Aethlon Medical, Inc. Stock

Good day, and welcome to the Aethlon Medical First Quarter Fiscal 2027 Earnings and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jim Frakes, CEO and CFO of Aethlon Medical. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's First Fiscal Quarter ended June 30, 2026 Earnings Conference Call. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Athlon Medical. At 4:15 p.m. Eastern Time today, Athlon Medical released financial results for its first fiscal quarter ended June 30, 2026.

If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at athlonmedical.com to view it. Following this introduction and the reading of the company's forward-looking statement disclaimer, Dr. Stephen LaRosa, our Chief Medical Officer; and I will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session.

Before we start the business portion of the call, please note that the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call.

Such forward-looking statements are subject to significant risks and uncertainties and and actual results may differ materially from the results anticipated in the forward-looking statements. Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption Risk Factors in the company's annual report on Form 10-K for the fiscal year ended March 31, 2026. The company's most recent quarterly report on Form 10-Q and in the company's other filings with the Securities and Exchange Commission.

Except as may be required by law, the company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances. I'd like to begin by highlighting progress during the first fiscal quarter ended June 30, as we continue to execute against our strategy of advancing the Hemopurifier platform while maintaining disciplined cost control.

During the period, we achieved important clinical research and intellectual property milestones. We continue to advance our oncology program while also expanding our evaluation of chemo purifier applications into additional disease areas through preclinical research.

As Steve will discuss, we are now in the final cohort of our oncology trial. We continue to generate encouraging preliminary biomarker observations, and we are expanding our research into potential applications beyond oncology. Taken together, we believe these achievements demonstrate continued execution against our key priorities of clinical development, platform expansion, intellectual property growth and disciplined resource management.

And now I will turn the call over to Dr. LaRossa, who will cover updates on the Australian oncology trial and then on our R&D efforts. Steve?

Thank you, Jim. Before discussing our clinical observation, I want to emphasize that the Hemopurifier remains an investigational device. Any biomarker observations discussed today are preliminary and are based on the limited number of participants and should not be interpreted as evidence of safety or effectiveness or clinical benefit. The first participated in our third and final cohort of our Australian oncology trial has been enrolled and treated. .

This participant received 3 4-hour HemoCue treatments over the course of a 1-week period. The participant is now 2 months into the follow-up period and has not experienced any device-related serious adverse events or dose-limiting consistency. We need to only treat 2 additional participants to complete the trial, provided that none of the future participants develop any of these safety events. The 3 investigative sites remain engaged and are actively prescreening potential participants. Our goal remains to complete all HP treatments and the 8-week follow-up central lab measurement period by the end of this year 2020. The next steps would the analysis of the data.

Clinical study report completion and preregistration clinical trial discussion with regulatory parties Central lab measurements of extracellular vesicles microRNAs and lymphocyte subsets have been completed by the University of Sydney on the samples from cohort 2 of the clinical trial, where participants received 2 4-hour chemopurified treatments over the course of 1 week. A review of the raw data has taken place. As stated in the press release on July 13, 2026. We continue to see decreases in total extracellular vesicle comps including tumor-derived to cellular vesicles, and microRNA linked to cancer progression following the HB treatment.

Additionally, we observed increases in lipid success as well as positive directional changes and laboratory permit ratios that have been associated with responses to immunotherapy. The changes appear to be more consistent across participants and persisted for longer in cohort 2 compared with cohort 1, where participants received a single hemophurifiine treatment, independent formal statistical analysis, including a dose response analysis will be performed upon completion of the trial. Segue now to preclinical R&D activities. Our prior work in Long cove was published in the Preview Journal International Journal of Molecular Sciences on the 25 June 2026.

In this publication, we present data demonstrating that both small and large EV extractor vesicles in noncoded patient plasma samples bind to the proprietary G&A affinity resin within our Athlon Hemopurifier. Furthermore, following exposure of the patient plasma to the resin, a decrease in microRNAs associated with immune disregulation and inflammation was observed.

This data, coupled with the data from an outside group demonstrating the presence of the COVID spike protein and protein associated with inflammation and amoral clotting within the EVs of long cover patients, raises the possibility of EV removal as a potential parametal therapeutic strategy and Ronco. We plan discussions with academic institutions as well as regulatory agencies to see if there's a clinical development path forward or if additional preclinical work will be necessary. Finally, our lab continues to perform experiments exploring the ability of the Hemopurifier technology to bind to remove EVs implicated in other diseases, such as lupus and heart disease in those with chronic kidney disease.

With that, I'll turn the call back over to Jim for the financial discussion and the questions.

Thanks, Steve, and good afternoon, again, everyone. Let me turn briefly to our financial position and our focus on disciplined spending. At June 30, 2026, a we have approximately $4.9 million in cash and cash equivalents, providing resources to support ongoing clinical and research activities. Subsequent to quarter end, we further strengthened our balance sheet by raising approximately $4 million in gross proceeds through a public offering of common stock. Based on current plans, we believe our cash resources are sufficient to fund operations for at least the next 12 months.

Our consolidated operating expenses for the quarter decreased 11.9% and to approximately $1.6 million compared with $1.8 million in the prior year quarter. That decrease was driven by lower professional fees and reduced general and administrative and preclinical research costs and our operating loss declined accordingly. You will find additional detail on these expense changes in our 10-Q, which breaks down specific drivers by category. We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for June 30, 2026 and March 31, 2026.

The and the consolidated statements of operations for the fiscal quarters ended June 30, 2026 and 2025. We will file our quarterly report on Form 10-Q following this call. Our next earnings call for the fiscal second quarter ending September 30, 2026, will coincide with the filing of our quarterly report on Form 10-Q in November 2026, and now we would be happy to answer any questions that you may have. Operator, please open the call for questions.

[Operator Instructions]

The first question today comes from Marla Marin with Zacks.

So I want to go back to something, Steve, that you said in your prepared remarks. I want to make sure that I understood. So the 3 different cohorts of the Australia study, increase dosage, increase treatment with the hemopuriapier. And I think what you said was currently, even though it's early in terms of a full data set, you're thinking that Phase II participants exhibit a longer benefit than those who participated in Phase 1. Is that the right way to think about what your comments were .

Right. So in cohort 1, the participants received only a single 4-hour HP treatment in Cohort 2, they received to 4-hour treatment. So cohort 1 would be like on Friday 4 hours, whereas Cohort 2 would be Monday and Friday for 4 hours. All cohorts within had samples done before and after the Hemopurifier treatments and then weekly in the follow-up period for 4 weeks, so week 1, 2, 3, and 4 and 8. And we looked at EVs, T cells as well as microRNAs over the course of all those time points. When you look at the raw data, and again, this is based purely on observations of the raw data, this is now looking at change from baseline, percent change from baseline or formal statistical out.

If you look purely at the raw data, typically in Cohort 1, we were seeing changes in 2 out of 3 participants where in Cohort 2, we tended to see it more consistent across participants. And then if you look at the positive directional change in those parameters, where in Cohort 1, you see those changes go out, say, 2, 3 weeks. We're seeing more times in Cohort 2 where we're seeing the positive directional change go out as far as the 8-week time period. So at least what I can say is it looks like the biologic signal is more consistent across 3 participants in Cohort 2.

And then it seems the positive directional change seems to last long. So it really cohort 3 will follow the tail if we continue to see that kind of increased magnitude and change as well as duration of change that will tell us that what we've seen to date is real, but encourage nonetheless, by at least the signal and the raw data that we're seeing.

Got it. Got it. And you can't really comment yet on Cohort 3 because it's so early, correct?

Yes. We don't have any result. The first patient is like I said, just finish their 2-month or their 8-week follow-up period. So we don't have any data back yet on that patient in terms of the oral .

But let's say that the trajectory continues along the same lines, as you just described in Cohort 3 participants show an even longer duration of improvement and more consistent across the participants. -- would there be a reason to think that you should -- when you -- if and when you go forward and design the next set of research parameters, would there make any sense to design a cohort that gets 4 treatments weekly? Or you think that the retreatment .

I think it's an excellent question. The thing you start running up against this tolerability and feasibility. So what we thought based on clinical medicine. And then we're drawing on the experience in hemodialysis mostly that anything more than 4 hours of treatment 3 times a week, say, a Monday, Wednesday, Friday, schedule this will not be tolerable to patients. That's about as much as the old tolerate. And so no, we're not considering going to 4 treatments that on .

