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What changed in AETHLON MEDICAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AETHLON MEDICAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+358 added−362 removedSource: 10-K (2024-03-31) vs 10-K (2023-06-28)

Top changes in AETHLON MEDICAL INC's 2024 10-K

358 paragraphs added · 362 removed · 265 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

76 edited+24 added−24 removed80 unchanged
Biggest changePatents The following table lists our issued patents and patent applications, including their ownership status: Patents Issued in the United States PATENT # PATENT NAME ISSUANCE DATE OWNED OR LICENSED EXPIRATION DATE 9,707,333 Extracorporeal removal of microvesicular particles 7/18/17 Owned 1/6/29 9,364,601 Extracorporeal removal of microvesicular particles 6/14/16 Owned 10/2/29 8,288,172 Extracorporeal removal of microvesicular particles 10/16/12 Owned 3/30/29 7,226,429 Method for removal of viruses from blood by lectin affinity hemodialysis 6/5/07 Owned 1/20/24 10,022,483 Method for removal of viruses from blood by lectin affinity hemodialysis 7/17/18 Owned 1/20/24 7 Patent Applications Pending in the United States APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED 16/415,713 Affinity capture of circulating biomarkers 5/17/19 Owned 17/301,666 Method for removal of viruses from blood by lectin affinity hemodialysis 4/09/21 Owned 16/459,220 Methods and compositions for quantifying exosomes 7/01/19 Owned 17/918,085 Devices and methods for treating a coronavirus infection and symptoms thereof 10/10/22 Owned Foreign Patents PATENT # PATENT NAME ISSUANCE DATE OWNED OR LICENSED EXPIRATION DATE 2353399 Method for removal of viruses from blood by lectin affinity hemodialysis (Russia) 4/27/09 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (Belgium) 7/17/13 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (Ireland) 7/17/13 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (Italy) 7/17/13 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (Great Britain) 7/17/13 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (France) 7/17/13 Owned 1/20/24 1624785 Method for removal of viruses from blood by lectin affinity hemodialysis (Germany) 7/17/13 Owned 1/20/24 2516403 Method for removal of viruses from blood by lectin affinity hemodialysis (Canada) 8/12/14 Owned 1/20/24 2591359 Methods for quantifying exosomes (Germany) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (France) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (Great Britain) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (Spain) 3/01/17 Owned 7/07/31 2644855 Extracorporeal removal of microvesicular particles (Canada) 11/19/19 Owned 1/20/24 3061952 Extracorporeal removal of microvesicular particles (Canada) 7/19/22 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Germany) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Switzerland) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Spain) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (France) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Great Britain) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Italy) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Netherlands) 4/24/19 Owned 1/20/24 1993600 Extracorporeal removal of microvesicular particles (Sweden) 4/24/19 Owned 1/20/24 1126138 Extracorporeal removal of microvesicular particles (Hong Kong) 6/19/20 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Switzerland) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Germany) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Denmark) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Spain) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (France) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Great Britain) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Ireland) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Netherlands) 4/21/21 Owned 1/20/24 3517151 Extracorporeal removal of microvesicular particles (Sweden) 4/21/21 Owned 1/20/24 8 Pending Foreign Patent Applications APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED 8139/DELNP/2008 Extracorporeal removal of microvesicular particles (exosomes) (India) 3/9/07 Owned 2939652 Brain specific exosome based diagnostics and extracorporeal therapies (Canada) 8/12/06 Owned 2021256402 Devices and methods for treating a coronavirus infection and symptoms thereof (Australia) 10/16/22 Owned 3178687 Devices and methods for treating a coronavirus infection and symptoms thereof (Canada) 9/29/22 Owned 21788894.0 Devices and methods for treating a coronavirus infection and symptoms thereof (Europe) 10/26/22 Owned 297109 Devices and methods for treating a coronavirus infection and symptoms thereof (Israel) 10/26/22 Owned 2023-505809 Devices and methods for treating a coronavirus infection and symptoms thereof (Japan) 10/12/22 Owned 11202253625T Devices and methods for treating a coronavirus infection and symptoms thereof (Singapore) 9/29/22 Owned Pending International Patent Applications APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED PCT/US2022/077885 Devices and methods for treating a viral infection and symptoms thereof 10/11/22 Owned Trademarks APPLICATION NAME FILING DATE OWNED OR LICENSED TAUSOME 7/24/2015 Owned SANSAGITTA 7/8/2021 Owned HEMOSAGITTA 1/13/2021 Owned Trademarks In addition to the Tausome, Sansagitta and Hemosagitta trademarks noted in the above table, we also have trademark registrations in the United States for Hemopurifier and Aethlon Medical, Inc., and obtained a trademark registration in India for Hemopurifier.
Biggest changePatents The following table lists our issued patents and patent applications, including their ownership status, including relevant patent term adjustments (PTA), which is a process of extending the term of a U.S. patent: Patents Issued in the United States PATENT # PATENT NAME ISSUANCE DATE OWNED OR LICENSED EXPIRATION DATE 9,707,333 Extracorporeal removal of microvesicular particles 7/18/17 Owned 1/6/29 9,364,601 Extracorporeal removal of microvesicular particles 6/14/16 Owned 5/30/29 as terminal disclaimer filed over 8,288,172 8,288,172 Extracorporeal removal of microvesicular particles 10/16/12 Owned 3/09/27 05/30/29 (with 813 days Patent Term Adjustment (PTA)) 7,226,429 Method for removal of viruses from blood by lectin affinity hemodialysis 6/5/07 Owned 1/20/25 (with 366 days PTA) 10,022,483 Method for removal of viruses from blood by lectin affinity hemodialysis 7/17/18 Owned 8/8/24 (with 201 days PTA) 7 Patent Applications Pending in the United States APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED 17/918,085 Devices and methods for treating a coronavirus infection and symptoms thereof 10/10/22 Owned 18/700571 Devices and methods for treating a viral infection and symptoms thereof 04/11/24 Owned Foreign Patents PATENT # PATENT NAME ISSUANCE DATE OWNED OR LICENSED EXPIRATION DATE 2591359 Methods for quantifying exosomes (Germany) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (France) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (Great Britain) 3/01/17 Owned 7/07/31 2591359 Methods for quantifying exosomes (Spain) 3/01/17 Owned 7/07/31 2644855 Extracorporeal removal of microvesicular particles (Canada) 11/19/19 Owned 3/09/27 3061952 Extracorporeal removal of microvesicular particles (Canada) 7/19/22 Owned 3/09/27 502019000055563 Extracorporeal removal of microvesicular particles (Germany) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (Switzerland) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (Spain) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (France) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (Great Britain) 4/24/19 Owned 3/09/27 502019000055563 Extracorporeal removal of microvesicular particles (Italy) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (Netherlands) 4/24/19 Owned 3/09/27 1993600 Extracorporeal removal of microvesicular particles (Sweden) 4/24/19 Owned 3/09/27 1126138 Extracorporeal removal of microvesicular particles (Hong Kong) 6/19/20 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Switzerland) 4/21/21 Owned 3/09/27 60 2007 061 082.6 Extracorporeal removal of microvesicular particles (Germany) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Denmark) 4/21/21 Owned 3/09/27 2880460 Extracorporeal removal of microvesicular particles (Spain) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (France) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Great Britain) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Ireland) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Netherlands) 4/21/21 Owned 3/09/27 3517151 Extracorporeal removal of microvesicular particles (Sweden) 4/21/21 Owned 3/09/27 Pending Foreign Patent Applications APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED 8139/DELNP/2008 Extracorporeal removal of microvesicular particles (exosomes) (India) 3/9/07 Owned 2939652 Brain specific exosome based diagnostics and extracorporeal therapies (Canada) 8/12/06 Owned 2021256402 Devices and methods for treating a coronavirus infection and symptoms thereof (Australia) 10/16/22 Owned 3178687 Devices and methods for treating a coronavirus infection and symptoms thereof (Canada) 9/29/22 Owned 21788894.0 Devices and methods for treating a coronavirus infection and symptoms thereof (Europe) 10/26/22 Owned 62023077768.7 Devices and methods for treating a coronavirus infection and symptoms thereof (Hong Kong) 08/17/23 Owned 297109 Devices and methods for treating a coronavirus infection and symptoms thereof (Israel) 10/6/22 Owned 2023-505809 Devices and methods for treating a coronavirus infection and symptoms thereof (Japan) 10/12/22 Owned 11202253625T Devices and methods for treating a coronavirus infection and symptoms thereof (Singapore) 9/29/22 Owned 11202253625T Devices and methods for treating a viral infection and symptoms thereof (Australia) 04/12/24 Owned 2024-522200 Devices and methods for treating a viral infection and symptoms thereof (Japan) 04/12/24 Owned 11202402448W Devices and methods for treating a viral infection and symptoms thereof (Singapore) 04/11/24 Owned 11202402448W Devices and methods for treating a viral infection and symptoms thereof (Canada) 4/11/2024 Owned 11202402448W Devices and methods for treating a viral infection and symptoms thereof (Europe) 4/23/2024 Owned 8 Pending International Patent Applications APPLICATION # APPLICATION NAME FILING DATE OWNED OR LICENSED PCT/US2024/015614 Removal of exosomes, ectosomes, mirnas, circulating nucleic acids, and viral particles with 2/13/24 Owned Trademarks APPLICATION NAME FILING DATE OWNED OR LICENSED TAUSOME 7/24/2015 Owned SANSAGITTA 7/8/2021 Owned HEMOSAGITTA 1/13/2021 Owned Trademarks In addition to the Tausome, Sansagitta and Hemosagitta trademarks noted in the above table, we also have trademark registrations in the United States for Hemopurifier and Aethlon Medical, Inc., and obtained a trademark registration in India for Hemopurifier.
In non-clinical bench experiments using a laboratory version of the Hemopurifier, performed in Company labs as well as in multiple other outside labs, including the Centers for Disease Control, or CDC, the United States Army Medical Research Institute of Infectious Diseases, or USAMRIID, Battelle Memorial Research Institute and others, we have demonstrated that a miniature version of the Hemopurifier can bind and clear multiple different glycosylated viruses.
In non-clinical bench experiments using a laboratory version of the Hemopurifier, performed in Company labs as well as in multiple other outside labs, including the Centers for Disease Control and Prevention, or CDC, the United States Army Medical Research Institute of Infectious Diseases, or USAMRIID, Battelle Memorial Research Institute and others, we have demonstrated that a miniature version of the Hemopurifier can bind and clear multiple different glycosylated viruses.
It is unclear how such challenges and any additional healthcare reform measures will impact the ACA. 13 Other legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011, as amended by subsequent legislation, further reduces Medicare’s payments to providers by two percent through fiscal year 2032.
It is unclear how such challenges and any additional healthcare reform measures will impact the ACA. Other legislative changes have been proposed and adopted since the ACA was enacted. The Budget Control Act of 2011, as amended by subsequent legislation, further reduces Medicare’s payments to providers by two percent through fiscal year 2032.
The GNA affinity resin is a key component of the Aethlon Hemopurifier®. The manuscript is titled "Removal of Clinically Relevant SARS-CoV-2 Variants by An Affinity Resin Containing Galanthus nivalis Agglutinin" and was published in bioRxiv. We previously commissioned Battelle Memorial Institute in 2008 to run a monkeypox virus, or MPV, in vitro study using a mini-Hemopurifier.
The GNA affinity resin is a key component of the Hemopurifier. The manuscript is titled "Removal of Clinically Relevant SARS-CoV-2 Variants by An Affinity Resin Containing Galanthus nivalis Agglutinin" and was published in bioRxiv. We previously commissioned Battelle Memorial Institute in 2008 to run a monkeypox virus, or MPV, in vitro study using a mini-Hemopurifier.
The studies were conducted in triplicate and data verification was provided by real-time polymerase chain reaction. 4 The Hemopurifier – Clinical Trials Conducted Overseas in Viral Infections EBOLA Virus In December of 2014, Time Magazine named the Hemopurifier a “Top 25 Invention” as the result of treating an Ebola-infected physician at Frankfurt University Hospital in Germany.
The studies were conducted in triplicate and data verification was provided by real-time polymerase chain reaction. The Hemopurifier – Clinical Trials Conducted Overseas in Viral Infections EBOLA Virus In December of 2014, Time Magazine named the Hemopurifier a “Top 25 Invention” as the result of treating an Ebola-infected physician at Frankfurt University Hospital in Germany.
Further, Medicare coverage is based on our ability to demonstrate that the treatment is “reasonable and necessary” for Medicare beneficiaries. Even if products utilizing our Aethlon Hemopurifier technology receive FDA and other regulatory clearance or approval, they may not be granted coverage and reimbursement by any payor, including by CMS.
Further, Medicare coverage is based on our ability to demonstrate that the treatment is “reasonable and necessary” for Medicare beneficiaries. Even if products utilizing our Hemopurifier technology receive FDA and other regulatory clearance or approval, they may not be granted coverage and reimbursement by any payor, including by CMS.
This patient received eight Hemopurifier treatments without complications and eventually was weaned from a ventilator and was discharged from the hospital. The second patient case study demonstrated in vivo removal of SARS-CoV-2 virus from the blood stream of an infected patient.
This patient received eight Hemopurifier treatments without complications and eventually was weaned from a ventilator and was discharged from the hospital. 4 The second patient case study demonstrated in vivo removal of SARS-CoV-2 virus from the blood stream of an infected patient.
The Award Contract amount was $1,860,561 and, as amended, ran for the period from September 16, 2019 through September 15, 2022. 5 The work performed pursuant to this Award Contract was focused on melanoma exosomes.
