Aethlon Medical(AEMD) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements The company reported a net loss of $1.76 million for the quarter ended June 30, 2025, an improvement from a $2.57 million loss in the prior-year period, primarily due to lower operating expenses, with total assets decreasing to $5.3 million from $7.4 million and net cash used in operating activities approximately $1.7 million, while also highlighting a 1-for-8 reverse stock split and substantial doubt about its ability to continue as a going concern Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $5.31 million, a decrease from $7.36 million on March 31, 2025, primarily driven by a reduction in cash and cash equivalents from $5.50 million to $3.77 million, while total liabilities decreased to $1.88 million from $2.24 million and total stockholders' equity fell from $5.12 million to $3.42 million over the same period Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 ($) | March 31, 2025 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,765,154 | $5,501,261 | | Total current assets | $4,050,858 | $5,949,800 | | Total assets | $5,306,002 | $7,359,534 | | Liabilities & Equity | | | | Total current liabilities | $1,627,437 | $1,899,286 | | Total liabilities | $1,882,489 | $2,236,004 | | Total stockholders' equity | $3,423,513 | $5,123,530 | | Total liabilities and stockholders' equity | $5,306,002 | $7,359,534 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, the company reported a net loss of $1.76 million, or ($0.85) per share, a reduction from the net loss of $2.57 million, or ($2.76) per share, in the same period of 2024, driven by a significant decrease in total operating expenses to $1.79 million from $2.62 million year-over-year Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Total operating expenses | $1,792,390 | $2,620,858 | | Operating Loss | ($1,792,390) | ($2,620,858) | | Net Loss | ($1,761,858) | ($2,571,440) | | Basic and diluted net loss per share | ($0.85) | ($2.76) | | Weighted average shares outstanding | 2,076,416 | 932,248 | Condensed Consolidated Statements of Cash Flows For the three months ended June 30, 2025, net cash used in operating activities was $1.71 million, comparable to the $1.75 million used in the prior-year period, with minimal net cash used in financing activities at $5,357, a stark contrast to the $5.38 million provided by financing activities in the same quarter of 2024, resulting in a total cash position decrease of $1.74 million Cash Flow Summary (Unaudited) | Activity | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,714,937) | ($1,747,537) | | Net cash (used in) provided by financing activities | ($5,357) | $5,379,229 | | Net (decrease) increase in cash | ($1,735,790) | $3,630,402 | | Cash, cash equivalents and restricted cash at end of period | $3,863,284 | $9,159,885 | Notes to Condensed Consolidated Financial Statements The notes detail the company's focus on the Hemopurifier® for cancer and viral infections, with an ongoing Phase 1 oncology trial in Australia, a 1-for-8 reverse stock split in June 2025, and crucially, substantial doubt about the company's ability to continue as a going concern due to insufficient cash to fund operations for the next twelve months - The company is focused on developing the Hemopurifier® for cancer and life-threatening viral infections, with the FDA granting it "Breakthrough Device" designation for two indications[18][23] - A Phase 1 oncology trial is underway in Australia, with three participants treated in the first cohort showing no safety concerns, and enrollment for the second cohort is open, while a planned trial in India was canceled to conserve resources[19][20][21] - A 1-for-8 reverse stock split was effected on June 9, 2025, with all share and per-share amounts retroactively adjusted[29][43] - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern, as existing cash is not sufficient to fund operations for at least twelve months[32] Research and Development Expenses | Period | R&D Expense ($) | | :--- | :--- | | Three months ended June 30, 2025 | $524,368 | | Three months ended June 30, 2024 | $414,658 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on the Hemopurifier® and the progress of its Phase 1 oncology trial in Australia, noting the strategic decision to cancel a similar trial in India to conserve capital, leading to a 31.6% decrease in operating expenses and a reduced net loss of $1.76 million, but highlighting major liquidity concerns with only $3.8 million in cash, raising substantial doubt about its ability to continue as a going concern Overview The company is a medical therapeutic firm developing the Hemopurifier®, a clinical-stage device for cancer and viral infections, with primary focus on a Phase 1 oncology trial in