Okay. And that is not a function of the white Hemopurifier treatment is currently administered that could possibly change if you do move to a simplified treatment -- streamline treatment system. Is that correct? It's not -- it has nothing to do with the way you're treating people. It really is just having that treatment in and of itself probably cannot be tolerated more than 3 times a week. .

Yes, well tolerated both in terms of logistics and what patients themselves. I mean you talk about 4 hours, but there's also time in terms of hooking the patient up, timing the system taking them off. So it ends up being a complete day, it's not just 4 hours. So yes, anything more than 3 days. .

Again, and if we see in cohort 3, what we're seeing in Cohort 2 where we're seeing the directional changes we want, hopefully even greater magnitude with 3 treatments then we would take that 3 treatment in a week strategy forward for an efficacy trial. But they're kind of getting a little bit of ahead of ourselves, we have to see the data first. .

Okay. One last question. So you mentioned also that there are many other conditions and diseases where EVs are indicated -- so you've been really good in the past. And Jim, I think that this is more of a question for you probably. You've been very good in the past at maintaining certain maintaining research on the Hemopurifier without incurring significant costs, not actual critical testing, but publishing papers speaking at medical conventions and other ways of trying to test the hypothesis that the Hemopurifier can be beneficial across the spectrum, of different indications.

Are there other opportunities do you think for doing more and broader work about the Hemopurifier in an extremely cost-effective way. .

Well, we can continue to do what we're doing, which is exactly as you described, Marla, using our in-house scientists, our in-house equipment, buying reagents and things, but that's not expensive. And trying to get samples either given to us or an extensively purchased. And we can continue to do that, continue to write articles -- but to really move forward, eventually, we would need to either bring in more capital to finance a clinical trial in 1 of these -- 1 or more of these diseases, to partner up with somebody, other government grants or 2 there are options out there and -- but I think we would need to support 1 of those ways to actually conduct a clinical trial in 1 of these things. So we will continue to do what we're doing. And try to find the right opportunities to move forward. .

Okay. That's makes sense. But is it also fair to say that what you're doing, even though it's clear that you need to proceed to more structured clinical research -- is it fair to think that what you are doing gives you much more optionality in terms of finding a potential partner for certain or a variety of indications.

It's possible. We are talking to people. If another option is in future discussions with the FDA, if they chose to broaden or add to our breakthrough device designation in viruses.

Right now, it's just for life-threatening viruses, which long coba is not considered a life-threatening virus. But if they were to expand it to include that, then we could do potential emergency use the one-off treatments actually get some human data. But again, that's just a possibility. I'm not promising anything, but those options could happen.

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

Thank you. In closing, I'd like to recap some items to keep on your radar screens. First, we are now in the final cohort of our Australian oncology trial, with the goal of completing treatment and related follow-up by the end of calendar 2026 or early 2027. Second, the preliminary cohort 2 biomarker observations provide additional data for us to analyze as we complete the trial and move toward our next regulatory discussions. .

And third, as just discussed, we continue to explore the broader potential of the Hemopurifier platform, including in long COVID and in other diseases in which extracellular vesicles may play a role. We remain focused on advancing the Hemopurifier platform through disciplined clinical execution, rigorous analysis of our data and careful capital management. We appreciate your continued interest and support. Thank you for attending our call.

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

Good day, and welcome to the Aethlon Medical Fiscal Year-end March 31, 2026, Financial Results and Corporate Update Conference Call. [Operator Instructions]

Please note this event is being recorded. I would now like to turn the conference over to Jim Frakes, CEO and CFO of Aethlon Medical. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's Fiscal Year-end March 31, 2026, Earnings Conference Call. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Aethlon Medical. At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal year ended March 31, 2026. If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at www.aethlonmedical.com to view it.

Following this introduction and the reading of the company's forward-looking statement disclaimer, Dr. Steven LaRosa, our Chief Medical Officer, and I will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session.

Before we start the business portion of the call, please note that the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934 as amended. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties, and actual results may differ materially from the results anticipated in the forward-looking statements.

Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption Risk Factors in the company's annual report on Form 10-K for the fiscal year ended March 31, 2026, the company's most recent quarterly report on Form 10-Q and in the company's other filings with the Securities and Exchange Commission. Except as may be required by law, the company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances.

Now I would like to begin by highlighting progress during the fiscal year ended March 31 going on through the first part of June as we continue to execute against our strategy of advancing the Hemopurifier platform while maintaining disciplined cost control. During the period, we achieved important clinical research and intellectual property milestones. We continue to advance our oncology program while also expanding our evaluation of Hemopurifier applications into additional disease areas through preclinical research. These efforts reflect our broader objective of establishing the Hemopurifier as a platform technology with potential applications across multiple serious and life-threatening conditions.

Taken together, these achievements demonstrate continued execution against our key priorities of clinical development, platform expansion, intellectual property growth and disciplined resource management.

And now I will turn the call over to Dr. LaRosa, who will cover updates on the Australian oncology trial and on our R&D efforts. Steve?

Thank you, Jim. Enrollment and treatment of participants in Cohort 2 of our Australian oncology trial have been completed. As a reminder, 3 participants in Cohort 2 received two 4-hour Hemopurifier treatments during a 1-week treatment period. An independent data safety monitoring board reviewed the data, identified no safety concerns and recommended advancing to the third and final cohort of the study with no protocol modifications.

Screening is actively underway at all 3 investigative sites for this final cohort where 3 to 6 participants will be treated with 3 Hemopurifier sessions during a 1-week period. The first participant in Cohort 3 of the study has been enrolled and received 3 Hemopurifier treatments without any device deficiencies or immediate complications and is now in the safety follow-up period.

Serial extracellular vesicle and T cell measurements on participants in Cohort 2 have been measured by the central lab at the University of Sydney. Formal statistical analyses comparing the effects of the 3 different Hemopurifier dosing regimens on these parameters will be performed by our CRO at the completion of the trial. As a reminder, this is a 9- to 18-patient study designed to evaluate the safety and the feasibility of the Hemopurifier treatments and determine an appropriate dosing interval in participants with solid tumors whose disease is stable or progressing while on a treatment that includes anti-PD-1 agents, KEYTRUDA or Opdivo.

Segueing now to our preclinical activities. We are advancing our preclinical extracellular vesicle research activities, including studies evaluating removal of EVs and plasma samples from patients with rheumatoid arthritis and chronic kidney disease. Platelet-derived extracellular vesicles and their cargo have been noted to play a pathogenic role in rheumatoid arthritis. EVs in patients with chronic kidney disease have been demonstrated to contribute to congestive heart failure in this population. These efforts support the concept of a pipeline within a single device with EV removal as the primary mechanism of action.

Separately, we continued our evaluation of the Hemopurifier's compatibility with a simplified blood pump system developed by Stavro Medical. Initial testing assessed flow rates and transfer of dye fluid to the Hemopurifier. These assessments have been completed and were successful. Future studies being considered right now, including the use of blood or plasma and removal of surrogate markers for extracellular vesicles by the Hemopurifier using this blood pump system.

We believe that freeing the Hemopurifier up from a dialysis machine, dialysis unit and a large double lumen dialysis catheter would improve the number of physicians able to perform the Hemopurifier treatment and increase the number of places where such a treatment could be performed. For the patient, this could translate into having a less invasive vascular catheter placed and being able to receive their treatment in their therapeutic home.

Aethlon Medical is closely monitoring the evolving outbreak of the Bundibugyo species of Ebola in the Democratic Republic of the Congo and Uganda. The company has previously published in vitro removal data on the Marburg and Zaire species of Ebola from both cell culture fluid and plasma by a miniature version of the Hemopurifier. During the 2014 Zaire outbreak, a single 6.5-hour Hemopurifier treatment of a critically ill Ebola patient with multi-organ failure was associated with a 2-log reduction in viral load and clinical recovery.

In December 2014, the FDA approved a compassionate use protocol as a supplement to our open IDE for life-threatening viral infections for which there is no treatment. This compassionate use protocol allows for the treatment of up to 20 subjects at up to 10 institutions in the U.S. Recent interactions with the FDA have confirmed that this protocol remains open for enrollment. Aethlon has shared the above information with both the World Health Organization's R&D Blueprint Expert Panel as well as the National Emerging Special Pathogens Training and Education Center, known as NETEC, who works closely with the 13 U.S. regional special pathogen treatment centers that would treat a patient with Ebola in the U.S. should it happen.

With that, I'll turn the call back over to Jim for the financial discussion and questions.