The Award Contract amount was $1,860,561 and, as amended, ran for the period from September 16, 2019 through September 15, 2022. The work performed pursuant to this Award Contract was focused on melanoma exosomes.
Food and Drug Administration, or FDA, has designated the Hemopurifier as a “Breakthrough Device” for two independent indications: · the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and with cancer types in which exosomes have been shown to participate in the development or severity of the disease; and · the treatment of life-threatening viruses that are not addressed with approved therapies.
Food and Drug Administration, or FDA, has designated the Hemopurifier as a “Breakthrough Device” for two independent indications: · the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and with cancer types in which exosomes 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.
Incorporated within the Hemopurifier is a protein called a lectin, that aids in binding exosomes and viruses. The Hemopurifier - Clinical Trials In Viral Infections The initial development of the Hemopurifier was focused on viral infections.
Incorporated within the Hemopurifier is a protein called a lectin, that aids in binding exosomes and viruses. 3 The Hemopurifier - Clinical Trials In Viral Infections The initial development of the Hemopurifier was focused on viral infections.
In May 2022, we announced the publication of a pre-print manuscript featuring data that demonstrated Aethlon's proprietary GNA affinity resin was able to bind seven clinically relevant SARS-CoV-2 variants in vitro, including the Delta and Omicron variants. Viral capture efficiency with the GNA affinity resin ranged from 53% to 89% for all variants tested.
In May 2022, we announced the publication of a pre-print manuscript featuring data that demonstrated our proprietary GNA affinity resin was able to bind seven clinically relevant SARS-CoV-2 variants in vitro, including the Delta and Omicron variants. Viral capture efficiency with the GNA affinity resin ranged from 53% to 89% for all variants tested.
The agreement provided for an upfront payment of 53 shares of unregistered common stock and a 2% royalty on any future net sales of all products or services, the sale of which would infringe in the absence of the assignment granted under this agreement. We are also responsible for paying certain patent application and filing costs.
The agreement provided for an upfront payment of six shares of unregistered common stock and a 2% royalty on any future net sales of all products or services, the sale of which would infringe in the absence of the assignment granted under this agreement. We are also responsible for paying certain patent application and filing costs.
That study was designed to enroll up to 40 subjects at up to 20 centers in the United States. Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an ICU, and have acute lung injury and/or severe or life threatening disease, among other criteria.
That study was designed to enroll up to 40 subjects at up to 20 centers in the United States. Subjects were to have established laboratory diagnosis of COVID-19, be admitted to an ICU and have acute lung injury and/or severe or life-threatening disease, among other criteria.
We utilize, whenever appropriate, consultants in order to conserve cash and resources. We believe our employee relations are good. None of our employees are represented by a labor union or are subject to collective-bargaining agreements. 15
We utilize, whenever appropriate, consultants in order to conserve cash and resources. We believe our employee relations are good. None of our employees are represented by a labor union or are subject to collective-bargaining agreements. 14
Under Single Patient Emergency Use regulations, the Company has treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
Under Single Patient Emergency Use regulations, Aethlon has treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
To protect our proprietary medical technologies, including the Hemopurifier product platform and other scientific discoveries, we have a portfolio of over 50 issued patents and pending applications worldwide. We currently have five issued U.S. patents and 32 issued patents in countries outside of the United States.
To protect our proprietary medical technologies, including the Hemopurifier product platform and other scientific discoveries, we have a portfolio of over 46 issued patents and pending applications worldwide. We currently have five issued U.S. patents and 24 issued patents in countries outside of the United States.
We are seeking additional patents on our scientific discoveries. 6 It is possible that our pending patent applications may not result in issued patents, that we will not develop additional proprietary products that are patentable, that any patents issued to us may not provide us with competitive advantages or will be challenged by third parties and that the patents of others may prevent the commercialization of products incorporating our technology.
It is possible that our pending patent applications may not result in issued patents, that we will not develop additional proprietary products that are patentable, that any patents issued to us may not provide us with competitive advantages or will be challenged by third parties and that the patents of others may prevent the commercialization of products incorporating our technology.
Moreover, a product recall could generate substantial negative publicity about our products and business and inhibit or prevent commercialization of other future product candidates. Employees As of June 26, 2023, we had 15 full-time employees and no part-time employees. All of our employees are located in the United States. We do intend to hire additional employees.
Moreover, a product recall could generate substantial negative publicity about our products and business and inhibit or prevent commercialization of other future product candidates. Employees As of June 25, 2024, we had 14 full-time employees and no part-time employees. All of our employees are located in the United States. We do intend to hire additional employees.
Therefore, coverage and reimbursement can differ significantly from payor to payor. 14 Manufacturing To date, manufacturing of our Hemopurifier occurs in collaboration with a contract manufacturer based in California under current Good Manufacturing Practice, or cGMP, regulations promulgated by the FDA. Our contract manufacturer is registered with the FDA.
Therefore, coverage and reimbursement can differ significantly from payor to payor. 13 Manufacturing Historically, manufacturing of our Hemopurifier occurred in collaboration with a contract manufacturer based in California under current Good Manufacturing Practice, or cGMP, regulations promulgated by the FDA. Our contract manufacturer is registered with the FDA.
We currently are experiencing a disruption in our Hemopurifier supply, as our existing supply of Hemopurifiers expired on September 30, 2022, and as previously disclosed, we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.
We previously reported a disruption in our Hemopurifier supply, as our then existing supply of Hemopurifiers expired on September 30, 2022 and, also as previously disclosed, we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.
In 2018, we applied for and were granted a Breakthrough Designation by the FDA “… for the treatment of life-threatening viruses that are not addressed with approved therapies.” Hepatitis C Virus (HCV) Prior to FDA approval of the IDE feasibility study, we conducted investigational HCV treatment studies at the Apollo Hospital, Fortis Hospital and the Medanta Medicity Institute in India.
In 2018, the FDA designated the Hemopurifier as a Breakthrough Device “… for the treatment of life-threatening viruses that are not addressed with approved therapies.” Hepatitis C Virus (HCV) Prior to FDA approval of the IDE feasibility study, we conducted investigational HCV treatment studies at the Apollo Hospital, Fortis Hospital and the Medanta Medicity Institute in India.
The pre-market approval application process is much more demanding than the 510(k) pre-market notification process. A pre-market approval application must be supported by extensive data, including but not limited to technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction reasonable evidence of safety and effectiveness of the device.
A pre-market approval application must be supported by extensive data, including but not limited to technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction reasonable evidence of safety and effectiveness of the device.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. 12 From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof.
The full extent to which inflation, recent bank failures and the war in Ukraine will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets that are highly uncertain. We incorporated in Nevada on March 10, 1999.
The full extent to which inflation, recent bank failures and the ongoing military conflicts will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets that are highly uncertain.
Our intended transition to a new supplier for galanthus nivalis agglutinin, or GNA, a component of our Hemopurifier, is delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing change.
Our intended transition to a new supplier for GNA, a component of our Hemopurifier, continues to be delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing supplier change. We are working with the FDA to qualify this second supplier of our GNA.
If we were judicially determined to be infringing on any third-party patent, we could be required to pay damages, alter our products or processes, obtain licenses or cease sales of products or certain activities.
Our success also depends, in part, on our ability to avoid infringing patents issued to others. If we were judicially determined to be infringing on any third-party patent, we could be required to pay damages, alter our products or processes, obtain licenses or cease sales of products or certain activities.
GOVERNMENT CONTRACTS We have recognized revenue under the following government contracts/grants over the past two years: Phase 2 Melanoma Cancer Contract On September 12, 2019, the National Cancer Institute, or NCI, part of the National Institutes of Health, or NIH, awarded to us an SBIR Phase II Award Contract, for NIH/NCI Topic 359, entitled “A Device Prototype for Isolation of Melanoma Exosomes for Diagnostics and Treatment Monitoring”, or the Award Contract.
We have recognized revenue under the following government contract/grant in the fiscal year ended March 31, 2023: Phase 2 Melanoma Cancer Contract On September 12, 2019, the National Cancer Institute, or NCI, part of the National Institutes of Health, or NIH, awarded to us a SBIR Phase II Award Contract, for NIH/NCI Topic 359, entitled “A Device Prototype for Isolation of Melanoma Exosomes for Diagnostics and Treatment Monitoring”, or the Award Contract.
Under Single Patient Emergency Use regulations, we have also treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
Due to lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022. Under Single Patient Emergency Use regulations, we have also treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
Emergency Use Authorizations, or EUAs, are granted by FDA in public health emergencies but allow use of the authorized device only during the period of the respective public health emergency, and do not change the requirement to ultimately seek PMA approval after the authorization period has ended.
Emergency Use Authorizations, or EUAs, are granted by FDA in public health emergencies but allow use of the authorized device only during the period of the respective public health emergency, and do not change the requirement to ultimately seek PMA approval after the authorization period has ended. 10 Clinical Trials Clinical trials are almost always required to support pre-market approval and are sometimes required for 510(k) clearance.
To date, our manufacture of the Hemopurifier has been limited to quantities necessary to support our clinical studies. Our costs of compliance with federal, state and local environmental laws have been immaterial to date.
To date, our manufacture of the Hemopurifier has been limited to quantities necessary to support our clinical studies. In May 2024, the FDA approved the use of our own manufacturing facility to manufacture Hemopurifiers. Our costs of compliance with federal, state and local environmental laws have been immaterial to date.
Due to lack of further patient enrollment, we and UPMC terminated this trial. In January 2023, we entered into an agreement with North American Science Associates, LLC, or NAMSA, a world leading MedTech CRO offering global end-to-end development services, to oversee our clinical trials investigating the Hemopurifier for oncology indications.
In January 2023, we entered into an agreement with North American Science Associates, LLC, or NAMSA, a world leading medical technology CRO offering global end-to-end development services, to oversee our planned clinical trials investigating the Hemopurifier for oncology indications.
The Award Contract ended on September 15, 2022 and we presented the required final report to the NCI. As the NCI completed its close out review of the contract, we recognized as revenue the $574,245 previously recorded as deferred revenue on our December 31, 2022 balance sheet.
The Award Contract ended on September 15, 2022 and we presented the required final report to the NCI. As the NCI completed its close out review of the contract, we recognized as revenue $574,245 on our statement of operations for the fiscal year ended March 31, 2023.
In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products. Coverage and Reimbursement In both the U.S. and international markets, the use of medical devices is dependent in part on the availability of reimbursement from third-party payors, such as government and private insurance plans.
Coverage and Reimbursement In both the U.S. and international markets, the use of medical devices is dependent in part on the availability of reimbursement from third-party payors, such as government and private insurance plans.
In several cases, these studies were conducted in collaboration with leading government or non-government research institutes. On June 17, 2020, the FDA approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19, or COVID-19, in a New Feasibility Study.
On June 17, 2020, the FDA approved a supplement to our open Investigational Device Exemption, or IDE, for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19, or COVID-19, in a new feasibility study.
In September 2021, we entered into an agreement with a leading global CRO to oversee our U.S. clinical studies investigating the Hemopurifier for critically ill COVID-19 patients. Due to lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022.
In June 2022, the Company completed the treatment protocol for its first patient in this study. In September 2021, we entered into an agreement with a leading global CRO to oversee our U.S. clinical studies investigating the Hemopurifier for critically ill COVID-19 patients.
There potentially are other suppliers of this product, but as with the cartridges, qualifying and obtaining required regulatory approvals takes time and resources. Sales and Marketing We do not currently have any sales and marketing capability.
We currently purchase the diatomaceous earth from Janus Scientific, Inc., as the distributor; however, the product is manufactured by Imerys Minerals Ltd. There potentially are other suppliers of this product, but as with the cartridges, qualifying and obtaining required regulatory approvals takes time and resources. Sales and Marketing We do not currently have any sales and marketing capability.
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. 1 Additionally, in vitro, the Hemopurifier has been demonstrated to capture Zika virus, Lassa virus, MERS-CoV, cytomegalovirus, Epstein-Barr virus, Herpes simplex virus, Chikungunya virus, Dengue virus, West Nile virus, smallpox-related viruses, H1N1 swine flu virus, H5N1 bird flu virus, Monkeypox virus and the reconstructed Spanish flu virus of 1918.
Additionally, in vitro, the Hemopurifier has been demonstrated to capture Zika virus, Lassa virus, MERS-CoV, cytomegalovirus, Epstein-Barr virus, Herpes simplex virus, Chikungunya virus, Dengue virus, West Nile virus, smallpox-related viruses, H1N1 swine flu virus, H5N1 bird flu virus, Monkeypox virus and the reconstructed Spanish flu virus of 1918.
Even if a trial is completed, the results of clinical testing may not demonstrate the safety and effectiveness of the device, may be equivocal or may otherwise not be sufficient to obtain approval or clearance of the product. 11 Ongoing Regulation by the FDA Even after a device receives clearance or approval and is placed on the market, numerous regulatory requirements apply.
Even if a trial is completed, the results of clinical testing may not demonstrate the safety and effectiveness of the device, may be equivocal or may otherwise not be sufficient to obtain approval or clearance of the product.
We rely on a combination of patent, trade secret, copyright and trademark laws, as well as confidentiality agreements, licensing agreements and other agreements, to establish and protect our proprietary rights. Our success also depends, in part, on our ability to avoid infringing patents issued to others.
Our success depends in large part on our ability to protect our proprietary technology, including the Hemopurifier product platform, and to operate without infringing the proprietary rights of third parties. We rely on a combination of patent, trade secret, copyright and trademark laws, as well as confidentiality agreements, licensing agreements and other agreements, to establish and protect our proprietary rights.
