Business Context and Reporting Period
Company: Aethlon Medical, Inc. (AEMD)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended March 31, 2026
Business Overview: Aethlon is a clinical-stage medical therapeutic company developing the Hemopurifier® (HP), an immunotherapeutic device designed to remove extracellular vesicles (EVs) and enveloped viruses from biological fluids. The device holds FDA "Breakthrough Device" designation for advanced/metastatic cancer and life-threatening viruses. The company currently has no commercial revenue and relies on equity financing to fund operations.
Key Financial Metrics
| Metric | Fiscal Year 2026 | Fiscal Year 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(7,151,469) | $(13,388,089) |
| Operating Expenses | $7,293,632 | $9,341,365 |
| Cash and Cash Equivalents (End of Period) | $5,026,458 | $5,501,261 |
| Working Capital | $4,122,702 | $4,050,514 |
| Cash Used in Operating Activities | $(6,998,392) | $(7,645,532) |
| Cash Provided by Financing Activities | $6,521,904 | $7,727,384 |
| Accumulated Deficit | $(175,106,286) | $(167,954,817) |
Note: The filing text does not provide specific gross margin or operating margin data as the company has no revenue.
Material Changes vs. Prior Period
- Reduced Operating Loss: Net loss decreased by approximately $6.2 million (46%) compared to fiscal 2025, primarily due to a $2.0 million reduction in operating expenses.
- Expense Reductions:
- Payroll: Decreased by $1.1 million, driven by the absence of severance costs for executives terminated in fiscal 2025 and a reduction in stock-based compensation.
- Professional Fees: Decreased by $415,000 due to lower investor relations activity and accounting fees.
- General & Administrative: Decreased by $547,000, aided by a $218,000 Australian R&D tax credit and reduced clinical trial costs in India.
- Financing Activity: The company raised approximately $6.5 million in net cash from financing activities in fiscal 2026, down from $7.7 million in fiscal 2025. This included proceeds from a December 2025 private placement (PIPE) and a September 2025 registered direct offering.
- Capital Structure: The company executed two reverse stock splits (1-for-8 in June 2025 and 1-for-10 in October 2025) to maintain Nasdaq listing compliance. Authorized shares were increased from 6 million to 100 million in February 2026.
Guidance, Outlook, Risks, and Unusual Items
Outlook and Guidance
The company does not provide specific financial guidance. Management expects to continue incurring significant operating losses for the foreseeable future. Substantial doubt exists regarding the company's ability to continue as a going concern for at least one year from the filing date without additional financing.
Management Commentary
- Clinical Progress: The company is advancing a safety, feasibility, and dose-finding clinical trial in Australia for solid tumors. As of March 2026, Cohorts 1 and 2 were completed with no serious adverse events (SAEs) or dose-limiting toxicities (DLTs). Cohort 3 enrollment began in March 2026.
- Manufacturing: The company received FDA approval to manufacture Hemopurifiers at its San Diego facility but is awaiting approval to qualify a second supplier for a key component (GNA lectin).
- Strategic Focus: The company elected not to proceed with an oncology trial in India to conserve resources and focus on the Australian trial.
Risks and Contingencies
- Going Concern: Independent auditors have issued a "going concern" qualification due to recurring losses and the need for additional capital.
- Liquidity: Cash on hand ($5.0 million) may not be sufficient to fund operations for the next 12 months. The company relies on equity financings, which may be dilutive.
- Regulatory: Commercialization depends on FDA Pre-Market Approval (PMA), which is uncertain and costly. The company faces risks related to single-source suppliers for critical raw materials.
- Delisting Risk: The company faces potential delisting from Nasdaq if it fails to meet minimum market value of listed securities (MVLS) requirements proposed by the exchange.
Unusual Items
Fiscal 2025 included a non-cash warrant inducement expense of approximately $4.6 million, which was absent in fiscal 2026, significantly impacting the year-over-year comparison of net loss.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $5.0 million cash balance against current burn rates and the timeline for the next financing round.
- ATM Facility Status: Confirm the remaining capacity of the At-The-Market (ATM) offering program, which was amended in June 2026 to allow sales up to approximately $542,716.
- Clinical Trial Milestones: Monitor the safety data and enrollment progress of Cohort 3 in the Australian oncology trial, as well as the FDA's decision on the second-source supplier qualification.
- Nasdaq Compliance: Track the company's compliance with Nasdaq listing requirements, specifically the minimum bid price and market value of listed securities.
- Subsequent Equity Sales: Review the impact of the 800,111 shares sold under the ATM facility subsequent to March 31, 2026, which generated approximately $1.85 million in net proceeds.