Thanks, Steve, and good afternoon again, everyone. Turning briefly to the financials. As of March 31, 2026, we had approximately $5 million in cash and cash equivalents which provide resources to support ongoing clinical and research activities. Subsequent to fiscal year-end, we further strengthened our balance sheet by raising approximately $1.85 million in net proceeds through our at-the-market program.

Turning to some high-level expense analysis. Our consolidated operating expenses declined 21.9% year-over-year to approximately $7.3 million, reflecting continued expense discipline and operational efficiency while advancing our clinical and research priorities. That compares to a $9.3 million of operating expenses in the fiscal year ended March 31, 2025. The decrease was primarily due to a $1.1 million reduction in payroll and related expenses, a $500,000 reduction in general and administrative expenses and a $400,000 reduction in professional fees.

Consistent with the reduction in operating expenses, the operating loss for the fiscal year decreased to approximately $7.3 million for fiscal 2026 from $9.3 million in the prior fiscal year. You can find more detail on these expense changes in our 10-K, which breaks down specific drivers by category. Our other income was approximately $142,000 for the fiscal year ended March 31, 2026, primarily reflecting interest income earned on cash balances. That compares to other expense of approximately $4 million in the prior fiscal year. The prior year amount included approximately $4.7 million of noncash financing-related charges.

So overall, our net loss attributable to our common stockholders was $7.2 million for the fiscal year ended March 31, 2026, compared to a net loss of $13.4 million for the fiscal year ended March 31, 2025. We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for March 31, 2026 and 2025, and the consolidated statements of operations for the fiscal years ended March 31, 2026 and 2025. We will file our annual report on Form 10-K following this call.

Our next earnings call for the fiscal first quarter ending June 30, 2026, will coincide with the filing of our quarterly report on Form 10-Q in August 2026. And now we would be happy to answer any questions that you may have. Operator, please open the call for questions.

[Operator Instructions]

The first question comes from Marla Marin with Zacks.

So a lot going on. So just a couple of housekeeping questions. I want to get back to something that I think you said, Jim, the compassionate use protocol, which is still open. Can you refresh us in terms of your -- it would seem to me based on my recollection of -- I know you treated some seriously ill COVID patients, but it would seem to me that you're well below that threshold that you cited of the number of potential patients to be treated and the number of medical centers.

I believe the Ebola protocol is relevant only to Ebola. So it would be up to 20 patients -- Ebola patients at 10 centers.

Got it.

No, that compassionate use protocol is specific to Ebola and it's 20 patients at up to 10 centers.

Okay. Got it. So it had -- it's completely separate from the patients that you had treated in the past under emergency.

Yes.

Okay. Got it.

That is correct. That is correct.

Okay. Good. Can you give us a little more color on how you're planning to approach the preclinical activities around rheumatoid arthritis? I'm guessing that this is something that will be done in a very cost-efficient manner because that's what you've been doing in terms of expanding or extending your research activities outside the current ongoing trial. But can you give us some color and also some sense of what the time line there is?

You want to take that or?

Sure. So Marla, rheumatoid arthritis is just one of the many diseases where platelet-derived EVs, a sizable percentage of the EV population in our blood is implicated in the disease. What we did is the first instance is test healthy plasma to look for platelet removal of EVs -- platelet-derived EVs. And we did that in a single large volume healthy plasma sample. We subsequently purchased in a cost-effective way, a couple of additional healthy plasma samples.

And now we are purchasing large volume rheumatoid arthritis samples. And those are all being run at our lab with the focus on the platelet-derived EVs and the microRNA. So that work is currently underway. And then with the chronic kidney -- just finish -- also I mentioned chronic kidney disease. There's been recent publications that these patients have EVs that cause congestive heart failure, which is a huge source of morbidity and mortality in this population. So we have purchased small samples of chronic kidney disease plasma, and we're testing them for binding to the resin in our device. And again, that work is being done in-house as well.

And how should we think about next steps there? Because in the past, I know you've contributed to working on peer-reviewed papers. You've presented at different medical presentations. So how should we think about next steps depending upon the outcome of the testing that you're doing now?

Yes, sure. So we published a preprint in one of the preprint servers on removal of platelet-derived EVs from a single healthy plasma specimen. The feedback we received is we needed to run more samples and that we needed to also go into a relevant disease sample.

So with that in mind, we got the additional healthy plasma samples, and we got the rheumatoid arthritis samples. And we think that this will be the data needed to satisfy the reviewers and turn -- not turn, but have in addition to a preprint and actually peer-reviewed publication on the subject with respect to our device. Same thing with the CKD, chronic kidney disease samples, we'll look at binding to our resin, and we would then plan on turning that into an abstract at a medical meeting and a peer-reviewed publication. Again, filling -- trying to fill the preclinical pipeline.

Right. Got it. Got it. And building your database in the most cost-effective way that you can. Is that the right way to think about it?

Yes. Yes, I think that's a good way to say it.

Okay. And then last question from me. So you've treated the first participant in Cohort 3. And I think at your last conference call, you said you had -- you were very pleased with the interest that you had seen in participating in the trial. Is that still something that's operating in terms of moving on to treating the next participant?

Yes. No, we've seen good engagement and commitment from our 3 sites in terms of screening activity. So that remains a positive, bodes well. We did have a few patients that became screen failures for not meeting an inclusion or exclusion criteria. That happens in every study, unavoidable. So -- but the most important thing for me is that the engagement is there and the activity is there.

The next question comes from Anthony Vendetti with Maxim Group.

So just in terms of the efficacy, any endpoints you're looking for or readouts on an efficacy standpoint because I know obviously, the first studies are safety. But what are you looking for in terms of efficacy? And are you able to report on those other than internally know about it, are you able to publish that data?

Yes. So remember, the primary endpoint for this study is safety. Secondary endpoint is surrogate markers looking at the Hemopurifier activity, and those would be EV removal, extracellular vesicle removal and effects on T cells, including antitumor T cells. We previously reported on some qualitative observations from the first cohort, and those are in a prior press release where we saw some changes in EVs and T cells in the right direction.

As I just said, we've just received measurements from Cohort 2. But the big thing that will occur is at the end of the study, there'll be a formal statistical analysis looking at those dosing regimens between the 3 different dosing regimens. And that will look magnitude of EV decreases and duration of EV decreases as comparing the 3 strategies and again, magnitude and duration of positive effects on T cells. Those will be the major readouts. The study is not randomized and is small such that clinical outcomes are not a primary outcome or secondary outcome of the study. It's just way too small for such a -- for clinical efficacy.

Right, right. No, of course, at this stage. Yes. Certainly for statistical significance in terms of clinical efficacy. But nonetheless, if they're doing well and you're able to show that, even though that's not the primary endpoint, that's always encouraging.

What about any signals suggesting that the Hemopurifier may enhance the therapies like KEYTRUDA or Opdivo.

Yes. I would just call your attention to that prior press release that shows that the EVs, including tumor-derived EVs went down in the first cohort and that there were improvements in T cells and antitumor T cells in the first cohort.

Okay. And then any biomarkers or exosome-related findings that have emerged as well? I guess the EVs is what you're talking about?

Yes. In the first cohort of particular interest to us was that EVs carrying PD-L1 on the surface went down during the treatment. These particular population of EVs have been implicated as a cause of resistance to anti-PD-1 therapy. So the fact that they went down with treatment, again, at least in the first cohort was a positive signal that will have to be corroborated, confirmed in the subsequent cohorts and the magnitude and duration will have to be examined. But that was of particular interest to me at least.

Okay. So, so far, to sum it up, if I could do so, everything is moving in the direction you would want it to be moving in terms of what you're seeing so far with the patients that have been treated.

Correct.

The next question comes from Jeremy Pearlman with Maxim Group.

I think that was -- I didn't dial in. I think the [indiscernible] to that. I'm sorry. Anthony already asked the question.

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

Thank you. In closing, we remain focused on advancing the Hemopurifier platform through disciplined clinical execution and careful capital management. We appreciate your continued interest and support and look forward to speaking with you in August. Thank you very much. Goodbye.

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

Greetings. Welcome to Aethlon Medical, Inc. Annual Meeting of Stockholders Call.

[Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, James Frakes, Chief Executive Officer and Chief Financial Officer. Jim, please go ahead.

Thank you. Good morning. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Aethlon Medical, Inc. I am pleased to welcome you to the Aethlon Medical Annual Meeting of Stockholders. The meeting will now officially come to order. The time is now approximately 8:00 a.m. Pacific Time on February 19, 2026, and the polls are now open for voting on all matters to be presented. As you know, we have adopted a virtual format for our annual meeting this year in order to provide a consistent and convenient experience to all shareholders regardless of location.