In addition, we have thirteen patent applications pending worldwide related to our Hemopurifier product platform and other technologies.
In addition, we have 17 patent applications pending worldwide related to our Hemopurifier product platform and other technologies. We are seeking additional patents on our scientific discoveries.
We also reported that an average capture of 154 million copies of HCV (in International Units, I.U.) within the Hemopurifier during four-hour treatments.
We also reported that an average capture of 154 million copies of HCV (in International Units, I.U.) within the Hemopurifier during four-hour treatments. Prior to this approval, we collected supporting Hemopurifier data through investigational human studies conducted overseas.
We also obtained Ethics Review Board, or ERB, approval and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India, for a COVID-19 clinical trial at that location. One patient has completed participation in the Indian COVID-19 study.
We also obtained ethics review board, or ERB, approval from and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India, for a COVID-19 clinical trial at that location. In May 2023, we received ERB approval from the MAMC, for a second site for our clinical trial in India to treat severe COVID-19.
We consider the protection of our technology, whether owned or licensed, to the exclusion of use by others, to be vital to our business. While we intend to focus primarily on patented or patentable technology, we also rely on trade secrets, unpatented property, know-how, regulatory exclusivity, patent extensions and continuing technological innovation to develop our competitive position.
While we intend to focus primarily on patented or patentable technology, we also rely on trade secrets, unpatented property, know-how, regulatory exclusivity, patent extensions and continuing technological innovation to develop our competitive position. We also own certain trademarks.
Aethlon personnel assemble the various components of the Hemopurifier with materials from our various suppliers, which are purchased and released by Aethlon. Specifically, the Hemopurifier contains three critical components with limited available suppliers. The GNA lectin is sourced from Vector Laboratories Inc. and also is available from other suppliers.
Sources and Availability of Raw Materials and the Names of Principal Suppliers Aethlon personnel assemble the various components of the Hemopurifier with materials from our various suppliers, which are purchased and released by Aethlon. Specifically, the Hemopurifier contains three critical components with limited available suppliers.
We are currently working with our new contract research organization, or CRO, on preparations to conduct a clinical trial in Australia in patients with solid tumors, including head and neck cancer, gastrointestinal cancers and other cancers.
In October 2022, we formed a wholly-owned subsidiary in Australia to initially conduct oncology-related clinical research, then seek regulatory approval and commercialize our Hemopurifier in Australia. We are currently working with our contract research organization, or CRO, on preparations to conduct a clinical trial in Australia in patients with solid tumors, including head and neck cancer, and gastrointestinal cancers.
ITEM 1. BUSINESS Unless otherwise indicated or the context otherwise requires, references to the “Company”, “Aethlon”, “we”, “us” and “our” refer to Aethlon Medical, Inc. Overview and Corporate History Aethlon Medical, Inc., or Aethlon, the Company, we or us, is a medical therapeutic company focused on developing products to treat cancer and life-threatening infectious diseases.
ITEM 1. BUSINESS Unless otherwise indicated or the context otherwise requires, references to the “Company”, “Aethlon”, “we”, “us” and “our” refer to Aethlon Medical, Inc. Overview and Corporate History Overview We are a medical therapeutic company focused on developing the Hemopurifier, a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections and for use in organ transplantation.
The FDA can also impose sales, marketing or other restrictions on devices in order to assure that they are used in a safe and effective manner.
The FDA can also impose sales, marketing or other restrictions on devices in order to assure that they are used in a safe and effective manner. We believe that the Hemopurifier will be classified as a Class III device and as such will be subject to PMA submission and approval.
However, we believe that certain patent applications and/or other patents issued more recently will help protect the proprietary nature of the Hemopurifier treatment technology. In addition to the foregoing, we are monitoring closely the impact of inflation, recent bank failures and the war in Ukraine on our business.
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.
The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE must be approved in advance by the FDA for a specific number of patients at specified study sites.
In the United States, for significant risk devices, these trials require submission of an application for an IDE to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing it is safe to test the device in humans and that the testing protocol is scientifically sound.
Failure by us or by our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or state authorities, which may include any of the following sanctions: · warning or untitled letters, fines, injunctions, consent decrees and civil penalties; · customer notifications, voluntary or mandatory recall or seizure of our products; · operating restrictions, partial suspension or total shutdown of production; · delay in processing submissions or applications for new products or modifications to existing products; · withdrawing approvals that have already been granted; and · criminal prosecution. 12 The Medical Device Reporting laws and regulations require us to provide information to the FDA when we receive or otherwise become aware of information that reasonably suggests our device may have caused or contributed to a death or serious injury as well as a device malfunction that likely would cause or contribute to death or serious injury if the malfunction were to recur.
The FDA uses the same procedures and actions in reviewing PMA supplements as it does in reviewing original PMAs. 11 Failure by us or by our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or state authorities, which may include any of the following sanctions: · warning or untitled letters, fines, injunctions, consent decrees and civil penalties; · customer notifications, voluntary or mandatory recall or seizure of our products; · operating restrictions, partial suspension or total shutdown of production; · delay in processing submissions or applications for new products or modifications to existing products; · withdrawing approvals that have already been granted; and · criminal prosecution.
In the study, viral load was reduced by 93% as the result of 12 Hemopurifier treatments (each four hours in duration) that were administered over the course of one month.
In the study, viral load was reduced by 93% as the result of 12 Hemopurifier treatments (each four hours in duration) that were administered over the course of one month. 5 U.S. GOVERNMENT CONTRACTS We did not recognize revenue from government contracts in the fiscal year ended March 31, 2024.
This suggests that the Hemopurifier could potentially clear it from biologic fluids, including blood. On June 17, 2020, the FDA approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19 in a New Feasibility Study.
On June 17, 2020, the FDA approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19 in a New Feasibility Study. That study was designed to enroll up to 40 subjects at up to 20 centers in the United States.
We believe the Hemopurifier can be a substantial advance in the treatment of patients with advanced and metastatic cancer through the clearance of exosomes that promote the growth and spread of tumors through multiple mechanisms.
Oncology We believe the Hemopurifier may be a substantial advancement in the treatment of patients with advanced and metastatic cancer through its design to bind to and remove harmful exosomes and exosomal particles that promote the growth and spread of tumors.
Endpoints for this study, in addition to safety, include reduction in circulating virus, as well as clinical outcomes (NCT # 04595903). In June 2022, the Company completed the treatment protocol for its first patient in this study.
Endpoints for this study, in addition to safety, included reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).
We also believe the Hemopurifier can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already approved treatment.
We are currently in the process of applying to the Ethics Committees of the two additional interested clinical trial sites in Australia and the site in India . 1 Life-Threatening Viral Infections We also believe that the Hemopurifier can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already approved treatment.
Our intended transition to a new supplier for GNA is delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing change. The base cartridge on which the Hemopurifier is constructed is sourced from Medica S.p.A and we are dependent on the continued availability of these cartridges.
The GNA lectin is sourced from Vector Laboratories Inc. and also is available from other suppliers. Our intended transition from Vector Laboratories to a new supplier for GNA is delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing change.
Clinical trials for significant risk devices may not begin until the IDE application is approved by the FDA and the appropriate institutional review boards, or IRBs, at the clinical trial sites.
The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices and comply with all reporting and recordkeeping requirements. Clinical trials for significant risk devices may not begin until the IDE application is approved by the FDA and the appropriate institutional review boards, or IRBs, at the clinical trial sites.
Failure to comply with applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions, such as product seizures, injunctions and criminal prosecution.
Failure to comply with applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions, such as product seizures, injunctions and criminal prosecution. 9 FDA’s Pre-market Clearance and Approval Requirements Each medical device we seek to commercially distribute in the United States will require either a prior 510(k) clearance, unless it is exempt, or a pre-market approval from the FDA.
As our Hemopurifier is a clinical-stage device, we have the additional challenge of establishing medical industry support, which will be driven by treatment data resulting from human clinical studies. Should our device become market cleared by the FDA or the regulatory body of another country, we may face significant competition from well-funded pharmaceutical organizations.
Industry & Competition The industry for treating infectious disease and cancer is extremely competitive, and companies developing new treatment procedures face significant capital and regulatory challenges. As our Hemopurifier is a clinical-stage device, we have the additional challenge of establishing medical industry support, which will be driven by treatment data resulting from human clinical studies.
It is unclear whether the models will be utilized in any health reform measures in the future. Legislation could be adopted in the future that limits payments for our products from governmental payors. It is possible that additional governmental action will be taken to address the COVID-19 pandemic.
It is unclear whether the models will be utilized in any health reform measures in the future. Legislation could be adopted in the future that limits payments for our products from governmental payors. In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products.
There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and declared invalid or unenforceable. For many of our pending applications, patent interference proceedings may be instituted with the U.S.
U.S. patent applications are not immediately made public, so it is possible that a third party may obtain a patent on a technology we are actively using. 6 There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by third parties and declared invalid or unenforceable.
Patent and Trademark Office, or the USPTO, when more than one person files a patent application covering the same technology, or if someone wishes to challenge the validity of an issued patent. At the completion of the interference proceeding, the USPTO will determine which competing applicant is entitled to the patent, or whether an issued patent is valid.
For many of our pending applications, patent interference proceedings may be instituted with the U.S. Patent and Trademark Office, or the USPTO, when more than one person files a patent application covering the same technology, or if someone wishes to challenge the validity of an issued patent.
Prior to this approval, we collected supporting Hemopurifier data through investigational human studies conducted overseas. 3 SARS-CoV-2/COVID-19 SARS-COV-2, the causative agent of COVID-19 is a member of the coronavirus family, which includes the original SARS virus, SARS-CoV, and the MERS virus. SARS-CoV-2, like all coronaviruses, is glycosylated.
SARS-CoV-2/COVID-19 SARS-COV-2, the causative agent of COVID-19 is a member of the coronavirus family, which includes the original SARS virus, SARS-CoV, and the MERS virus. SARS-CoV-2, like all coronaviruses, is glycosylated. This suggests that the Hemopurifier could potentially clear it from biological fluids, including blood.
Pursuant to the agreement, NAMSA will manage our clinical trials of the Hemopurifier for patients in the United States and Australia with various types of cancer tumors. We anticipate that the initial clinical trials will begin in Australia.
Pursuant to the agreement, NAMSA agreed to manage our planned clinical trials of the Hemopurifier for patients in the United States and Australia with various types of cancer tumors. We recently completed an in vitro binding study of relevant oncology targets, to provide pre-clinical evidence to support our trial design and translational endpoints.
Patent interference proceedings are complex, highly contested legal proceedings, and the USPTO’s decision is subject to appeal.
At the completion of the interference proceeding, the USPTO will determine which competing applicant is entitled to the patent, or whether an issued patent is valid. Patent interference proceedings are complex, highly contested legal proceedings, and the USPTO’s decision is subject to appeal.
That study was designed to enroll up to 40 subjects at up to 20 centers in the United States. Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an intensive care unit, or ICU, and have acute lung injury and/or severe or life-threatening disease, among other criteria.
Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an ICU, and have acute lung injury and/or severe or life-threatening disease, among other criteria. Endpoints for this study, in addition to safety, include reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).
Under certain circumstances, ownership of the patents may revert to the London Health Science Center Research, Inc. if there is an uncured substantial breach of the assignment agreement. 9 Industry & Competition The industry for treating infectious disease and cancer is extremely competitive, and companies developing new treatment procedures face significant capital and regulatory challenges.
Under the assignment agreement, we own the patents until their respective expirations. Under certain circumstances, ownership of the patents may revert to the London Health Science Center Research, Inc. if there is an uncured substantial breach of the assignment agreement.
We believe that the Hemopurifier will be classified as a Class III device and as such will be subject to PMA submission and approval. 10 Pre-market Approval Pathway A pre-market approval application must be submitted to the FDA for Class III devices for which the FDA has required a PMA.
Pre-market Approval Pathway A pre-market approval application must be submitted to the FDA for Class III devices for which the FDA has required a PMA. The pre-market approval application process is much more demanding than the 510(k) pre-market notification process.
Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com. The Mechanism of the Hemopurifier The Hemopurifier is an affinity hemofiltration device designed for the single-use removal of exosomes and life-threatening viruses from the human circulatory system.
Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this Annual Report.
The cost of research and development, all of which has been charged to operations, amounted to approximately $2,745,000 and $2,341,000 in the fiscal years ended March 31, 2023 and 2022, respectively. Intellectual Property We currently own or have license rights to a number of U.S. and foreign patents and patent applications and endeavor to continually improve our intellectual property position.
Research and Development Costs A substantial portion of our operating budget is used for research and development activities. The cost of research and development, all of which has been charged to operations, amounted to approximately $2,520,000 and $2,745,000 in the fiscal years ended March 31, 2024 and 2023, respectively.
MAMC was established in 1958 and is located in New Delhi, India. MMAC is affiliated with the University of Delhi and is operated by the Delhi government. We also recently announced that we also have begun investigating the use of our Hemopurifier in the organ transplant setting.
MAMC was established in 1958 and is located in New Delhi, India. MAMC is affiliated with the University of Delhi and is operated by the Delhi government. 2 We now have two sites in India for this trial with the Medanta Medicity Hospital and Maulana Azad Medical College, or MAMC.
Although there are other suppliers, the process of qualifying a new supplier takes time and regulatory approvals must be obtained. We currently purchase the diatomaceous earth from Janus Scientific, Inc., as the distributor; however, the product is manufactured by Imerys Minerals Ltd.
The base cartridge on which the Hemopurifier is constructed is sourced from Medica S.p.A and we are dependent on the continued availability of these cartridges. Although there are other suppliers, the process of qualifying a new supplier takes time and regulatory approvals must be obtained.
