AETHLON MEDICAL INC 2027 Q1 Earnings Call

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 am the Chief Executive Officer and Chief Financial Officer of Aethlon Medical. At 4:00 P.M. Eastern time today, Aethlon 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 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. I would 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 continued to advance our oncology program while also expanding our evaluation of Hemopurifier 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. I will turn the call over to Dr. LaRosa, who will cover updates on the Australian oncology trial and then on our R&D efforts.

Steve? Thank you, Jim. Before discussing our clinical observations, I want to emphasize that the Hemopurifier remains an investigational device.

Any biomarker observations discussed today are preliminary and are based on a limited number of participants and should not be interpreted as evidence of safety or effectiveness or of clinical benefit. The first participants in our third and final cohort of our Australian oncology trial have been enrolled and treated. This participant received three four-hour Hemopurifier treatments over the course of a one-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 toxicities. We need to only treat 2 additional participants to complete the trial, provided that none of the future participants develops any of these safety events. The three investigative sites remain engaged and are actively pre-screening potential participants.

Our goal remains to complete all HP treatments and the 8-week follow-up central lab measurements period by the end of this year, 2026. The next steps would be analysis of the data, clinical study report completion, and pre-registration clinical trial discussions with regulatory authorities. 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 two four-hour Hemopurifier treatments over the course of one 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 counts, including tumor-derived extracellular vesicles and microRNAs linked to cancer progression following the HP treatment. Additionally, we observed increases in lymphocyte subsets, as well as positive directional changes in laboratory parameter ratios that have been associated with responses to immunotherapy. The changes appeared to be more consistent across participants and persisted for longer in cohort 2 compared with cohort 1, where participants received a single Hemopurifier treatment. Independent formal statistical analyses, including a dose-response analysis, will be performed upon completion of the trial. Segueing now to preclinical R&D activities. Our prior work in long COVID was published in the peer-reviewed journal, International Journal of Molecular Sciences, on the 25th of June 2026.

In this publication, we present data demonstrating that both small and large extracellular vesicles in long COVID patient plasma samples bind to the proprietary GNA affinity resin within our Aethlon Hemopurifier. Furthermore, following exposure of the patient plasma to the resin, a decrease in microRNAs associated with immune dysregulation and inflammation was observed. This data, coupled with the data from an outside group demonstrating the presence of the COVID spike protein and proteins associated with inflammation and abnormal clotting within the EVs of long COVID patients, raises the possibility of EV removal as a potential experimental therapeutic strategy in long COVID. 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 and 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, we had 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% 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, 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. Now, we would be happy to answer any questions that you may have. Operator, please open the call for questions.