Before we proceed with the formal business of the meeting, I'd like to introduce to you the members of the Board and the business team who are with us today. The other members of the Board with us virtually today are Edward G. Broenniman, Dr. Chetan Shah, Angela Rossetti and Nicolas Gikakis. The other officer of the company with us virtually today is Michele Bombardiere, VP Controller. I would also like to introduce Jennifer Trowbridge of Procopio, Cory, Hargreaves & Savitch LLP, the company's outside legal counsel, who is also in attendance virtually and available to respond to appropriate questions as needed. Ms. Trowbridge will be serving as Inspector of Election and Secretary of the Annual Meeting.

We will now proceed with the formal business of the meeting in the order set forth in the notice of annual meeting and proxy statement. We will first present the proposals submitted for stockholder approval by our Board. We will take questions related to the proposals. And after all of the proposals have been presented, after which we will announce the preliminary results of the voting.

As I mentioned earlier, the polls are open for voting on all matters to be presented. Each share of common stock issued and outstanding as of the close of business on January 14, 2026, the record date for the annual meeting, is entitled to 1 vote on each matter to be presented.

After I describe each item to be voted on, we will close the polls. We will not accept ballots, proxies, revocations or changes after the closing of the polls. If you have already submitted your vote by proxy and do not wish to change your vote, you do not need to vote now, and your shares will be voted as previously instructed. If you intend to vote and have not already done so or you desire to change your vote, you must submit your vote online now. If you have not voted, I encourage you to vote online now to ensure your vote is counted.

If you hold shares through a bank, broker or other nominee, you must follow the directions you receive from them in order to vote or to change your previously submitted vote. Stockholders of record and registered beneficial owners may submit questions or comments for the Q&A portion of this meeting. Questions can be submitted by e-mail to me, Jim Frakes, CEO and CFO of Aethlon at [email protected]. We will try to answer the questions submitted that are germane to the proposals and/or this meeting as and if we have time. I will screen incoming questions. And during the Q&A portion of the meeting, we will read germane questions out loud before someone from our team responds. Please submit your questions now to make sure that they are received in a timely fashion for our review and response.

Will the Secretary of the meeting please report at this time with respect to the mailing of the notice of the meeting and the stockholders' list.

Yes. This is Jennifer here. I have at this meeting a complete list of the holders of record of the company's common stock on January 14, 2026, the record date for this meeting. A list of stockholders of record is available for inspection by the stockholders of record during this meeting for any reason germane to this meeting. I also have an affidavit certifying that on or about January 16, 2026, a notice of Annual Meeting of Stockholders of the company was deposited in the United States mail to all stockholders of record at the close of business on January 14, 2026.

Thank you. At this time, I am appointing Ms. Trowbridge to act as Inspector of Election at this meeting. Ms. Trowbridge has taken and subscribed the customary oath of office to execute her duties with strict impartiality. We will file this oath with the records of the meeting. Her function is to decide upon the qualifications of voters, accept their votes and when balloting on all matters is completed, to tally the final votes.

Will the Secretary please report at this time with respect to the existence of a quorum?

Yes. Proxies have been received for 445,731 of the 973,213 shares of common stock outstanding on the record date, which represents approximately 45.8% of the total outstanding shares. This constitutes a quorum for the meeting today, and we may carry out the business of the meeting.

Thank you. We will now proceed with the formal business of this meeting. After all of the proposals have been described, we will answer any questions related to the proposals submitted online. As a reminder, we ask that any questions or comments during this portion of the meeting pertain only to these proposals. Please submit any questions as soon as possible for our review.

There are 7 proposals to be considered by the stockholders at this meeting. The first item of business is the election of 5 directors to serve until the Annual Meeting of Stockholders in 2026 and until their successors are elected. The nominees for directors are: Edward G. Broenniman, James B. Frakes, Nicolas Gikakis, Angela Rossetti and Chetan Shah M.D.

The second item of business today is the ratification of the appointment of Haskell & White LLP as our independent registered public accounting firm for the fiscal year ending March 31, 2026.

The third item of business is the approval of an amendment to our 2020 equity incentive plan, as amended, to increase the number of shares of our common stock authorized for issuance thereunder by 100,000 shares.

The fourth item of business is the approval of an amendment to our Articles of Incorporation to increase the total authorized shares of our common stock from 6 million to 100 million.

The fifth item of business is the approval for the purposes of complying with Nasdaq Listing Rule 5635(d) of the issuance of up to an aggregate 1,662,553 shares of common stock issuable upon the exercise of common warrants, placement agent warrants and prefunded warrants issued in connection with the securities purchase agreement dated as of December 5, 2025, in connection with the company's private placement financing.

The sixth item of business is the approval for the purposes of complying with Nasdaq Listing Rule 5635(d) of the issuance of up to 368,471 shares of the company's common stock issuable upon the exercise of new unregistered common stock purchase warrants issued pursuant to that certain warrant inducement agreement dated December 5, 2025.

The seventh and final item of business is the approval of an adjournment of the annual meeting to another place or a later date or dates, if necessary or appropriate, to solicit additional proxies in the event we have not received sufficient votes in favor of any of the foregoing proposals.

That was the final proposal for today's meeting. I will now take a moment to review any questions submitted during the proposals before we close the polls. As a reminder, we will only review and answer questions at this time that pertain to the proposals.

We have not received any questions related to the proposals. Therefore, we will proceed. The time is now 8:10 a.m. Pacific Time, and the polls are now closed for voting.

Let's now move on to the announcement of results of voting. May we have the results of the voting, please?

Yes. All right. The report of the Inspector of Election covering the proposals presented is as follows: the proposal to elect each of Edward G. Broenniman, James B. Frakes, Nicolas Gikakis, Angela Rossetti and Chetan S. Shah as directors of the company is carried. The selection of Haskell & White LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2026, is approved. The proposal to approve an amendment to the company's 2020 equity incentive plan as amended, to increase the number of shares of the company's common stock authorized for issuance thereunder by 100,000 shares is approved.

The proposal to approve an amendment to our Articles of Incorporation to increase the total authorized shares of our common stock from 6 million to 100 million is approved. The issuance of shares of common stock issuable upon the exercise of common warrants, placement agent warrants and prefunded warrants issued in connection with a December 2025 private placement is approved. The issuance of the company's common stock issuable upon the exercise of new unregistered common stock purchase warrants pursuant to a warrant inducement agreement also dated December 5, 2025, is approved. The proposal to approve an adjournment of the annual meeting to another place or a later date or dates, if necessary or appropriate, to solicit additional proxies in the event we have not received sufficient votes in favor of the foregoing proposals is also approved.

Because each of the proposals presented for approval at today's meeting have been approved by our stockholders, we will not be adjourning the meeting to another place or time, and we'll close out all matters of business at today's meeting.

We expect to report our preliminary voting results or if available to us on a timely basis, our final voting results on a current report on Form 8-K to be filed with the SEC within 4 business days after the end of this meeting. If not reported earlier, we expect to report our final voting results in an amendment to our Form 8-K within 4 business days after the final results are known to us.

This concludes the formal portion of today's meeting, and the annual meeting is now adjourned. We will now entertain any appropriate questions from stockholders.

We did not receive any such questions. Therefore, we will move on to closing remarks. I'd like to thank all the stockholders for attending today's meeting and your continued support of Aethlon. Operator, please close the call.

Thank you. This concludes today's conference, and you may disconnect at this time. Thank you for your participation.

Good day, and welcome to the Aethlon Medical Third Quarter Fiscal 2026 Earnings and Corporate Update Conference Call.

[Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to CEO and CFO, Jim Frakes. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's Fiscal Third Quarter 2026 Earnings Conference Call. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Aethlon Medical.

At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal third quarter ended December 31, 2025. If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at www.aethlonmedical.com to view it.

Following this introduction and the reading of the company's forward-looking statement disclaimer, Dr. Steven LaRosa, our Chief Medical Officer, and I will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session.

Before we start the business portion of the call, please note that the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended. The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties, and actual results may differ materially from the results anticipated in the forward-looking statements.

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

Now I would like to begin by highlighting progress during the December quarter and early calendar 2026 as we continue to execute against our strategy of advancing the Hemopurifier platform while maintaining disciplined cost control. Key developments include continued enrollment and treatment progress in our Australian oncology trial; ongoing expansion of our extracellular vesicle, or EV, research platform, supporting the Hemopurifier as a potential multi-indication therapeutic; advancement of work evaluating Hemopurifier compatibility with a simplified blood treatment system that could expand future clinical and commercial flexibility; and sustained operating expense reductions on a year-to-date basis compared to the prior year.