During the trial, the sponsor must comply with the FDA’s IDE requirements for investigator selection, trial monitoring, reporting and recordkeeping. The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices and comply with all reporting and recordkeeping requirements.
The IDE must be approved in advance by the FDA for a specific number of patients at specified study sites. During the trial, the sponsor must comply with the FDA’s IDE requirements for investigator selection, trial monitoring, reporting and recordkeeping.
Our objective is to confirm that the Hemopurifier, in our translational studies, when incorporated into a machine perfusion organ preservation circuit, can remove harmful viruses and exosomes from harvested organs. We have previously demonstrated the removal of multiple viruses and exosomes from buffer solutions, in vitro, utilizing a scaled-down version of our Hemopurifier.
We have previously demonstrated the removal of multiple viruses and exosomes and exosomal particles from buffer solutions, in vitro , utilizing a scaled-down version of our Hemopurifier and believe this process could reduce transplantation complications by improving graft function, reducing graft rejection, maintaining or improving organ viability prior to transplantation, and potentially reducing the number of kidneys rejected for transplant.
Furthermore, others may independently develop similar products, duplicate our products or design around our patents. U.S. patent applications are not immediately made public, so it is possible that a third party may obtain a patent on a technology we are actively using.
Furthermore, others may independently develop similar products, duplicate our products or design around our patents.
Endpoints for this study, in addition to safety, included reduction in circulating virus as well as clinical outcomes (NCT # 04595903). In June 2022, the first patient in this study was enrolled and completed the Hemopurifier treatment phase of the protocol. Due to lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022.
Due to the lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022. However, our IDE for this indication remains open, as we have an active COVID-19 trial in India and wish to preserve the option of enrolling patients if the situation with COVID-19 changes.
Removed
The Aethlon Hemopurifier is a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections. In cancer, the Hemopurifier is designed to deplete the presence of circulating tumor-derived exosomes that promote immune suppression, seed the spread of metastasis and inhibit the benefit of leading cancer therapies. The U.S.
Added
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.
Removed
On October 4, 2019, the FDA approved our Investigational Device Exemption, or IDE, application to initiate an Early Feasibility Study, or EFS, of the Hemopurifier in patients with head and neck cancer in combination with standard of care pembrolizumab (Keytruda).
Added
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

131 edited+29 added−24 removed263 unchanged
Biggest changeGDPR litigation risk may increase as a result of a recent decision of the EU’s highest court finding that a consumer protection association may bring representative actions alleging violations of the GDPR even without a mandate to do so from any specific individuals and whether or not specific individuals’ data protection rights have been violated. 28 In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
Biggest changeIn addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
In the ordinary course of business, we collect, receive, store, process, use, generate, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “Process” or “Processing”) personal information and other Sensitive Information (as defined below), including proprietary and confidential business data, trade secrets, and intellectual property that we collect in connection with clinical trials, as necessary to operate our business, for legal and marketing purposes, and for other business-related purposes.
In the ordinary course of business, we collect, receive, store, process, use, generate, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share, or collectively, “Process” or “Processing” personal data and other Sensitive Information (as defined below), including proprietary and confidential business data, trade secrets, and intellectual property that we collect in connection with clinical trials, as necessary to operate our business, for legal and marketing purposes, and for other business-related purposes.
The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in any of the following enforcement actions: · untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; · unanticipated expenditures to address or defend such actions; · customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; · operating restrictions or partial suspension or total shutdown of production; · refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products; · withdrawing 510(k) clearances or premarket approvals that have already been granted; · refusal to grant export approval for our products; or · criminal prosecution.
The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in any of the following enforcement actions: 21 · untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; · unanticipated expenditures to address or defend such actions; · customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; · operating restrictions or partial suspension or total shutdown of production; · refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products; · withdrawing 510(k) clearances or premarket approvals that have already been granted; · refusal to grant export approval for our products; or · criminal prosecution.
The trading price of our common stock has in the past and may in the future be subject to wide fluctuations in response to factors such as the following: · failure to raise additional funds when needed; · announcements regarding our ongoing development of the Hemopurifier; · results regarding the progress of our clinical trials with the Hemopurifier; · results reported from our clinical trials with the Hemopurifier; · failure to meet the continued listing requirements of and maintain our listing on Nasdaq; · results of operations or revenue in any quarter failing to meet the expectations, published or otherwise, of the investment community; · reduced investor confidence in equity markets; · speculation in the press or analyst community; · wide fluctuations in stock prices, particularly with respect to the stock prices for other medical device companies; · announcements of technological innovations by us or our competitors; · new products or the acquisition of significant customers by us or our competitors; · changes in interest rates; · changes in investors’ beliefs as to the appropriate price-earnings ratios for us and our competitors; · changes in recommendations or financial estimates by securities analysts who track our common stock or the stock of other medical device companies; · changes in management; · sales of common stock by directors and executive officers; 41 · rumors or dissemination of false or misleading information, particularly through Internet chat rooms, instant messaging, and other rapid-dissemination methods; · conditions and trends in the medical device industry generally; · the announcement of acquisitions or other significant transactions by us or our competitors; · adoption of new accounting standards affecting our industry; · changes in the structure of healthcare payment systems; · general market conditions; · domestic or international terrorism and other factors; and · the other factors described in this section.
The trading price of our common stock has in the past and may in the future be subject to wide fluctuations in response to factors such as the following: · failure to raise additional funds when needed; · announcements regarding our ongoing development of the Hemopurifier; · results regarding the progress of our clinical trials with the Hemopurifier; · results reported from our clinical trials with the Hemopurifier; · failure to meet the continued listing requirements of and maintain our listing on Nasdaq; · results of operations or revenue in any quarter failing to meet the expectations, published or otherwise, of the investment community; · reduced investor confidence in equity markets; · speculation in the press or analyst community; · wide fluctuations in stock prices, particularly with respect to the stock prices for other medical device companies; · announcements of technological innovations by us or our competitors; · new products or the acquisition of significant customers by us or our competitors; 39 · changes in interest rates; · changes in investors’ beliefs as to the appropriate price-earnings ratios for us and our competitors; · changes in recommendations or financial estimates by securities analysts who track our common stock or the stock of other medical device companies; · changes in management; · sales of common stock by directors and executive officers; · rumors or dissemination of false or misleading information, particularly through Internet chat rooms, instant messaging, and other rapid-dissemination methods; · conditions and trends in the medical device industry generally; · the announcement of acquisitions or other significant transactions by us or our competitors; · adoption of new accounting standards affecting our industry; · changes in the structure of healthcare payment systems; · general market conditions; · domestic or international terrorism and other factors; and · the other factors described in this section.
Additionally, companies that transfer personal data to recipients outside of the EEA and/or UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators individual litigants and activist groups. We publish privacy policies and may publish marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
Additionally, companies that transfer personal data to recipients outside of the EEA and/or UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators individual litigants and activist groups. 27 We publish privacy policies and may publish marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
Claims or losses in excess of any product liability insurance coverage that we may obtain could have a material adverse effect on our business, financial condition and results of operations. Our Hemopurifier product candidate may be used in connection with medical procedures in which it is important that those products function with precision and accuracy.
Claims or losses in excess of any product liability insurance coverage that we may obtain could have a material adverse effect on our business, financial condition and results of operations. 23 Our Hemopurifier product candidate may be used in connection with medical procedures in which it is important that those products function with precision and accuracy.
Our business model calls for the partial or full outsourcing of the clinical and other development and manufacturing, sales and marketing of our product candidates in order to reduce our capital and infrastructure costs as a means of potentially improving our financial position. Our success will depend on the performance of these outsourced providers.
Our business model calls for the partial or full outsourcing of the clinical and other development, sales and marketing of our product candidates in order to reduce our capital and infrastructure costs as a means of potentially improving our financial position. Our success will depend on the performance of these outsourced providers.
However, these may not adequately protect our rights or permit us to gain or keep any competitive advantage. 36 The issuance of a patent is not conclusive as to its scope, validity or enforceability. The scope, validity or enforceability of our issued patents can be challenged in litigation or proceedings before the U.S.
However, these may not adequately protect our rights or permit us to gain or keep any competitive advantage. The issuance of a patent is not conclusive as to its scope, validity or enforceability. The scope, validity or enforceability of our issued patents can be challenged in litigation or proceedings before the U.S.
Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities. 40 Historically we have not paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We have never paid cash dividends on our common stock.
Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities. Historically we have not paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We have never paid cash dividends on our common stock.
We did not make such an election in our original articles of incorporation and have not amended our articles of incorporation to so elect. Nevada’s “acquisition of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling interest in certain Nevada corporations.
We did not make such an election in our original articles of incorporation and have not amended our articles of incorporation to so elect. 43 Nevada’s “acquisition of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling interest in certain Nevada corporations.
Government contractor, we would be subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities. 39 As a potential future U.S. Government contractor, we would be subject to a number of procurement rules and regulations. Government contractors must comply with specific procurement regulations and other requirements.
Government contractor, we would be subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities. As a potential future U.S. Government contractor, we would be subject to a number of procurement rules and regulations. Government contractors must comply with specific procurement regulations and other requirements.
We do not have the required financial and human resources to carry out on our own all the pre-clinical and clinical development for our Hemopurifier product candidate or any other or future product candidates that we may develop, and do not have the capability and resources to manufacture, market or sell our Hemopurifier product candidate or any future product candidates that we may develop.
We do not have the required financial and human resources to carry out on our own all the pre-clinical and clinical development for our Hemopurifier product candidate or any other or future product candidates that we may develop, and do not have the capability and resources to market or sell our Hemopurifier product candidate or any future product candidates that we may develop.
We will need to outsource and rely on third parties for the clinical development and manufacturing, sales and marketing of our Hemopurifier or any future product candidates that we may develop, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.
We will need to outsource and rely on third parties for the clinical development, sales and marketing of our Hemopurifier or any future product candidates that we may develop, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.
The loss of patent protection in one jurisdiction may influence our ability to maintain patent protection for the same technology in other jurisdictions. 38 Risks Related to U.S. Government Contracts We may not obtain additional U.S. Government contracts to further develop our technology.
The loss of patent protection in one jurisdiction may influence our ability to maintain patent protection for the same technology in other jurisdictions. Risks Related to U.S. Government Contracts We may not obtain additional U.S. Government contracts to further develop our technology.
Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses and cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. 16 Risks Related to Our Business Operations Delays, interruptions or the cessation of production by our third-party suppliers of important materials or delays in qualifying new materials, has and may continue to prevent or delay our ability to manufacture our Hemopurifier.
Because of the numerous risks and uncertainties associated with product development, we cannot predict the timing or amount of increased expenses and cannot assure you that we will ever be profitable or generate positive cash flow from operating activities. 15 Risks Related to Our Business Operations Delays, interruptions or the cessation of production by our third-party suppliers of important materials or delays in qualifying new materials, has and may continue to prevent or delay our ability to manufacture our Hemopurifier.
As a company with limited resources and potential exposures to management, we will have a more difficult time attracting and retaining management and outside independent directors than a more established public or private company due to these enhanced duties, obligations and potential liabilities. 20 If we fail to comply with extensive regulations of U.S. and foreign regulatory agencies, the commercialization of our products could be delayed or prevented entirely.
As a company with limited resources and potential exposures to management, we will have a more difficult time attracting and retaining management and outside independent directors than a more established public or private company due to these enhanced duties, obligations and potential liabilities. 19 If we fail to comply with extensive regulations of U.S. and foreign regulatory agencies, the commercialization of our products could be delayed or prevented entirely.
Security Breaches or other interruptions and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
Security Breaches or other interruptions and attendant consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
If we are unable to successfully compete against larger companies in the pharmaceutical industry, we may never generate significant revenue or be profitable. 18 We have limited experience in identifying and working with large-scale contracts with medical device manufacturers; manufacture of our devices must comply with good manufacturing practices in the United States.
If we are unable to successfully compete against larger companies in the pharmaceutical industry, we may never generate significant revenue or be profitable. 17 We have limited experience in identifying and working with large-scale contracts with medical device manufacturers; manufacture of our devices must comply with good manufacturing practices in the United States.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our services) or the third-party information technology systems that support us and our services.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our services) or the third-party information technology systems that support us and our services.
Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. 33 Our use of hazardous materials, chemicals and viruses exposes us to potential liabilities for which we may not have adequate insurance.
Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. 32 Our use of hazardous materials, chemicals and viruses exposes us to potential liabilities for which we may not have adequate insurance.
It is unclear whether the models will be utilized in any health reform measures in the future. 32 Legislation could be adopted in the future that limits payments for our products from governmental payors. In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products.
It is unclear whether the models will be utilized in any health reform measures in the future. 31 Legislation could be adopted in the future that limits payments for our products from governmental payors. In addition, commercial payors such as insurance companies, could adopt similar policies that limit reimbursement for medical device manufacturers’ products.
If we fail, or are perceived to have failed, to address or comply with Data Protection Obligations, it could: increase our compliance and operational costs; expose us to regulatory scrutiny, actions, fines and penalties; result in reputational harm; interrupt or stop our clinical trials; result in litigation and liability; result in an inability to process personal data or to operate in certain jurisdictions; harm our business operations or financial results or otherwise result in a material harm to our business, or other material adverse impact on our business, results of operations and financial condition.
