Great. And switching now, Jim, I have a question for you on — you’ve really, really done, I think, as much as you can do to try to cut expenses here. It doesn’t seem that there’s any more that you can do. The decision to not move forward with the trial in India, strategic as well as possibly some element of cost containment, but more so strategic. Have you thought in terms of what that implies for you right now in terms of — obviously, you will need cash again at some point to continue funding clinical research. But have you thought about what that means for you in terms of timing?

James B. Frakes: Well, like every development stage life science company that doesn’t have its products approved for sale yet, we will need to continue to raise money, but hopefully, eventually with strategic partners rather than financial investors. But we’ll see what the appetite is going forward. As you say, the India decision was far more about the potential delay in getting approval to move forward into the PMA phase than the savings, even though the savings are nice.That was not the main factor. And I must say, Marla, I was the driving force behind doing the Indian trial. The nephrologist has done a great job for us in the past, and they’re great. But one advantage of India was that all of the previous viral trials we did.

We got off the ground very quickly. They did a good job. That’s not the case anymore. They have many new regulations. They’re much more like the FDA in terms of bureaucracy, and it was just far slower bureaucratically than the Australian trial. And it just didn’t make sense to potentially hamstring the company for 1 to 2 years waiting for that trial to conclude. It just — that put me over the edge with the decision.

Marla Marin: I get it. That makes sense to me. And also, you’ve talked in the past about one of the attractive factors about conducting clinical research in Australia is the cash tax rebate. I don’t think there was any similar — I mean, I think expenses are relative to conducting research here in the U.S., costs would have been lower in India, but there wasn’t anything comparable in terms of a rebate.

James B. Frakes: You are correct. We have that nice tax rebate in Australia. I think it’s still 43% or thereabouts. I don’t believe it’s changed. And there’s no rebate like that in India. So while the cost would have been lower by the hospital, I’m not sure, it might have even pencil lower in Australia after factoring in the rebate.

Operator: The next question comes from RK with H.C. Wainwright.

Swayampakula Ramakanth: I have a couple of questions. The first question regarding the Indian trial itself. I’m just trying to understand what was the reason to having set up — in the first place, setting up a parallel Indian trial as that was going on in Australia. And the second question is, does — do you think — I know the first cohort is done and one of the physician scientists is actually doing analysis with regards to — I’m assuming the extra vesicular — the efficacy itself is what he or she is looking for. But have you — or do you think you can speed up the enrollment in those 3 centers? Or are you trying to get additional centers in Australia so that you can add more patients if you wanted a larger data set to make the decision for the next development stage.

James B. Frakes: Steve, do you want to reply?

Steven P. LaRosa: Sure. So first, on the EV and T cell data, we’ve actually accelerated the time lines to try to get data back from the Grau lab quicker, and they have been very responsive. So like I said, I’m hopeful that there’ll be some early data in September. To your second question, we’re doing multiple efforts to try to speed things up. One is we’re following prescreening logs from all 3 active sites. We’re keeping in close contact through our CRO with our activity. We are actively recruiting plans for 2 additional sites, again, to augment enrollment. And three, we are looking at a couple of different types of initiatives. To help enrollment. one is the use of what’s called clinical trial liaisons. The other is with social media campaigns. So yes, we are actively turning over every rock to look for ways to speed up enrollment and think that those will pay dividends.

Swayampakula Ramakanth: Okay. So do you think when the Grau lab gets done with the analysis, will you be able to put out some sort of press release or talk about it? Or do you need to wait for the — all the 3 cohorts to be done before you start talking about some of that efficacy data.

Steven P. LaRosa: Well, so my feeling is we will have — we’ll be able to make some observations from this first cohort. But remember, it’s only a single HP treatment. And we do not know — that’s why the dose-finding component is part of it. We don’t know if you need 1, 2 or 3. So the trial, the jury really won’t be out on the dosing until we’re done with all 3 cohorts. So again, we’ll be able to make some observations, but I want to — I truly want to see what the dose response is, what the treatment effects are from each individual cohort.

James B. Frakes: As Steve noted in his remarks, RK, our current expectation is that we’ll be able to present those remarks or observations rather in September.

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 again for joining us today to discuss our fiscal first quarter results. We look forward to keeping you up to date on future calls. Thanks again. Goodbye.

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