And now I will turn the call over to Dr. LaRosa, who will cover updates on the Australian oncology trial and on our R&D efforts. Steve?

Thank you, Jim. Ongoing progress has been made in our Australian oncology trial of the Hemopurifier in participants with solid tumors not responding to a treatment regimen that includes immunotherapy with the anti-PD-1 agent, pembrolizumab, known as Keytruda, or nivolumab, known as Opdivo.

We have previously reported the successful completion of the first cohort where 3 participants received a single Hemopurifier treatment without any device-related serious adverse events or dose-limiting toxicities. Favorable directional improvement in EV numbers and immune cell numbers were observed in this cohort with the HP treatment. We have now completed 2 HP treatments in 2 participants in the second cohort of the trial. We have also recently enrolled a third patient who has passed screening and is due to receive the 2 Hemopurifier treatments by the end of March -- excuse me, by the end of February.

Once the 3 patients have completed treatment in Cohort 2, safety data will be presented to an independent Data Safety Monitoring Board. We are targeting late March for this meeting. The DSMB will provide Aethlon Medical with a recommendation to either advance to the third and final cohort of the trial where patients will get 3 Hemopurifier treatments in a given week or they may require 3 additional patients in the current cohort.

Aethlon has noted an uptick in the number of interested potential participants in the study since we contracted the groups Trialfacts and Dedicated. Trialfacts performs online advertising of the trial, while Dedicated performs phone prescreening of interested participants. Participants who pass this initial screening are then referred on to the 3 investigative sites for informed consent and more detailed screening. This process has already resulted in HP treatment treated patients in the study and has provided a pool of potential future participants for Cohort 3 of the study.

As a reminder, this 9 to 18-patient safety feasibility and dose-finding trial is in patients with solid tumors with stable or progressive disease while on a treatment regimen that includes either Keytruda or Opdivo. Patients who meet all exclusion -- all inclusion and no exclusion criteria are enrolled in sequential cohorts to receive 1, 2 or 3 Hemopurifier treatments during a treatment week.

In addition to monitoring safety, the study is designed to examine the number of Hemopurifier treatments needed to decrease the concentration of extracellular vesicles and if these changes in EV concentrations improves the body's own natural ability to attack tumor cells. The scientific rationale and full design of this study have recently been published in the peer-reviewed journal, BMJ Open, and the link to this article could be found on the Aethlon Medical website.

I'll now change gears and talk about the R&D update. Under a Material Transfer Agreement, Stavro is studying the compatibility of the Hemopurifier with their SLAMB system. This system utilizes a single small lumen vascular catheter and a simplified blood pump, compared to the large double-lumen vascular catheter and more complicated dialysis machines typically used for the treatment. This research could lead to a simplified system for performing Hemopurifier treatments in oncology units and in infusion centers in the future without the requirement to use a large double-lumen dialysis catheter, a bed in a dialysis unit, a dialysis machine or a supervising nephrologist.

The Aethlon Medical R&D team continues to attempt to build on our preclinical data in Long COVID. We have previously shown that the GNA affinity resin in the Hemopurifier binds EVs in Long COVID patient samples and decreases microRNAs known to cause immune dysregulation. This data has been published in the preprint server bioRxiv and has been submitted for consideration in a peer-reviewed journal. We are now exploring possibilities of investigating other cargo within the EVs, such as viral particles, with our technology.

Extracellular vesicles, including platelet-derived EVs, have been implicated in the pathogenesis of a myriad of indications in addition to cancer, including, but not limited to, lupus, rheumatoid arthritis, systemic sclerosis, multiple sclerosis, cardiovascular diseases, sepsis and ALS. Aethlon previously published data on the removal of platelet-derived EVs from healthy plasma by the Hemopurifier in the preprint server bioRxiv.

We plan to further this work by examining platelet-derived EV and microRNA removal by Hemopurifier -- by the Hemopurifier in patients with some of these indications, so disease plasma, to further this work. This approach is in line with our thinking that the Aethlon Hemopurifier may provide a pipeline within a single device.

With that, I'll turn the call back over to Jim for the financial discussion.

Thanks, Steve, and good afternoon again, everyone. Turning briefly to the financials. As of December 31, 2025, we had a cash balance of approximately $7 million. Our consolidated operating expenses for the 3 months ended December 31, 2025 were approximately $2.06 million, up $250,000 or 13.6% compared to the same period last year. This increase was primarily due to higher payroll and related costs, partially offset by lower clinical trial expenses and reduced professional fees, mainly from Investor Relations activities.

As a result, the operating loss for the quarter increased to $2.06 million, compared to $1.81 million in the prior year period. Other income, primarily interest income earned on cash balances, was $44,000, slightly lower than the $60,000 recorded in the same quarter last year.

Looking at the 9-month period, our operating expenses decreased significantly to $5.36 million, down $1.98 million or 27% from $7.34 million last year. This improvement reflects lower payroll, general and administrative costs and professional fees, highlighting the impact of our ongoing cost management initiatives. You can find more detail on these expense changes in our 10-Q, which breaks down specific drivers by category.

We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for December 31, 2025 and the statements of operations for the 3 and 9-month periods ended December 31, 2025 and 2024. We will file our quarterly report on Form 10-Q following this call. Our next earnings call for the fiscal fourth quarter ending March 31, 2026 will coincide with the filing of our annual report on Form 10-K in June 2026.

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

[Operator Instructions] The first question today comes from Marla Marin with Zacks.

So I just want to touch on some of the things that you mentioned in the prepared remarks. You've moved on in the trial to Cohort 2. And given that part of the trial's goal is to determine dosage or the number of Hemopurifier treatments and impact that they have on the trial participant, so now you will be administering the treatment twice instead of, with Cohort 1, the onetime treatment. But the participants are involved in the trial for the same length of time. Is that correct?

It's the same follow-up period. The difference, as you correctly stated, was, instead of getting 1 Hemopurifier treatment in Cohort 1 and Cohort 2, they get 2. So they get it typically on a Monday and Friday. So a number of days in between. And we'll be able to see the kinetics of how -- what the EV numbers do in between treatments. And then we'll also see if the 2 treatments lead to more long-lasting decreases in EVs and more long-lasting effects on T cells compared to what we saw in the first cohort.

Okay. Thank you for clarifying that. Okay. Did somebody -- okay. Then my next question is, if it turns out that the -- investigating the potential to connect the Hemopurifier to, I think you called it the SLAMB system, can you give us some indication of like what that would mean in terms of potentially opening new doors or facilitating your ability to get the Hemopurifier into different medical centers potentially down the road?

Yes, sure. Yes. So right now, Marla, you have to put in a dialysis catheter, which is a fairly -- we call it kind of in medicine circles, we call it a garden hose. It's a large-bore catheter with 2 lumens, one that you take blood out and then when you return the blood in. That's a pretty invasive device.

The SLAMB system uses a much smaller single-lumen catheter that wouldn't have to be put in, in the neck. So in hospitals, there are these things called PICC lines that have pretty much become ubiquitous, that are these small, thin catheters that could be put in the crook of the arm. That's what I would envision. So that would be a big change in terms of the invasiveness of the catheter.

Currently, for the Hemopurifier, we use a dialysis machine to run it. We're solely using really the blood pump mechanism of the machine. We're not using all the other bells and whistles that a dialysis machine has because we're not removing any fluids or electrolytes. So we're at the mercy of a dialysis machine securing a bed in a dialysis unit because that's the only place dialysis could be done in the hospital, and having a treating nephrologist because they're the ones who are skilled in using the dialysis machine.

So with this SLAMB system, you'd have a single-lumen catheter with a simplified pump, which presumably would be much easier from an operator standpoint. So that opens the ability to do this potentially in an oncology unit where people get their chemotherapy infusions or even in infusion centers, which most hospitals have in their ambulatory centers. So it really opens the door to doing this in oncology units as well as in, say, if it was a patient with autoimmune disease that gets an infusion of whatever immunosuppressive, those kind of units. So it really kind of removes you from the dialysis space. Potentially.

So just to make sure I understand, it removes you from that dialysis space and makes it much simpler for the hospital staff to administer the treatment. But also from the patient's perspective, it makes it less invasive and probably less daunting to receive the treatment. Is that the right way to think about it?

Yes. Because as I say, these PICC lines, they're typically put in what we call the antecubital fossa. That's the space in between your forearm and your upper arm, right, in front of your elbow. Getting a thin catheter there is a lot less daunting to a patient than getting a large catheter placed up in their neck. And they're also easier to take care of as well. They tend to have less complications.