If we or third parties fail, or are perceived to have failed, to address or comply with applicable Data Protection Obligations, it could: increase our compliance and operational costs; expose us to regulatory scrutiny, actions, fines and penalties; result in reputational harm; interrupt or stop our clinical trials; result in litigation and liability; result in an inability to process personal data or to operate in certain jurisdictions; harm our business operations or financial results or otherwise result in a material harm to our business, or other material adverse impact on our business, results of operations and financial condition.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 46
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 44 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If any of our key officers were to leave us, it could make it impossible, if not cause substantial delays and costs, to implement our long-term business objectives and growth. Our inability to attract and retain qualified personnel could impede our ability to achieve our business objectives. We have 15 full-time employees.
If any of our key officers were to leave us, it could make it impossible, if not cause substantial delays and costs, to implement our long-term business objectives and growth. Our inability to attract and retain qualified personnel could impede our ability to achieve our business objectives. We have 14 full-time employees.
A broader or more active public trading market for our common shares may not develop or be sustained, and current trading levels may decrease. 43 The market price for our common stock is volatile; you may not be able to sell our common stock at or above the price you have paid for it, which may result in losses to you.
A broader or more active public trading market for our common shares may not develop or be sustained, and current trading levels may decrease. 41 The market price for our common stock is volatile; you may not be able to sell our common stock at or above the price you have paid for it, which may result in losses to you.
If we cannot attract and retain qualified staff and executives, we will be unable to develop our products and achieve regulatory clearance, and our business could fail. 19 We plan to expand our operations, which may strain our resources; our inability to manage our growth could delay or derail implementation of our business objectives.
If we cannot attract and retain qualified staff and executives, we will be unable to develop our products and achieve regulatory clearance, and our business could fail. 18 We plan to expand our operations, which may strain our resources; our inability to manage our growth could delay or derail implementation of our business objectives.
We may be required to expend significant resources, fundamentally change our business activities and practices, or modify our operations, including clinical trial activities, or information technology in an effort to protect against Security Breaches and to mitigate, detect and remediate actual and potential vulnerabilities.
We may expend significant resources, fundamentally change our business activities and practices, or modify our operations, including clinical trial activities, or information technology in an effort to protect against Security Breaches and to mitigate, detect and remediate actual and potential vulnerabilities.
These consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing Sensitive Information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms.
These consequences may include: government enforcement actions, for example, investigations, fines, penalties, audits, and inspections; additional reporting requirements and/or oversight; restrictions on processing Sensitive Information, including personal data; litigation, including class claims; indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations, including availability of data; financial loss; and other similar harms.
Our issued patents begin to expire in 2024, with the last of these patents expiring in 2036, although terminal disclaimers, patent term extension or patent term adjustment can shorten or lengthen the patent term. We rely on a combination of patent protection, trade secret laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology.
Our issued patents begin to expire in August 2024, with the last of these patents expiring in 2031, although terminal disclaimers, patent term extension or patent term adjustment can shorten or lengthen the patent term. We rely on a combination of patent protection, trade secret laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology.
Companies that violate the GDPR can face private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests, temporary or definitive restrictions on data processing and other corrective actions, and fines of up to the greater of 20 million Euros under the EU GDPR / 17.5 million pounds streamline under the UK GDPR or 4% of their worldwide annual revenue, whichever is greater.
For example, under GDPR, companies can face private litigation related to Processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests, temporary or definitive restrictions on data Processing or other corrective actions, and fines of up to the greater of 20 million Euros under the EU GDPR / 17.5 million pounds streamline under the UK GDPR or 4% of their worldwide annual revenue, whichever is greater.
Although we endeavor to comply with all applicable Data Protection Obligations, we may at times fail (or be perceived to have failed) to do so. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Although we endeavor to comply with all applicable Data Protection Obligations, we may at times fail, or be perceived to have failed, to do so. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
We cannot be sure that our insurance coverage will be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or other material adverse impact on our business, results of operations and financial condition arising out of our Processing operations, privacy and security practices, or Security Breaches that we may experience.
Our insurance coverage may not be adequate or otherwise protect us from or adequately mitigate liabilities or damages with respect to claims, costs, expenses, litigation, fines, penalties, business loss, data loss, regulatory actions or other material adverse impact on our business, results of operations and financial condition arising out of our Processing operations, privacy and security practices, or Security Breaches that we may experience.
Ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe, and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
Ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe, and can lead to significant interruptions in our operations, loss of Sensitive Information and income, reputational harm, and diversion of funds.
The required testing of the product candidate may make that candidate no longer commercially viable. The conduct of clinical trials may be critiqued by the FDA, or a clinical trial site’s Institutional Review Board or Institutional Biosafety Committee, which may delay or make impossible clinical testing of a product candidate.
The required testing of the product candidate may make that candidate no longer commercially viable. The conduct of clinical trials may be critiqued by the FDA, or a clinical trial site’s IRB or Institutional Biosafety Committee, which may delay or make impossible clinical testing of a product candidate.
Failure to comply with these or other regulatory requirements of the FDA may subject us to administrative or judicially imposed sanctions, including: · warning letters; · civil penalties; · criminal penalties; · injunctions; · product seizure or detention; · product recalls; and · total or partial suspension of productions. 21 Delays in successfully completing our planned clinical trials could jeopardize our ability to obtain regulatory approval.
Failure to comply with these or other regulatory requirements of the FDA may subject us to administrative or judicially imposed sanctions, including: · warning letters; · civil penalties; · criminal penalties; · injunctions; · product seizure or detention; · product recalls; and · total or partial suspension of productions. 20 Delays in successfully commencing or completing our planned clinical trials could jeopardize our ability to obtain regulatory approval and sustain our operations.
It is possible that, even if we are successful in these new areas, that the market will not accept our product, or that our product will generate significant revenues for us. As a public company with limited financial resources undertaking the launch of new medical technologies, we may have difficulty attracting and retaining executive management and directors.
It is possible that, even if we are successful in the organ transplant field, that the market will not accept our product, or that our product will generate significant revenues for us. As a public company with limited financial resources undertaking the launch of new medical technologies, we may have difficulty attracting and retaining executive management and directors.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data to recipients outside Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.
Effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States.
The Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States.
As a former and potential future U.S. Government contractor, we are required to comply with applicable laws, regulations and standards relating to our accounting practices and would be subject to periodic audits and reviews. As part of any such audit or review, the U.S.
Government contractor, we are required to comply with applicable laws, regulations and standards relating to our accounting practices and would be subject to periodic audits and reviews. As part of any such audit or review, the U.S.
Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims. While we currently carry directors’ and officers’ liability insurance, such insurance is expensive and difficult to obtain.
Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims. While we currently carry directors’ and officers’ liability insurance, such insurance is expensive and could be difficult to maintain in the future.
The FDA can delay, limit or deny approval of a PMA application for many reasons, including: · our inability to demonstrate safety or effectiveness of the Hemopurifier, or any other product we develop, to the FDA’s satisfaction; · insufficient data from our preclinical studies and clinical trials, including for our Hemopurifier, to support approval; · failure of the facilities of our third-party manufacturer or suppliers to meet applicable requirements; · inadequate compliance with preclinical, clinical or other regulations; · our failure to meet the FDA’s statistical requirements for approval; and · changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical trials. 25 Modifications to products that are approved through a PMA application generally need FDA approval.
The FDA can delay, limit or deny approval of a PMA application for many reasons, including: · our inability to demonstrate safety or effectiveness of the Hemopurifier, or any other product we develop, to the FDA’s satisfaction; · insufficient data from our preclinical studies and clinical trials, including for our Hemopurifier, to support approval; · failure of the facilities of our third-party manufacturer or suppliers to meet applicable requirements; · inadequate compliance with preclinical, clinical or other regulations; · our failure to meet the FDA’s statistical requirements for approval; and · changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical trials.
Our business prospects depend on our ability to complete studies, clinical trials, including our ongoing and planned studies in COVID-19 patients and solid tumors in cancer, obtain satisfactory results, obtain required regulatory approvals and successfully commercialize our Hemopurifier product candidate.
Our business prospects depend on our ability to complete studies, commence and complete our planned clinical trials, including our ongoing and planned studies in solid tumors in cancer, obtain satisfactory results, obtain required regulatory approvals and successfully commercialize our Hemopurifier product candidate.
For example, in late 2020, we identified during our device quality review procedures prior to product release that one of our critical suppliers had produced a Hemopurifier component that was not produced to our specifications, although no affected Hemopurifiers were released into our inventory or to any clinical trial sites. Our current inventory of Hemopurifiers expired on September 30, 2022.
For example, in late 2020, we identified during our device quality review procedures prior to product release that one of our critical suppliers had produced a Hemopurifier component that was not produced to our specifications, although no affected Hemopurifiers were released into our inventory or to any clinical trial sites.
The Institutional Review Board for a clinical trial may stop a trial or deem a product candidate unsafe to continue testing. This would have a material adverse effect on the value of the product candidate and our business prospects.
The IRB for a clinical trial may stop a trial or deem a product candidate unsafe to continue testing. This would have a material adverse effect on the value of the product candidate and our business prospects.
We may use and share Sensitive Information with service providers and subprocessors and other third parties upon whom we rely to help us operate our business.
We may use and share Sensitive Information with service providers and subprocessors and other third parties with whom we work to help us operate our business.
Government to unilaterally: · suspend or prevent us for a period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations; · audit and object to our contract-related costs and fees, including allocated indirect costs; · control and potentially prohibit the export of our products; and · change certain terms and conditions in our contracts.
Government to unilaterally: · suspend or prevent us for a period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations; · audit and object to our contract-related costs and fees, including allocated indirect costs; · control and potentially prohibit the export of our products; and · change certain terms and conditions in our contracts. 37 As a former and potential future U.S.
During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
Government through consultation with a number of governmental agencies, including the FDA, the National Institutes of Health, the Centers for Disease Control and Prevention and the Department of Homeland Security. Our Hemopurifier has not received required regulatory approval from the FDA, or any foreign regulatory agencies, to be commercially marketed and sold.
Government through consultation with a number of governmental agencies, including the FDA, the National Institutes of Health, the CDC and the Department of Homeland Security. Our Hemopurifier has not received required regulatory approval from the FDA, or any foreign regulatory agencies, to be commercially marketed and sold.
In the ordinary course of our business, we and third parties upon which we rely may process proprietary, confidential and sensitive information, including personal data, intellectual property, trade secrets, and proprietary business information owned or controlled by ourselves or other third parties, or collectively, Sensitive Information.
In the ordinary course of our business, we and third parties with whom we work may process proprietary, confidential and sensitive information, including personal data, intellectual property, trade secrets, and proprietary business information owned or controlled by ourselves or other third parties, or collectively, Sensitive Information.
During the 52-week period ended March 31, 2023, the high and low closing sale prices for a share of our common stock were $1.99 and $0.25, respectively. The volatility in our share price is attributable to a number of factors. First, as noted above, trading in our common stock often has been thin.
During the 52-week period ended March 31, 2024, the high and low closing sale prices for a share of our common stock were $6.10 and $1.42, respectively. The volatility in our share price is attributable to a number of factors. First, as noted above, trading in our common stock often has been thin.
FDA review of a new supplier is required if these materials become unavailable from our current suppliers. Currently, we are experiencing an interruption in the manufacturing of our Hemopurifier as we transition to a new supplier of galanthus nivalis agglutinin, or GNA, used in the manufacture of our Hemopurifier.
FDA review of a new supplier is required if these materials become unavailable from our current suppliers. In the recent past, we experienced an interruption in the manufacturing of our Hemopurifier as we sought to transition to a new supplier of galanthus nivalis agglutinin, or GNA, used in the manufacture of our Hemopurifier.
On October 25, 2022, we received a notice, or Notice, from The Nasdaq Stock Market, or Nasdaq, that we were not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement.
On June 27, 2024, we received a letter, or Notice, from The Nasdaq Stock Market, or Nasdaq, that we were not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement.
We have not received the required FDA approval of our proposal to approve a new qualified supplier of the GNA and are working with the FDA to gain approval of this supplier.
We have not received the required FDA approval of our IDE supplement for a new qualified supplier of the GNA and are working with the FDA to gain approval of this supplier.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. 27 We are subject to stringent and changing U.S. and foreign laws, rules, regulations and standards as well as policies, contracts and other obligations related to data privacy and security.
If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
We may also be the subject of phishing attacks, viruses, malware (including as a result of advanced persistent threat intrusions), server malfunction, software or hardware failures, loss of data or other computer assets, telecommunications failures, earthquakes, fires, floods, or other similar issues.
We may also be the subject of viruses, malware, including as a result of advanced persistent threat intrusions, server malfunction, software or hardware failures, loss of data or other computer assets, adware, attacks enhanced or facilitated by AI, telecommunications failures, earthquakes, fires, floods, or other similar threats.
Many companies of all sizes, including major pharmaceutical companies, specialized biotechnology companies, and traditional healthcare providers, are engaged in redesigning organ transplant care and diagnostic medicine. Competitors operating in these potential new business areas may have substantially greater financial and other resources, larger research and development staff, and more experience in these business areas.
Many companies of all sizes, including major pharmaceutical companies, specialized biotechnology companies, and traditional healthcare providers, are engaged in redesigning organ transplant care. Competitors operating in this area may have substantially greater financial and other resources, larger research and development staff, and more experience in this area.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), supply-chain attacks, loss of data or other information technology assets, adware, software bugs, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks (such as credential stuffing) and ransomware attacks.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks, including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks, supply-chain attacks, loss of data or other information technology assets, adware, software bugs, malicious code, such as viruses and worms, employee theft or misuse, denial-of-service attacks, such as credential stuffing, and ransomware attacks.