Australia, which is now enrolling for its second cohort after the initial cohort showed a favorable safety profile, while also conducting pre-clinical research for new applications - The company's primary clinical development priority is the ongoing Phase 1 oncology trial in Australia for the Hemopurifier®[77][78][79] - A strategic decision was made to discontinue efforts for a clinical trial in India to conserve resources and focus on the Australian trial[79] - Pre-clinical research continues to explore new applications, including a study on removing platelet-derived extracellular vesicles, which showed >98% removal from human plasma in a simulated session[82] Results of Operations For the quarter ended June 30, 2025, operating expenses decreased by $828,468 (31.6%) to $1.79 million compared to the prior-year period, mainly due to a $673,802 reduction in payroll and related expenses, a $138,050 decrease in professional fees, and a $16,616 drop in general and administrative costs, consequently improving the net loss to $1.76 million from $2.57 million year-over-year Operating Expenses Comparison (Q2 2025 vs Q2 2024) | Expense Category | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Payroll and related | $581,000 | $1,254,802 | ($673,802) | (53.7%) | | Professional fees | $476,032 | $614,082 | ($138,050) | (22.5%) | | General and administrative | $735,358 | $751,974 | ($16,616) | (2.2%) | | Total Operating Expenses | $1,792,390 | $2,620,858 | ($828,468) | (31.6%) | - The decrease in payroll expenses was primarily due to the absence of a $320,604 severance accrual from the prior year and lower compensation costs from reduced headcount[88] - Net loss decreased to $1.76 million from $2.57 million in the prior-year quarter[92] Liquidity and Capital Resources As of June 30, 2025, the company had a cash balance of $3.77 million and working capital of $2.42 million, but management explicitly states this cash is not sufficient to fund operations for the next twelve months, creating substantial doubt about its ability to continue as a going concern and requiring significant additional financing to sustain operations and clinical trials - The company does not expect its existing cash of $3.77 million (as of June 30, 2025) to be sufficient to fund operations for at least the next twelve months[93] - The company must obtain significant additional financing to sustain working capital and fund planned clinical trials[94] Cash Flow Summary (in thousands) | Activity | For the three months ended June 30, 2025 ($ in thousands) | For the three months ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | | Operating activities | $(1,715) | $(1,748) | | Investing activities | – | – | | Financing activities | (5) | 5,379 | Quantitative and Qualitative Disclosures About Market Risk The company is not required to provide this information as it qualifies as a smaller reporting company - As a smaller reporting company, Aethlon Medical is not required to provide the information for this item[106] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the quarter, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[109] - No material changes to internal control over financial reporting occurred during the quarter[110] PART II. OTHER INFORMATION Legal Proceedings The company reports that it is not currently a party to any pending or threatened legal proceedings - The company is not presently a party to any pending or threatened legal proceedings[112] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K, with key risks including a history of significant losses, the need for additional financing, reliance on third-party suppliers, potential for technology obsolescence, extensive regulation, and risks related to maintaining its Nasdaq listing - There have been no material changes to the risk factors previously disclosed in the Annual Report for the fiscal year ended March 31, 2025[114] - Principal risks include: history of significant losses, need for additional financing, reliance on third-party suppliers, potential technology obsolescence, regulatory hurdles, and maintaining Nasdaq listing compliance[113] Unregistered Sales of Equity Securities and Use of Proceeds The company did not issue or sell any unregistered securities during the three-month period ended June 30, 2025 - No unregistered securities were issued or sold during the three months ended June 30, 2025[115] Other Information During the quarter ended June 30, 2025, none of the company's directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement - No directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter[118] Exhibits This section lists the exhibits filed as part of the quarterly report, including corporate governance documents, forms of securities, and officer certifications