So yes, I think that from a patient perspective, I'd much rather have one of these catheters than a dialysis catheter. And I'd much rather be able to stay in my therapeutic home, meaning I'm going to an oncology unit to get my immunotherapy, I'd like to get my EV removal treatment in the same place and not have to go to a dialysis unit to have that done, which is what has to happen now. So it just makes it more integrated into care.

Got it. Okay. Last question for me. Jim, I know that you are extremely cost conscious about just about everything that the company is doing, and trying to make sure you maximize your R&D spend and your operating costs, optimize the operating costs. So in the press release and in the prepared remarks, you did talk about building upon some of the preclinical research that you had done. Can you just talk a little bit about -- confirm that everything you're doing is consistent with that same very cost-effective approach you're taking generally, and how you're able to do some of what you're doing, like the Long COVID, in a cost-effective manner?

Right. Well, you're right, I can't escape my Scottish heritage, I guess, on the cost containment front. We're trying to keep costs down as much as we can, yet still advance. So we're trying to obtain samples just for shipping costs basically, to the extent we can. We're trying to do the work in-house with our in-house -- with our small scientific staff, trying to limit the work by outside labs.

But yet still advance. So we're publishing articles. We are learning things. It's -- we have to make trade-offs, but we do feel like we're advancing it, Marla. While keeping the focus on the oncology trial. We're, again, delighted that we treated 2 out of the likely 3 patients in the second cohort after finishing the first cohort last quarter. So the progress is picking up on that front too.

No, that is very -- no, that's very apparent that things seem to really be moving forward at the pace that you are finally happy with or that is good to see rather.

Yes. That is true.

The next question comes from Jeremy Pearlman with Maxim Group.

Now first question, related to the oncology trial. You said that the -- more around the time line. Again, this is your best estimate. You said the third patient should be treated by the end of February and then you'll present the safety data by late March. How long do you think the board will respond back whether you can move on to the third cohort or you have to now, let's say, add additional patients into the second cohort? What do you think the time frame for that would be?

Great question. So yes, I had misspoke this, so I'm glad you caught my correction. That third patient will be treated at the end of this month, February. And then the Data Safety Monitoring Board will occur likely in late March.

Last -- I can only go historically. Last time, following the open session, at the day of the meeting, they had a closed session. And they returned a signed document to me within a couple of hours after. So I would anticipate a decision same day or next business day.

Okay. Great. And then let's say, just assuming they move you on to the third and final cohort, how -- and you said also on your prepared remarks that you had a pool of applicants, you saw an uptick of interest of potential participants. How quick do you think you could turn those around to do the 3 Hemopurifier treatments and then -- and get to finalize the last cohort data and then push that through?

Yes. So that's a great question. So this is what's really exciting. So thanks to our Controller, Michele Bombardiere. She got this Trialfacts and Dedicated, these groups that Aethlon contracted with. They have been able to supply the site referrals. And so we have a number of these folks lined up.

Once we get the -- with the current protocol, you can't enroll or sign a consent for a new patient until you advance to that next cohort. But once we do, those patients can then be approached. They're in the queue, so to speak. They can be approached for consent. There's then a screening period where they get some additional lab test and review. And then we have to line up the HP treatment around their next Hemopurifier treatment.

But the really exciting thing is, and again, we can't count our chickens, but there's a queue of potential participants waiting, which is really exciting for me.

And they can roll into the third cohort.

They can roll into the third cohort, yes, without any -- yes. They'll sign consent and they'll just move on. And so as opposed to saying, "Now we got to go look," we at least have a pool to draw on.

No, that's great. It's really good to have that pool to draw on. And then maybe just -- this is just a theoretical question related to how do you decide on the time gap between the first treatment? Like, you said earlier, a Monday, and then you did the second treatment on a Friday. Is there a specific reason why you chose the 5 days? Or is it -- and is there a possibility where maybe extending the gap between the treatments would be more beneficial to the patient? Is this like the optimal time? I'm just curious.

Well, extracellular vesicles are produced by tumors -- people with active tumors continuously. So the turnover is quite rapid. So going in -- again, this is a safety feasibility and our first time in oncology, we said we have to start with a single treatment and see how they do.

But we knew it's unlikely that that's going to keep EV numbers down long term, right? So we said, let's try 2 in a week and let's also try 3 in a week, meaning Monday, Wednesday, Friday. We thought anything more than that a patient won't tolerate because, for instance, in dialysis, it's very hard for people to do more than 3 times a week. So we thought that that was the most that somebody would be able to get during a week.

And then the other part of the story, which I think you're getting at, is when we look, we'll say, how often do you have to repeat that whatever treatment regimen is? Do you have to do that every week? Do you have to do that every 2 weeks? Do you have to do that once a month? And the way we have our sampling of labs, we'll be able to ascertain that. Is it once a week and then x number of time in between? Is it twice a week with x number of time in, or is it 3 times a week?

This was done with a little bit of background information from the plasma exchange trial at Mayo, where they ultimately thought that you needed at least 2 to 3x in a given week to keep EV numbers down. So it was -- the design was informed by what was in the literature in the plasma exchange space.

Got it. Understood. And then just last question, related also to this potential incorporating it into the SLAMB system. Is that -- is there going to be any -- would there be any regulatory hurdles from your end? Or since that device is, I'm assuming, is already approved, if it just is compatible, if you could get the Hemopurifier compatible with it, it's ready to go? Or is there some type of you would have to do some sort of a safety test or something related to that before you could use it into that system?

Yes. Well, they're submitting their -- they're working on their submission to the FDA. It's not already approved. So they'll have to do that. And then we would have to roll it in. I'm sure we would be expected to do a certain number of treatments with the 2 in place.

So it's not -- that's the plan.

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

A couple of quick questions. With the Cohort 2, 2 out of 3 patients in, and if I understood it correctly, you are basically using the same patients who had -- who were in Cohort 1 into the Cohort 2? If that is true?

No. These are entirely new. These aren't the same patients that were in Cohort 1. These are entirely new patients.

Okay. So they're entirely new. Okay. Fine. So what -- you said the third patient is starting at the end of this month. So do you think in a couple of months down the line, we should be done with this Cohort 2? And the real question is, is there a real need to do Cohort 3? Or do you think with Cohort 2, you would be able to judge if 2 treatments with Hemopurifier is enough to get the benefit that they could get? Or you still think you would need to do Cohort 3?

Okay. So a bunch of questions there. One is, yes, you're right, the third patient is going to get their 2 HP treatments at the end of this month. Following that, the independent Data Safety Monitoring Board will decide if that's sufficient or whether -- because it's a 3 plus 3 safety study, they'll decide whether it's sufficient or whether we need to add 3 additional patients.

So I can't know, wouldn't be appropriate for me to speak for them. But in the best possible scenario, by the time they meet at the end of March, we would have a directive to go ahead and begin in April with Cohort 3.

To get to your next question about the need for Cohort 3, well, again, this is based on the Mayo Clinic data, which suggested that you needed 2 or 3. I think we would be really hamstringing ourselves to stop at 2 and not investigate 3 because I have every reason to believe 3 could potentially be superior to 2 in terms of EV removal or T cells.

So I think we would be selling ourselves short to stop at 2. And I haven't seen any of the data from 2 to actually even prognosticate yet. So it's way premature to call on the efficacy of 2 right now.

It was a good question, but no, it's -- without knowing the data -- right.

Okay. So then I have a couple of questions on the SLAMB device, so -- integration. As you were stating, when you go from the dialysis machine to this machine, the tubing itself, the catheters itself are smaller in size, which makes the patient feel not so cumbersome. But on the other hand, the flow dynamics of the blood changes quite a bit between the larger tubing and the smaller tubing. So do you see that you might have to go through this rigmarole one more time with that machine because the flow dynamics have changed? The amount of capture of the EVs could be different because of the dynamics? What do you think?

Yes. Again, a lot of forward-looking questions there, but yes, so the first thing is -- the simple -- the first set of experiments is simply: is their pump compatible with the device, meaning does our device function without triggering alarms and clotting off, et cetera? They'll be using -- they'll be doing this, not on patients, but they'll be doing it in the lab with colored fluid and look at the pressures, et cetera.

Then you're right, there probably would have to be some ex vivo experiments looking to see -- make sure the EV capture is similar, yes. So this is just the first step, is seeing the compatibility of the device -- of their pump with our device.