Completion of our clinical trials, announcement of results of the trials and our ability to obtain regulatory approvals could be delayed for a variety of reasons, including: · slow patient enrollment; · serious adverse events related to our medical device candidates; · unsatisfactory results of any clinical trial; · the failure of our principal third-party investigators to perform our clinical trials on our anticipated schedules; · different interpretations of our pre-clinical and clinical data, which could initially lead to inconclusive results; and · delays resulting from the coronavirus pandemic.
Completion of our clinical trials, announcement of results of the trials and our ability to obtain regulatory approvals could be delayed for a variety of reasons, including: · failure to obtain required approvals to commence our planned clinical trials; · slow patient enrollment in our planned clinical trials; · serious adverse events related to our Hemopurifier; · unsatisfactory results of any clinical trial; · the failure of our principal third-party investigators to perform our clinical trials on our anticipated schedules; and · different interpretations of our pre-clinical and clinical data, which could initially lead to inconclusive results.
If we, or our manufacturers, fail to adhere to QSR requirements in the United States, this could delay production of our products and lead to fines, difficulties in obtaining regulatory clearances, recalls, enforcement actions, including injunctive relief or consent decrees, or other consequences, which could, in turn, have a material adverse effect on our financial condition or results of operations. 22 In addition, the FDA assesses compliance with the QSR through periodic announced and unannounced inspections of manufacturing and other facilities.
If we, or our manufacturers, fail to adhere to QSR requirements in the United States, this could delay production of our products and lead to fines, difficulties in obtaining regulatory clearances, recalls, enforcement actions, including injunctive relief or consent decrees, or other consequences, which could, in turn, have a material adverse effect on our financial condition or results of operations.
In addition, the California Consumer Privacy Act of 2018, CCPA, applies to personal information of consumers, business representatives, and employees, and requires covered businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
For example, the California Consumer Privacy Act of 2018, or CCPA, applies to personal data of consumers, business representatives, and employees who are California residents, and requires covered businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
These areas would be new to our product development and management personnel, and we may not be successful in these new areas. Even if we are successful in developing our Hemopurifier for the organ transplant market, we may not be able to compete effectively or generate significant revenues in this new area.
This area is new to our product development and management personnel, and we may not be successful in the organ transplant market where we do not have any experience. Even if we are successful in developing our Hemopurifier for the organ transplant market, we may not be able to compete effectively or generate significant revenues in this new area.
If we (or a third party upon whom we rely) experience a Security Breach or are perceived to have experienced a Security Breach, we may experience adverse consequences.
If we or a third party with whom we work experiences a Security Breach or are perceived to have experienced a Security Breach, we may experience adverse consequences.
The Notice indicated that, consistent with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 days to regain compliance with the Minimum Bid Price Requirement by having the closing bid price of our common stock meet or exceed $1.00 per share for at least ten consecutive business days.
The Notice indicated that, consistent with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days to regain compliance with the Minimum Bid Price Requirement by having the closing bid price of our common stock meet or exceed $1.00 per share for at least ten consecutive business days. 38 There can be no assurance, however, that we will be able to regain compliance with the Minimum Bid Price Requirement.
The manufacture of our products may also be impacted by: · availability or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier; · our ability to comply with new regulatory requirements, including our ability to comply with cGMP; · natural disasters; · changes in forecasts of future demand for product components; · potential facility contamination by microorganisms or viruses; · updating of manufacturing specifications; · product quality success rates and yields; and · global viruses and pandemics, including the current COVID-19 pandemic.
The manufacture of our products may also be impacted by: · availability or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier; · our ability to comply with new regulatory requirements, including our ability to comply with cGMP; · natural disasters; · changes in forecasts of future demand for product components; · potential facility contamination by microorganisms or viruses; · updating of manufacturing specifications; · product quality success rates and yields; and · global viruses and pandemics. 16 Any future interruption in the manufacture and supply of our Hemopurifier could delay shipments of our Hemopurifier for use in clinical trials in the United States, Australia and India.
As of March 31, 2023, we have reserved for issuance 2,045,006 of those shares of common stock for outstanding restricted stock units, stock options and warrants, excluding an aggregate of 348,837 issuances of restricted stock units to our independent directors under our 2020 Equity Incentive Plan made subsequent to March 31, 2023.
As of March 31, 2024, we have reserved for issuance 124,028 of those shares of common stock for outstanding restricted stock units, stock options and warrants, excluding an aggregate of 131,576 issuances of restricted stock units to our independent directors under our 2020 Equity Incentive Plan made subsequent to March 31, 2024.
Similarly, some modifications made to products cleared through a 510(k) may require a new 510(k). The FDA’s 510(k) clearance process usually takes from three to 12 months, but may last longer.
Modifications to products that are approved through a PMA application generally need FDA approval. Similarly, some modifications made to products cleared through a 510(k) may require a new 510(k). The FDA’s 510(k) clearance process usually takes from three to 12 months, but may last longer.
We currently have five issued U.S. patents and four pending U.S. patent applications. We also have 32 issued foreign patents and have applied for nine additional foreign and international patents.
We currently have five issued U.S. patents and two pending U.S. patent applications. We also have 24 issued foreign patents and have applied for 15 additional foreign and international patents.
If we cannot manage our growth initiatives, including our expansion of our clinical trials in India and potentially in other countries, we will be unable to commercialize our products on a large-scale in a timely manner, if at all, and our business could fail. We may enter new business areas, such as the organ transplant market or diagnostics.
If we cannot manage our growth initiatives, including our expansion of our clinical trials in India and potentially in other countries, we will be unable to commercialize our products on a large-scale in a timely manner, if at all, and our business could fail.
Although we have received approval to proceed with clinical trials of the Hemopurifier in the United States under the investigational device exemption, the current approval from the FDA to proceed could be revoked, the study could be unsuccessful, or the FDA PMA approval may not be obtained or could be revoked.
We also may design new products in the future that could require the clearance of a 510(k). 24 Although we have received approval to proceed with clinical trials of the Hemopurifier in the United States under the investigational device exemption, the current approval from the FDA to proceed could be revoked, the study could be unsuccessful, or the FDA PMA approval may not be obtained or could be revoked.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, fines and penalties, a disruption of our clinical trials or commercialization of our products, private litigation, harm to our reputation, or other adverse effects on our business or prospects.
Our actual or perceived failure to comply with such obligations, or such failure by the third parties with whom we work, could lead to regulatory investigations or actions, fines and penalties, a disruption of our clinical trials or commercialization of our products, private litigation, including class claims, and mass arbitration demands, harm to our reputation, or other adverse effects on our business or prospects.
These laws may have a chilling effect on certain transactions if our articles of incorporation or bylaws are not amended to provide that these provisions do not apply to us or to an acquisition of a controlling interest, or if our disinterested stockholders do not confer voting rights in the control shares. 45 Various provisions of our bylaws may delay, defer or prevent a tender offer or takeover attempt of us that a stockholder might consider in his or her best interest.
These laws may have a chilling effect on certain transactions if our articles of incorporation or bylaws are not amended to provide that these provisions do not apply to us or to an acquisition of a controlling interest, or if our disinterested stockholders do not confer voting rights in the control shares.
There can be no assurance, however, that we will be able to regain compliance with the Minimum Bid Price Requirement. Even if we do regain compliance, we may not be able to maintain compliance with the continued listing requirements for the Nasdaq Capital Market or our common stock could be delisted in the future.
Even if we do regain compliance, we may not be able to maintain compliance with the continued listing requirements for the Nasdaq Capital Market or our common stock could be delisted in the future.
Our ability to use net operating loss carryforwards and certain other tax attributes to offset future taxable income or taxes may be limited. Under current law, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited to 80% of taxable income.
Under current law, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating loss carryforwards in a taxable year is limited to 80% of taxable income in such year.
As a result of the termination of our COVID-19 study due to lack of patients in the ICUs, we were unable to demonstrate the effectiveness of our treatment countermeasures through controlled human efficacy studies in this U.S. study.
As a result of the termination of our COVID-19 study due to lack of patients in the ICUs, we were unable to demonstrate the effectiveness of our treatment countermeasures through controlled human efficacy studies in this U.S. study. Additionally, a change in government policies could impair our ability to obtain regulatory approval for the Hemopurifier.
In addition to experiencing a Security Breach, third parties may gather, collect, or infer Sensitive Information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. 31 Should our products be approved for commercialization, lack of third-party coverage and reimbursement for our devices could delay or limit their adoption.
In addition to experiencing a Security Breach, third parties may gather, collect, or infer Sensitive Information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Any of the previously identified or similar threats could cause a Security Breach or other interruption and disrupt our ability (and that of third parties upon whom we rely) to provide our services.
Vulnerabilities could be exploited and result in a security incident. 29 Any of the previously identified or similar threats could cause a Security Breach or other interruption and disrupt our ability and that of third parties with whom we work to provide our services.
If a clinical research organization that we utilize is unable to allocate sufficient qualified personnel to our studies in a timely manner or if the work performed by it does not fully satisfy the requirements of the FDA or other regulatory agencies, we may encounter substantial delays and increased costs in completing our development efforts.
For example, all of the key oversight responsibilities for the development and manufacture of our Hemopurifier are conducted by our management team, but all other activities are the responsibility of third-party vendors. 22 If a clinical research organization that we utilize is unable to allocate sufficient qualified personnel to our studies in a timely manner or if the work performed by it does not fully satisfy the requirements of the FDA or other regulatory agencies, we may encounter substantial delays and increased costs in completing our development efforts.
For any transaction involving a penny stock, unless exempt, the rules require: · that a broker or dealer approve a person’s account for transactions in penny stocks; · furnish the investor a disclosure document describing the risks of investing in penny stocks; · disclose to the investor the current market quotation, if any, for the penny stock; · disclose to the investor the amount of compensation the firm and its broker will receive for the trade; and · The broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. 42 In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: · obtain financial information and investment experience objectives of the person; and · make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
For any transaction involving a penny stock, unless exempt, the rules require: 40 · that a broker or dealer approve a person’s account for transactions in penny stocks; · furnish the investor a disclosure document describing the risks of investing in penny stocks; · disclose to the investor the current market quotation, if any, for the penny stock; · disclose to the investor the amount of compensation the firm and its broker will receive for the trade; and · The broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
Although breakthrough designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval. Although we obtained breakthrough device designation for the Hemopurifier for two indications, we may not experience faster development timelines or achieve faster review or approval compared to conventional FDA procedures.
Although we obtained breakthrough device designation for the Hemopurifier for two indications, we may not experience faster development timelines or achieve faster review or approval compared to conventional FDA procedures.
It is also likely that we will be required to issue a large amount of additional securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock plans. 44 Our officers and directors are entitled to indemnification from us for liabilities under our articles of incorporation, which could be costly to us and may discourage the exercise of stockholder rights.
It is also likely that we will be required to issue a large amount of additional securities to directors, officers, employees and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock plans.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe office, lab and manufacturing leases are coterminous with a remaining term of 48 months. The weighted average discount rate is 4.25%. As of our March 31, 2023 balance sheet, we have a right-of-use lease asset of $1,151,909.
Biggest changeThe current monthly base rent under the office and laboratory component of the lease is $14,158. The current monthly base rent under the manufacturing component of the lease is $12,452 The office, lab and manufacturing leases are coterminous with a remaining term of 36 months. The weighted average discount rate is 4.25%.
The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next four fiscal years. All of our leases conterminously expire during the fiscal year ending March 31, 2027.
As of our March 31, 2024 balance sheet, we have a right-of-use lease asset of $883,054. The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next three fiscal years. All of our leases conterminously expire during the fiscal year ending March 31, 2027.
Fiscal Year Ended March 31, 2024 $ 314,493 2025 323,812 2026 333,462 2027 343,351 Total minimum lease payments 1,315,118 Less amount representing imputed interest (106,090 ) Present value of minimum lease payments $ 1,209,028 Mobile Clean Room In addition, we rented a mobile clean room on a short term, month-to-month basis, where we housed our manufacturing operations until our permanent manufacturing space was completed.
Fiscal Year Ended March 31, 2025 323,812 2026 333,462 2027 343,352 Total minimum lease payments 1,000,626 Less amount representing imputed interest (60,310 ) Present value of minimum lease payments $ 940,316 46
Removed
The current monthly base rent under the office and laboratory component of the lease is $13,772. The current monthly base rent under the manufacturing component of the lease is $12,080.
Removed
During the fiscal year ended March 31, 2023, we recorded a $625,471 right-of-use lease asset and associated lease liability related to the manufacturing space component of the lease based on the present value of lease payments over the expected lease term of 55 months, discounted using our estimated incremental borrowing rate of 4.25%.
Removed
The mobile clean room was located on leased land near our office and lab and we paid $2,000 per month for the right to locate it there. We paid approximately $168,171 in total rent expense to lease the mobile clean room located on this space during the fiscal year ended March 31, 2023.
Removed
The arrangement was terminated in September 2022 and the mobile clean room was returned to the vendor that leased it to us. Overall, our rent expense, which is included in general and administrative expenses, approximated $519,000 and $401,000 for the fiscal years ended March 31, 2023 and 2022, respectively.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We may be involved from time to time in various claims, lawsuits, and/or disputes with third parties or breach of contract actions incidental to the normal course of our business operations. We are currently not involved in any litigation or any pending legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 47 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS We may be involved from time to time in various claims, lawsuits, and/or disputes with third parties or breach of contract actions incidental to the normal course of our business operations. We are currently not involved in any litigation or any pending legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePreviously, our common stock was quoted on the OTCQB Marketplace under the trading symbol “AEMD.” Holders of Record There were approximately 68 record holders of our common stock at June 26, 2023. The number of registered stockholders includes any beneficial owners of common shares held in street name.
Biggest changePreviously, our common stock was quoted on the OTCQB Marketplace under the trading symbol “AEMD.” Holders of Record There were approximately 62 record holders of our common stock at June 25, 2024. The number of registered stockholders includes any beneficial owners of common shares held in street name.
Recent Sales of Unregistered Securities The Company did not have any sales of unregistered securities for the period covered by this Annual Report. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. ITEM 6. [RESERVED] 48
Recent Sales of Unregistered Securities The Company did not have any sales of unregistered securities for the period covered by this Annual Report. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThis revenue resulted from work performed under our government contracts with the NIH and our subaward with the University of Pittsburgh as follows: Fiscal Year Ended 3/31/23 Fiscal Year Ended 3/31/22 Change in Dollars Phase 2 Melanoma Cancer Contract $ 574,245 $ 229,698 $ 344,547 Subaward with University of Pittsburgh – 64,467 (64,467 ) Total Government Contract and Grant Revenue $ 574,245 $ 294,165 $ 280,080 We have recognized revenue under the following contracts/grants: Phase 2 Melanoma Cancer Contract On September 12, 2019, the NCI awarded to us the Award Contract.
Biggest changeFor the fiscal year ended March 31, 2023, we recorded government contract revenue of $574,245 resulting from work performed under our government contract Phase 2 Melanoma Cancer with NIH. Phase 2 Melanoma Cancer Contract On September 12, 2019, the NCI awarded to us the Award Contract.
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.
These 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 are not obligated to make any sales of the 2022 ATM Shares under the 2022 ATM Agreement. The offering of the 2022 ATM Shares pursuant to the 2022 ATM Agreement will terminate upon the termination of the 2022 ATM Agreement by Wainwright or us, as permitted therein.
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 FDA has designated the Hemopurifier as a “Breakthrough Device” for two independent indications: · the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy, and with cancer types in which exosomes have been shown to participate in the development or severity of the disease; and · the treatment of life-threatening viruses that are not addressed with approved therapies.
The 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.
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.
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.
Wainwright & Co., LLC, or Wainwright. 52 2022 At The Market Offering Agreement with H.C.
Wainwright & Co., LLC, or Wainwright. 2022 At The Market Offering Agreement with H.C.
Under Single Patient Emergency Use regulations, the Company has treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
Under Single Patient Emergency Use regulations, Aethlon has treated two patients with COVID-19 with the Hemopurifier, in addition to the COVID-19 patient treated with our Hemopurifier in our COVID-19 clinical trial discussed above.
The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current non-employee directors then serving on the Board and for a grant of stock options or $75,000 worth of RSUs for a newly elected director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $1.46 per share as of April 1, 2022.
The 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 $1.52 per share for the April 2024 RSU grants.
That study was designed to enroll up to 40 subjects at up to 20 centers in the United States. Subjects had to have an established laboratory diagnosis of COVID-19, be admitted to an intensive care unit, or ICU, and have acute lung injury and/or severe or life-threatening disease, among other criteria.
That study was designed to enroll up to 40 subjects at up to 20 centers in the United States. Subjects were to have established laboratory diagnosis of COVID-19, be admitted to an ICU and have acute lung injury and/or severe or life-threatening disease, among other criteria.
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 SEC and declared effective on October 21, 2021.
The offering was registered under the Securities Act pursuant to our shelf registration statement on Form S-3 (Registration Statement No. 333-259909), as previously filed with the SEC and declared effective on October 21, 2021.
The full extent to which inflation, recent bank failures and the war in Ukraine will impact our business, results of operations, financial condition, clinical trials and preclinical research will depend on future developments, as well as the economic impact on national and international markets that are highly uncertain.
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.
Future capital requirements will depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical programs, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, the time and costs involved in obtaining regulatory approvals, competing technological and market developments, as well as our ability to establish collaborative arrangements, effective commercialization, marketing activities and other arrangements.
We expect our rent payments to continue to increase for the foreseeable future. 53 Future capital requirements will depend upon many factors, including progress with pre-clinical testing and clinical trials, the number and breadth of our clinical programs, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, the time and costs involved in obtaining regulatory approvals, competing technological and market developments, as well as our ability to establish collaborative arrangements, effective commercialization, marketing activities and other arrangements.
We currently are experiencing a disruption in our Hemopurifier supply, as our existing supply of Hemopurifiers expired on September 30, 2022, and as previously disclosed, we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.
We previously reported a disruption in our Hemopurifier supply, as our then existing supply of Hemopurifiers expired on September 30, 2022 and, also as previously disclosed, we are dependent on FDA approval of qualified suppliers to manufacture our Hemopurifier.
In the fiscal year ended March 31, 2023, we raised approximately $8,927,000 from the issuance of common stock, which was partially offset by the use of approximately $12,000 to pay for the tax withholding on the issuance of restricted stock units, or RSUs.
During the fiscal year ended March 31, 2023, we raised $8,927,211 from the issuance of common stock, which was partially offset by the use of approximately $12,000 to pay for the tax withholding on the issuance of RSUs.
The Director Compensation Policy provides for a grant of stock options or $50,000 worth of RSUs at the beginning of each fiscal year for current directors then serving on the Board, and for a grant of stock options or $75,000 worth of RSUs for a newly elected director, with each RSU priced at the average for the closing prices for the five days preceding and including the date of grant, or $0.43 per share for the April 2023 RSU grants.
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 $1.52 per share for the RSUs granted in April 2024.
Net Cash Used in Investing Activities During the fiscal years ended March 31, 2023 and 2022, we purchased approximately $943,000 and $349,000 of equipment, respectively. Net Cash from Financing Activities Net cash generated from financing activities decreased from approximately $17,368,000 in the fiscal year ended March 31, 2022 to approximately $8,915,000 in the fiscal year ended March 31, 2023.
Net Cash Used in Investing Activities During the fiscal years ended March 31, 2024 and 2023, we purchased approximately $251,000 and $943,000 of equipment, respectively. Net Cash from Financing Activities Net cash generated from financing activities decreased from approximately $8,915,000 in the fiscal year ended March 31, 2023 to approximately $1,288,000 in the fiscal year ended March 31, 2024.
In the fiscal year ended March 31, 2023, we raised net proceeds of $8,927,211, net of $229,610 in commissions to Wainwright and $27,153 in other offering expense, through the sale of 7,480,836 shares of our common stock at an average price of $1.19 per share under the 2022 ATM Agreement.
Financings During the Fiscal Year Ended March 31, 2023: During the fiscal year ended March 31, 2023, we raised aggregate net proceeds of $8,927,211, net of $229,610 in commissions to Wainwright and $27,153 in other offering expense, through the sale of 748,084 shares of our common stock at an average price of $11.93 per share under the 2022 ATM Agreement.
Our intended transition to a new supplier for galanthus nivalis agglutinin, or GNA, a component of our Hemopurifier, is delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing change.
Our intended transition to a new supplier for GNA, a component of our Hemopurifier, continues to be delayed as we work with the FDA for approval of our supplement to our IDE, which is required to make this manufacturing supplier change. We are working with the FDA to qualify this second supplier of our GNA.
We filed a prospectus supplement, dated March 24, 2022, with the SEC that provides for the sale of shares of our common stock having an aggregate offering price of up to $15,000,000, or the 2022 ATM Shares.
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.
Due to lack of further patient enrollment, we and UPMC terminated this trial. In January 2023, we entered into an agreement with North American Science Associates, LLC, or NAMSA, a world leading MedTech CRO offering global end-to-end development services, to oversee our clinical trials investigating the Hemopurifier for oncology indications.
In January 2023, we entered into an agreement with North American Science Associates, LLC, or NAMSA, a world leading medical technology CRO offering global end-to-end development services, to oversee our planned clinical trials investigating the Hemopurifier for oncology indications.
RSU Grants In April 2023, the Compensation Committee approved, pursuant to the terms of the Director Compensation Policy, the grant of the annual RSUs under the Director Compensation Policy to each of the three non-employee directors of the Company then serving on the Board.
On April 16, 2024, 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.
In addition to the foregoing, we are monitoring closely the impact of inflation, recent bank failures, and the war in Ukraine on our business. Given the level of uncertainty regarding the duration and impact of these events on capital markets and the U.S. economy, we are unable to assess the impact on our timelines and future access to capital.
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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The following discussion and analysis should be read in conjunction with the consolidated Financial Statements and Notes thereto appearing elsewhere in this Annual Report. We are a medical therapeutic company focused on developing products to treat cancer and life-threatening infectious diseases.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The following discussion and analysis should be read in conjunction with the consolidated Financial Statements and Notes thereto appearing elsewhere in this Annual Report. 48 We are a medical therapeutic company focused on developing the Hemopurifier, a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections and for use in organ transplantation.
In several cases, these studies were conducted in collaboration with leading government or non-government research institutes. 49 On June 17, 2020, the FDA approved a supplement to our open IDE for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19, or COVID-19, in a New Feasibility Study.
On June 17, 2020, the FDA approved a supplement to our open Investigational Device Exemption, or IDE, for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19, or COVID-19, in a new feasibility study.
Cash Flows Cash flows from operating, investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized as follows (in thousands): For the year ended March 31, 2023 March 31, 2022 Cash (used in) provided by: Operating activities $ (10,505 ) $ (9,767 ) Investing activities (943 ) (349 ) Financing activities 8,915 17,368 Net (decrease) increase in cash $ (2,533 ) $ 7,252 Net Cash Used in Operating Activities We used cash in our operating activities due to our losses from operations.
Cash Flows Cash flows from operating, investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized as follows (in thousands): For the year ended March 31, 2024 March 31, 2023 Cash (used in) provided by: Operating activities $ (10,130 ) $ (10,505 ) Investing activities (251 ) (943 ) Financing activities 1,288 8,915 Effect of exchange rate on cash 2 (6 ) Net decrease in cash $ (9,091 ) $ (2,539 ) 54 Net Cash Used in Operating Activities We used cash in our operating activities due to our losses from operations.
As a result, in April 2023 the three eligible directors each was granted an RSU in the amount of 116,279 shares under the 2020 Plan.
As a result, in April 2024 the four eligible directors were each granted an RSU in the amount of 32,894 shares under the 2020 Plan.
We are currently working with our new contract research organization, or CRO, on preparations to conduct a clinical trial in Australia in patients with solid tumors, including head and neck cancer, gastrointestinal cancers and other cancers.
In October 2022, we formed a wholly-owned subsidiary in Australia to initially conduct oncology-related clinical research, then seek regulatory approval and commercialize our Hemopurifier in Australia. We are currently working with our contract research organization, or CRO, on preparations to conduct a clinical trial in Australia in patients with solid tumors, including head and neck cancer, and gastrointestinal cancers.
Our common stock is listed on the Nasdaq Capital Market under the symbol “AEMD.” Fiscal Years Ended March 31, 2023 and 2022 Results of Operations Government Contract Revenues We recorded government contract revenue in the fiscal years ended March 31, 2023 and 2022.
Our common stock is listed on the Nasdaq Capital Market under the symbol “AEMD.” Fiscal Years Ended March 31, 2024 and 2023 Results of Operations Government Contract Revenues For the fiscal year ended March 31, 2024, we did not have any active revenue-generating government contracts and, consequently, did not record any government contract revenue for that period.
The Award Contract amount was $1,860,561 and, as amended, ran for the period from September 16, 2019 through September 15, 2022. The work performed pursuant to this Award Contract was focused on melanoma exosomes.
The Award Contract amount was $1,860,561 and, as amended, ran for the period from September 16, 2019 through September 15, 2022. We presented the required final report to the NCI.
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 more recently will help protect the proprietary nature of the Hemopurifier treatment technology.
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 will continue to need to raise additional capital either through equity and/or debt financing for the foreseeable future. 54 As a result of the COVID-19 pandemic and actions taken to slow its spread, global events, political changes, bank failures, actual or perceived changes in interest rates and economic inflation, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation and uncertainty about economic stability.
As a result of global events, political changes, bank failures, actual or perceived changes in interest rates and economic inflation, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation and uncertainty about economic stability.
As a result of the above factors, our net loss before noncontrolling interests increased to $12,029,786 for the fiscal year ended March 31, 2023, from $10,420,885 for the fiscal year ended March 31, 2022. Liquidity and Capital Resources As of March 31, 2023, we had a cash balance of $14,532,943 and working capital of $13,585,477.
As a result of the above factors, our net loss increased to $12,208,174 for the fiscal year ended March 31, 2024, from $12,029,786 for the fiscal year ended March 31, 2023. Liquidity and Capital Resources As of March 31, 2024, we had a cash balance of $5,441,978 and working capital of $4,395,889.
We expect to continue to incur increasing negative cash flows and net losses for the foreseeable future.
We expect to continue to incur increasing negative cash flows and net losses for the foreseeable future. We will continue to need to raise additional capital either through equity and/or debt financing for the foreseeable future.
We believe the Hemopurifier can be a substantial advance in the treatment of patients with advanced and metastatic cancer through the clearance of exosomes that promote the growth and spread of tumors through multiple mechanisms.
Oncology We believe the Hemopurifier may be a substantial advancement in the treatment of patients with advanced and metastatic cancer through its design to bind to and remove harmful exosomes and exosomal particles that promote the growth and spread of tumors.
In the fiscal year ended March 31, 2022, we raised aggregate net proceeds under the 2021 ATM Agreement described above of $4,947,785, net of $126,922 in commissions to Wainwright and $2,154 in other offering expense, through the sale of 626,000 shares of our common stock at an average price of $7.90 per share of net proceeds.