Okay. So basically, that's not going to really help us move this trial any faster at this point. So it's something in the future basically, correct?

Not the current trial and probably not even the next trial. I don't think it'd be done in time.

Okay. And then the last question from me is, at one point you were talking about India and then you kind of walked away from that idea. Do you still see a possibility of having the Indian hospital get back into doing a clinical trial so you can kind of speed up the progress here? Or is it first Australia and then we'll see what happens?

Yes. I think we're pretty highly focused on Australia, RK. We'd be -- while the PI is great there and the hospital is great, we're advancing at a very good pace right now in Australia. And we just want to finish executing and get this trial done and get the data out. I think there'll be some expense and some distraction. So the answer is no, we're not going to go back there.

It'd be hard to advance to a PMA trial if you had another safety feasibility trial going on somewhere else in the world.

Right. If there's an emergency, if there's a pandemic breaking out in India, we know them, the PI is very comfortable with our device, we certainly could do an emergency use situation there. I wouldn't hesitate to consider that. But in terms of going back and doing a safety trial, no.

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

In closing, we remain focused on advancing the Hemopurifier platform through disciplined clinical execution and careful capital management. We appreciate your continued interest and support. Have a good day. Goodbye.

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

Good day, and welcome to the Aethlon Medical Second Quarter Fiscal 2026 Earnings and Corporate Update Conference Call. [Operator Instructions] Please note today's event is being recorded.

I would now like to turn the conference over to Jim Frakes, CEO and CFO. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's Fiscal Second Quarter 2026 Earnings Conference Call. My name is Jim Frakes, and I'm the Chief Executive Officer and Chief Financial Officer of Aethlon Medical.

At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal second quarter ended September 30, 2025. If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at www.aethlonmedical.com to view it.

Following this introduction and the reading of the company's forward-looking statement disclaimer, Dr. Steven LaRosa, our Chief Medical Officer, and I will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session.

Before we start the business portion of the call, please note that the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933 as amended, and the Securities Exchange Act of 1934 as amended.

The company cautions you that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties, and actual results may differ materially from the results anticipated in the forward-looking statements.

Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption Risk Factors in the company's annual report on Form 10-K for the fiscal year ended March 31, 2025, the company's most recent quarterly report on Form 10-Q and in the company's other filings with the Securities and Exchange Commission.

Except as may be required by law, the company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances.

And now I will turn the call over to Dr. LaRosa, who will cover updates on the Australian oncology trial and on our R&D efforts. Steve?

Thank you, Jim. I'll start off with the clinical update. Ongoing progress has been made in our Australian oncology trial of the Hemopurifier in participants with solid tumors not responding to a regimen that includes immunotherapy with an anti-PD-1 agent. We've completed Hemopurifier treatments in the three participants in Cohort 1. All three participants completed a single 4-hour Hemopurifier treatment without any device deficiencies or immediate complications.

At the prespecified 7-day safety follow-up, none of the three participants experienced a dose-limiting toxicity, or a device-related serious adverse event, an independent data safety monitoring board that was convened on July 11, 2025, recommended advancing to the second cohort where participants will receive two Hemopurifier treatments during a 1-week treatment period.

All three investigative sites in Australia have been busy prescreening potential participants for the second cohort. Potential participants have been identified by these screening efforts and these participants are currently reviewing the informed consent document.

In an attempt to accelerate enrollment, Aethlon has embarked on a 3-pronged strategy. First, we held a virtual investigator meeting with the three Australian principal investigators and sites to share best practices for identifying potential participants and describing the trial to those participants; two, we are working with our Australian CRO, ResQ, to identify one to two additional new sites; and three, we've engaged the company Trialfacts to perform clinical trial advertising, online prescreenings and referral of potential participants to the investigative sites.

As a reminder, the primary endpoint of the approximate 9 to 18 patients safety, feasibility and dose-finding trial is safety. Safety is determined by monitoring for the incidence of adverse events and clinically significant changes in blood tests following the Hemopurifier treatments.

The trial involves patients who are not responding to a treatment regimen that includes an anti-PD-1 agent and the participants will receive either 1, 2 or 3 Hemopurifier treatments during a 1-week treatment period.

In addition to monitoring safety, the study is designed to examine the number of Hemopurifier treatments needed to decrease the concentrations of extracellular vesicle or EVs. And if changes in these EV concentrations improve the body's own natural ability to attack tumor cells.

These exploratory central laboratory analyses will inform the design of later efficacy and safety trials, including a premarket approval study known as a PMA study, required by the FDA and other regulatory agencies.

As described in our press release from October 7, 2025, the laboratory of Professor Georges Grau at University of Sydney has performed analysis of extracellular vesicle, EV number and lymphocyte counts on samples before and after the HP treatment in the three patients in the first cohort. EVs are nanoparticles that participate in cell-to-cell communication and are implicated in the spread of cancer known as metastasis, the growth of new blood vessels to the tumor, known as -- called angiogenesis, and also inhibit the body's T cells, which are important for killing tumor cells.

Two of the three participants in the trial showed decreases in large EVs, known as microvesicles, following the Hemopurifier treatment. When examining the subsets of EVs, decreases were also noted in large and small platelet-derived EVs, in two of the three patients. We observed decreases in the subset of large EVs carrying the ligand PD-L1 in all three participants during the Hemopurifier treatment. Persistently elevated counts of EVs with PD-L1 have been associated with a lack of response to anti-PD-1 agents.

Following a single 4-hour Hemopurifier treatment decreases were also observed in 7 out of 10 microRNAs examined in two of the three participants. MicroRNAs are about one component of the cargo of extracellular vesicles, and have been previously been reported to promote cancer growth and metastasis.

After a single 4-hour treatment improvements in laboratory ratios associated with responses to immunotherapy were noted in two of the three participants. These ratios included the neutrophil to lymphocyte ratio, monocyte to lymphocyte, lymphocyte to albumin and the systemic immune-inflammation Index. Increase were noted in total T cells, CD8 and CD4 T cell subsets, and tumor-specific CD137 positive T cells in participants following the Hemopurifier treatment. Heterogeneity was noted in the time to these changes in the three participants and the magnitude of the changes observed.

Additional data from the subsequent two cohorts will help to determine whether these observations are reproducible, and whether there is a dose response with additional Hemopurifier treatments in terms of the magnitude and the duration of these changes.

I'll now switch to an update on the preclinical R&D activities. Aethlon Medical presented preclinical data on August 12, 2025, at the Keystone Symposium on Long COVID and other post-acute infection syndromes. Long-standing symptoms following acute COVID-19 infection, known as Long COVID, have been demonstrated to effect approximately 400 million individuals worldwide with a global economic burden of $1 trillion per year. No treatment has been approved by a regulatory agency for the treatment of long COVID.

Extracellular vesicle have been implicated in the pathogenesis of Long COVID. The data we presented demonstrated that large and small extracellular vesicles from Long COVID patients bound to the GNA lectin and the lectin affinity resin that's present in the Aethlon Hemopurifier.

Following this presentation, Aethlon's R&D lab has focused on studying the cargo of the extracellular vesicles removed from the Long COVID patient samples. We are currently preparing a manuscript for submission with these results with plans on submitting to a preprint server and a peer-reviewed journal, in a publication that's being done with our collaborators at UCSF Medical Center.

Recently, Aethlon Medical signed a material transfer agreement, an MTA, to study the compatibility of the Aethlon Hemopurifier with a system that utilizes a single small-lumen vascular catheter and a simplified blood pump. Currently, operation of the Hemopurifier requires a large double-lumen dialysis catheter, a more complicated dialysis machine as well as supervising nephrologists, dialysis nurses and the requirement for a dialysis unit bed. The research done under this MTA could lead to a simplified system for performing Hemopurifier treatments in oncology units in the future.

With that, I'll turn the call over to Jim for the financial discussion and questions.

Thanks, Steve, and good afternoon again, everyone. Let's touch briefly on the financials. As of September 30, 2025, we had a cash balance of approximately $5.8 million. Our consolidated operating expenses for the 3 months ended September 30, 2025, were approximately $1.5 million, down by approximately $1.4 million or 48%, from $2.9 million in the same period of 2024. The decreases were reflected across our expense categories of payroll, general and administrative expenses and professional fees.

Our payroll and related expenses decreased by approximately $778,000, reflecting lower headcount, reduced bonus accruals, and absence of prior year severance charges.

Our general and administrative expenses declined by approximately $437,000 driven by lower clinical trial costs and in part due to a $218,000 R&D tax incentive credit from the Australian government as well as reductions in supplies, insurance and other operational costs.