Financings During the Fiscal Year Ended March 31, 2024: 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 296,056 shares of our common stock at an average price of $4.47 per share under the 2022 ATM Agreement.
Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com.
Our executive offices are located at 11555 Sorrento Valley Road, Suite 203, San Diego, California 92121. Our telephone number is (619) 941-0360. Our website address is www.aethlonmedical.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this Annual Report.
In the fiscal year ended March 31, 2022, we raised approximately $17,456,000 from the issuance of common stock, which was partially offset by the use of approximately $88,000 to pay for the tax withholding on the issuance of RSUs. 55 Critical Accounting Policies and Significant Judgments and Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, 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.
Critical Accounting Policies and Significant Judgments and Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, 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.
We also obtained ERB approval and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India, for a COVID-19 clinical trial at that location. One patient has completed participation in the Indian COVID-19 study.
We also obtained ethics review board, or ERB, approval from and entered into a clinical trial agreement with Medanta Medicity Hospital, a multi-specialty hospital in Delhi NCR, India, for a COVID-19 clinical trial at that location. We now have two sites in India for this trial with the Medanta Medicity Hospital and Maulana Azad Medical College, or MAMC.
We also believe the Hemopurifier can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already approved treatment. 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.
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.
The $1,757,833 increase in the fiscal year ended March 31, 2023 was due to increases in general and administrative expense of $1,026,081 and professional fees of $914,002, which were partially offset by a decrease in payroll and related expenses of $182,250.
The $163,685 increase in the fiscal year ended March 31, 2024 was due to an increase in payroll and related expenses of $762,899 partially offset by a decrease of $578,112 in general and administrative expenses and a decrease of $21,102 in professional fees.
We analyze such warrants for classification as either equity or derivative liabilities and value them based on binomial lattice models. Share-based Compensation We account for share-based compensation awards using the fair-value method and record such expense based on the grant date fair value in the consolidated financial statements over the requisite service period.
Share-based Compensation We account for share-based compensation awards using the fair-value method and record such expense based on the grant date fair value in the consolidated financial statements over the requisite service period. 55 RSU Grants to Non-Employee Directors The Company maintains the Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, which provides for cash and equity compensation for persons serving as non-employee directors of the Company.
Pursuant to the agreement, NAMSA will manage our clinical trials of the Hemopurifier for patients in the United States and Australia with various types of cancer tumors. We anticipate that the initial clinical trials will begin in Australia.
Pursuant to the agreement, NAMSA agreed to manage our planned clinical trials of the Hemopurifier for patients in the United States and Australia with various types of cancer tumors. We recently completed an in vitro binding study of relevant oncology targets, to provide pre-clinical evidence to support our trial design and translational endpoints.
The relevant authorities in India have accepted the use of the Hemopurifiers made with the GNA from our new supplier. In May 2023, we also received ERB approval from the Maulana Azad Medical College, or MAMC, for a second site for our clinical trial in India to treat severe COVID-19.
In May 2023, we received ERB approval from the MAMC, for a second site for our clinical trial in India to treat severe COVID-19. MAMC was established in 1958 and is located in New Delhi, India.
In September 2022, the Board of Directors of ESI and we, as the majority stockholder of ESI, approved the dissolution of ESI. 50 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.
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.
Those increases in clinical trial expenses include the cost of manufacturing additional Hemopurifiers for the planned clinical trials. In addition, we have entered into leases for our new headquarters, laboratory and manufacturing facilities. As noted above in the results of operations, our rent expense increased by $117,772 in the fiscal year ended March 31, 2023.
Material Cash Requirements We expect our clinical trial expenses for the planned oncology trials in Australia and India to increase for the foreseeable future. Those increases in clinical trial expenses include the cost of manufacturing additional Hemopurifiers. In addition, we have entered into leases for our headquarters, laboratory and manufacturing facilities.
Net cash used in operating activities was approximately $10,505,000 in fiscal 2023, compared to net cash used in operating activities of approximately $9,767,000 in fiscal 2022, an increase of approximately $738,000. The primary factors in this $738,000 increase in cash used in operations in fiscal 2023 was a $1,613,695 increase in our net loss.
Net cash used in operating activities was approximately $10,130,000 in fiscal 2024, compared to net cash used in operating activities of approximately $10,505,000 in fiscal 2023, a decrease of approximately $375,000.
The RSUs were subject to vesting in three installments, 50% on September 30, 2022, and 25% on each of December 31, 2022, and March 31, 2023, subject to the recipient's continued service with the Company on each such vesting date.
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.
The Compensation Committee of the Board of Directors of the Company, or Compensation Committee, approved, effective as of April 1, 2022, pursuant to the terms of the Company’s Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, the grant of the annual RSUs to each of the two non-employee directors of the Company then serving on the Board of Directors of the Company, or Board, and the grant of an RSU for the then newly appointed director.
In June 2024, holders of Class A and Class B warrants exercised 295,000 shares and 2,875,000 shares, respectively, for total proceeds of $1,838,600. 56 RSU Grants In April 2024, 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.
Endpoints for this study, in addition to safety, included reduction in circulating virus as well as clinical outcomes (NCT # 04595903). In June 2022, the first patient in this study was enrolled and completed the Hemopurifier treatment phase of the protocol. Due to lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022.
Endpoints for this study, in addition to safety, included reduction in circulating virus, as well as clinical outcomes (NCT # 04595903).
The $1,026,081 increase in the fiscal year ended March 31, 2023 in our general and administrative expense was due to an increase in manufacturing and research and development supplies of $411,211 related to the manufacture of the Hemopurifier device and various research and development activities.
These decreases were partially offset by an increase of $404,918 in manufacturing and research and development supplies related to the manufacturing of our Hemopurifier device and various research and development activities.
Our objective is to confirm that the Hemopurifier, in our translational studies, when incorporated into a machine perfusion organ preservation circuit, can remove harmful viruses and exosomes from harvested organs. We have previously demonstrated the removal of multiple viruses and exosomes from buffer solutions, in vitro, utilizing a scaled-down version of our Hemopurifier.
We have previously demonstrated the removal of multiple viruses and exosomes and exosomal particles from buffer solutions, in vitro , utilizing a scaled-down version of our Hemopurifier and believe this process could reduce transplantation complications by improving graft function, reducing graft rejection, maintaining or improving organ viability prior to transplantation, and potentially reducing the number of kidneys rejected for transplant.
MAMC was established in 1958 and is located in New Delhi, India. MMAC is affiliated with the University of Delhi and is operated by the Delhi government. We also recently announced that we also have begun investigating the use of our Hemopurifier in the organ transplant setting.
MAMC is affiliated with the University of Delhi and is operated by the Delhi government. 50 Organ Transplantation Additionally, based on preclinical data with acellular kidney perfusates, we believe that the Hemopurifier has potential applications in organ transplantation.
Removed
The Aethlon Hemopurifier is a clinical-stage immunotherapeutic device designed to combat cancer and life-threatening viral infections. In cancer, the Hemopurifier is designed to deplete the presence of circulating tumor-derived exosomes that promote immune suppression, seed the spread of metastasis and inhibit the benefit of leading cancer therapies.
Added
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.
Removed
On October 4, 2019, the FDA approved our Investigational Device Exemption, or IDE, application to initiate an Early Feasibility Study, or EFS, of the Hemopurifier in patients with head and neck cancer in combination with standard of care pembrolizumab (Keytruda).
Added
This action has potential applications in cancer, where exosomes and exosomal particles may promote immune suppression and metastasis, and in life-threatening infectious diseases.
Removed
The primary endpoint for the EFS, designed to enroll 10 to 12 subjects at a single center, is safety, with secondary endpoints including measures of exosome clearance and characterization, as well as response and survival rates. This clinical trial, initially conducted at the UPMC Hillman Cancer Center in Pittsburgh, PA, or UPMC, treated two patients.
Added
Our study indicated positive results from this study, providing evidence that our Hemopurifier removes extracellular vesicles, or EVs, from plasma.
Removed
In October 2022, we launched a wholly owned subsidiary in Australia, formed to conduct clinical research, seek regulatory approval and commercialize our Hemopurifier in that country. The subsidiary will initially focus on oncology trials in Australia.
Added
This translational study provides pre-clinical evidence to support our planned phase 1 safety, feasibility and dose-finding clinical trials of our Hemopurifier in patients with solid tumors who have stable or progressive disease during anti-PD-1 monotherapy treatment, such as Keytruda® or Opdivo®.
Removed
This process potentially may reduce complications following transplantation of the harvested organ, which can include viral infection, delayed graft function and rejection. We believe this new approach could be additive to existing technologies that currently are in place to increase the number of viable organs for transplant.
Added
In addition to an interested initial trial site in India, we had three interested sites in Australia that were awaiting our completion of this in vitro binding study.
Removed
Previously we were the majority owner of ESI a company formed to focus on the discovery of exosomal biomarkers to diagnose and monitor life-threatening diseases, and thus consolidated ESI in our consolidated financial statements. For more than four years, the primary activities of ESI were limited to the payment of patent maintenance fees and applications.
Added
We added the data from this study to our Clinical Investigator Brochure and submitted that brochure to the Ethics Committee of Royal Adelaide Hospital in Australia and in June 2024, we received approval for our proposed phase 1 oncology trial from the Ethics Committee from Royal Adelaide Hospital.
Removed
This work followed from our completion of a Phase I contract for the Topic 359 solicitation that ran from September 2017 through June 2018, as described below. Following on the Phase I work, the deliverables in the Phase II program involved the design and testing of a pre-commercial prototype of a more advanced version of the exosome isolation platform.
Added
We are currently in the process of applying to the Ethics Committees of the two additional interested clinical trial sites in Australia and the site in India. Life-Threatening Viral Infections We also believe that the Hemopurifier can be part of the broad-spectrum treatment of life-threatening highly glycosylated, or carbohydrate coated, viruses that are not addressed with an already approved treatment.
Removed
The Award Contract ended on September 15, 2022 and we presented the required final report to the NCI.
Added
In several cases, these studies were conducted in collaboration with leading government or non-government research institutes. 49 We believe the Hemopurifier can be part of the treatment of severe SARS-CoV-2 viremia/COVID-19, or COVID-19, cases.
Removed
As the NCI completed its close out review of the contract, we recognized as revenue the $574,245 previously recorded as deferred revenue on our December 31, 2022 balance sheet. 51 Subaward with University of Pittsburgh In December 2020, we entered into a cost reimbursable subaward arrangement with the University of Pittsburgh in connection with an NIH contract entitled “Depleting Exosomes to Improve Responses to Immune Therapy in HNNCC.” Our share of the award was $256,750.
Added
COVID viremia is detected in approximately 34% of patients and is associated with severity, requirement for intensive care unit, or ICU, stay, development of multi-organ failure and poor outcomes. EVs and exosomal miRNAs may play a role in the spread of infection as well as ongoing inflammation, development of coagulopathy and lung injury.
Removed
We did not record revenue related to this subaward in the fiscal year ended March 31, 2023. We recorded $64,467 of revenue related to this subaward in the fiscal year ended March 31, 2022.
Added
Our proprietary Galanthus nivalis agglutinin, or GNA, affinity resin has been shown to bind multiple clinically relevant SARS-CoV-2 variants. Furthermore, studies have demonstrated in vitro removal of seven SARS-CoV2 variants (104 PFU/mL) in phosphate buffered saline passed over a column of GNA affinity resin (1g) three times, with capture efficiencies between 53% and 89%.
Removed
In October 2022, we agreed with the University of Pittsburgh to terminate the subaward arrangement, effective as of November 10, 2022, since it related to our clinical trial in head and neck cancer in which the University of Pittsburgh was unable to recruit patients.
Added
In January 2021, the Hemopurifier was used to treat a viremic patient, under our emergency use approval, with a predicted risk of mortality of 80% and the Hemopurifier was able to reduce the patient’s SARS-CoV-2 plasma viral load by 58.4%. In June 2022, the first patient in this study was enrolled and completed the Hemopurifier treatment phase of the protocol.
Removed
There are no provisions in the subaward arrangement requiring repayment of cash received for work completed through November 10, 2022. Operating Costs and Expenses Consolidated operating expenses were $12,472,883 for the fiscal year ended March 31, 2023, compared to $10,715,050 for the fiscal year ended March 31, 2022, an increase of $1,757,833.
Added
Due to the lack of COVID-19 patients in the ICUs of our trial sites, we terminated this study in 2022. However, our IDE for this indication remains open, as we have an active COVID-19 trial in India and wish to preserve the option of enrolling patients if the situation with COVID-19 changes.
Removed
Other increases included, $146,962 in subcontract expense related to revenue recognized from contracts and grants with the NIH, $154,608 associated with the close out of the US COVID-19 clinical trial, $103,602 associated with our Australian subsidiary and launch of our oncology clinical trial in Australia, $117,772 in rent expense related to the addition of the manufacturing suite in fiscal year 2023 and a full year of rent for our office and laboratory space, $117,207 in depreciation and amortization expense associated with leasehold improvements to our manufacturing space and $93,510 in D&O and medical insurance.
Added
We recently completed final testing in order to begin manufacturing Hemopurifiers at our new manufacturing facility in San Diego, California for use in planned U.S. clinical trials, using GNA from our current supplier.
Removed
We also had an increase in our utility expense of $31,924, largely as the result of our increased space under lease. These increases were offset by decreases in outside services of $65,377, laboratory fees of $61,258 and decreases in office supplies and equipment of $32,154.
Added
In April 2024, we received a notice of approval from the FDA for our IDE supplement to add our San Diego manufacturing facility and we now are able to manufacture Hemopurifiers at this site. We also have sufficient Hemopurifiers on hand for use in our planned Australia and India oncology trials.

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