And our professional fees decreased by approximately $177,000, mainly from reduced investor relations and contract labor expenses, partially offset by higher legal tax audit and financial services costs.

As a result of these factors, our operating loss for the quarter decreased to $1.5 million, again, compared to $2.8 million in the prior year period, reflecting solid progress in aligning our resources with our strategic priorities.

You can find more detail on these expense changes in our Form 10-Q, which breaks down specific drivers by category.

We included these earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for September 30, 2025, and the statements of operations for the 3- and 6-month periods ended September 30, 2025 and 2024. We will file our quarterly report on Form 10-Q following this call. Our next earnings call for the fiscal third quarter ending December 31, 2025, will coincide with the filing of our quarterly report on Form 10-Q in February 2026.

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

[Operator Instructions] Today's first question comes from Marla Marin with Zacks.

So I just want to understand one thing in terms of the recruitment for Cohort 2, to what extent will potential participants understand that you are moving forward and that there were some positive responses in Cohort 1? Or that doesn't come into play at all?

Steve?

Marla. Yes, so it's a good question. So when we had our virtual investigator meeting, we went over again with the investigators, what we saw in terms of observations with the EVs and the T cells in the first cohort, so that they would understand those and be able to explain them. And then we also had a very, I think, good discussion about how to describe this trial to the patients. So there was a lot of good input from all three PIs. So I think the investigator meeting had a lot of value from that perspective.

Okay. And then also so you had -- as you have been explaining for a while, there was a follow-up with the Cohort 1 participants, a 7-day follow-up. Is there any sense in terms of subsequently whether there's -- that group of those three people are still performing in the way that you would expect or that wouldn't be in any way statistically meaningful data to have?

Well, we have -- the observations were based on the labs that went out to 8 weeks. So we have all that data for those patients. So there's no subsequent EV or T cell data that we expect from that group of patients. And then although we are following them clinically, that is not an endpoint. This is an early safety and feasibility trial. So we can't make any comments about the clinical response.

Okay. Right. That makes sense. And with Cohort 2, can you just remind us in terms of you're looking for, this as a dosage finding study as well as safety study. So what should we be thinking about once you down the road when you release top line data, what you'll be looking for?

Yes. So great question. So in Cohort 2, during a 1-week period, the patient will get -- the participant will get to HP treatment. So Monday, Friday would be the schedule as opposed to a single treatment. So what we would like to see not only most importantly, can someone tolerate two treatments in a week. That's the main objective.

But what we'd like to see is that the EV decreases that we observed in the first cohort would be more profound because they're getting two treatments instead of one. And that the T cell changes would also increase over time. So a dose response, even though it's a device, not a drug, a dose response. And then, of course, reproducing what we saw in the first three patients. So I think the next tranche of data will give us more information than we have right now.

Yes. Okay. Yes, that makes sense. And your -- as I think you've said in the past, you're not walking away from some of the other indications where you think the Hemopurifier can be effective. But given the realities of budgets and time constraints and all, you're not investing a lot of time or money in some of these other indications. So the paper that you wrote and then the presentation at the medical forum, are those the kind of things that we should think about for you going forward in the near term to try to keep people apprised of what's going on with the Hemopurifier?

Yes. No. As we've talked about before, I think EV reductions are relevant in a large number of indications. We've got to focus our efforts because of our staff and amount of funding. I would expect in the near term that we will have a preprint on our Long COVID data. So that's something to look forward to. And that data will also simultaneously get submitted to a peer-reviewed journal, which, of course, gets -- as I said, peer review. So that would be the next. So the Long COVID data. And then we -- as we can, we will look at EVs and other diseases. But again, we have -- as you said, we have to be focused based on our resources.

So we are monitoring other indications, but we're trying to stay focused.

Right. No, no, I get it. And then, Jim, a question for you in terms of you're always looking for ways to stretch or optimize your spending. I'm guessing that at this point, you really -- there's not a lot that you can do because you've pretty much optimized your spending. In terms of -- in the past, like quite a long time ago, there were some -- you had access to some sort of government funding that was not dilutive. Have you thought about that again? Or is that really not applicable now as you're moving through clinical trials?

Well, if the -- a government contract was aligned close to perfectly with our goals we would be interested. But if it was an excursion into a different field, it's just -- especially with the current administration cutting overhead on these contracts, they weren't all that profitable before. And now with the overhead reductions, I think that it's probably breakeven or close to breakeven at best. So it would have to dovetail really well with our goals -- to help us get to those goals more efficiently. So we're not averse to doing it, but it has to be the right contract or grant.

And our next question today comes from Jeremy Pearlman of Maxim Group.

Okay. So you had approval for -- to move on to the second cohort, roughly 4 months ago. Maybe if you could explain or why -- or hypothesize why you think it's taking so long to recruit patients?

Steve?

Yes. It's -- as we've kind of said before, this is not an easy sell to patients. Cancer patients don't usually get a large catheter put in and get their blood filtered over a machine. And so that takes some explaining. So I think -- and there's a lot of time points where patients have to get samples done.

So -- and then explaining to a patient what the -- in a safety and feasibility trial, what the value would be to them, we had a lot of discussions at the investigator meeting. So it's an EV removal in cancer is a novel concept. And extracorporeal therapies for cancer patients are -- is a novel concept, and that just requires some explaining to them. And -- so the slow enrollment to me is not all that unexpected.

Okay. Understood. And you -- based on that -- based on these new initiatives you're instituting to try and accelerate enrollment, do you still think by a time line for completion of the second cohort by the end of, let's say, mid-2026. Is that reasonable? Or how should we look at the -- based on these time lines?

Yes. I mean, we've tried to say that we would anticipate one patient per month. One of the things one must bear in mind is that it is now summer in Australia. So people are going on vacation and it's the holiday. So a slowdown during the holidays, I would not be unexpected. But one patient a month is what we're targeting.

We do hope that the -- we're not standing pat. As I've said, -- we've engaged this company called Trialfacts. So they're actually doing digital marketing. They're doing an online screening form and then they're referring potentially eligible patients to the sites. I think that will help. And we're actually looking for an additional one to two sites. So we're trying to exhaust every avenue to try to ramp things up.

Okay. That's great. And then just the last question related to some of the data that you talked about earlier on the call and that was in the press release today. Is that -- does that fit in with your hypothesis that this could help extend the patient life or help improve patients who have -- who are going under immunotherapy as well? Or is it not enough of a decrease yet in the T cells and the EVs?

Yes. So I'm always cautious because it's three patients. That's probably the most important thing. So the more patients, the more confidence one would have. But directionally, EV decreases is what we want to see, and we're seeing that overall and in some subsets and some improvement in different lymphocyte populations that are involved in tumor killing, they're going directionally in the right way. So if we see that this is reproducible in the next cohort and that the magnitude of the changes is increased, that would give one more confidence. So yes, things -- at least what we're seeing now, we're seeing directionally -- directional changes that we wanted to see.

And our next question today comes from Sean Lee of H.C. Wainwright.

This is Sean here for RK. I just have two quick ones. First, on the Australian study. Regarding the lower EV levels that you saw, was that directly following treatment or after a period of time? And were you -- was that stable following levels? Did the EV levels rebound after a while?

Yes. So what we did is we got a sample before they went on the machine -- before they went on the device, one at 2 hours into their treatment and one at 4 hours. So at the end of the treatment, and then subsequent weeks 1, 2, 3, 4 and 8 following treatment. And so we saw, again, particularly in the larger EV populations, decreases during the treatment, so at the 2-hour and 4-hour time point. And as -- because EVs are being produced continuously, you do see a rebound usually over the course of a couple of weeks.

And so yes, they do start going back up. So what you'd like to now examine because this is a dose-finding study as well is that with more treatments in a given week, the EVs will both go down further and stay down longer. But we've only got the single treatment so far. So yes, they go down during the treatment, and then they do start rising after a couple of weeks after the treatment.

Which was expected.

And that's totally expected, yes.

I think you mentioned that the follow-up for 8 weeks doing Cohort 1. For Cohort 2, are you expecting to follow them any longer? Or are we still looking at the 8 weeks data in maximum?

Yes. No, the EV and T cell data only goes out to post-treatment week 8. We don't go any further than that.

And that concludes our question-and-answer session. I'd like to turn the conference back over to Jim Frakes for any closing remarks.

I'd like to thank you again for joining us today in our discussion of our fiscal second quarter results, and we look forward to keeping you up-to-date on future calls. Thanks again. Goodbye.

Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.