Aethlon Medical Q1 FY2026 Earnings Call - Hemopurifier Oncology Trial Advances to Final Cohort

Conference Call Operator: 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.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Thank you, operator. 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 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. The Securities Exchange Act of 1934, as amended. The company cautions you that any state 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. 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 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 continued 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. 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?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Thank you, Jim. Enrollment and treatment of participants in cohort 2 of our Australian oncology trial have been completed. As a reminder, three participants in cohort 2 received two four-hour Hemopurifier treatments during a one-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 three investigative sites for this final cohort, where three to six participants will be treated with three Hemopurifier sessions during a one-week period. The first participant in cohort 3 of the study has been enrolled and received three 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 three 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 nine 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, I 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 dyed fluid to the Hemopurifier. These assessments have been completed and were successful.

Future studies being considered right now include 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 six and a half-hour Hemopurifier treatment of a critically ill Ebola patient with multi-organ failure was associated with a two-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.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Thanks, Steve, and good afternoon again, everyone. Turning briefly to the financials, as of March 31st, 2026, we had approximately $5 million in cash and cash equivalents, which provides 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 non-cash financing-related charges. 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. 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. Now, we would be happy to answer any questions that you may have. Operator, please open the call for questions.

Conference Call Operator: Thank you. To ask a question, you may press star then one on your telephone keypad. If you’re using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question comes from Marla Marin with Zacks. Please go ahead.

Marla Marin, Analyst, Zacks: Thank you. A lot going on. 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 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.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: I believe the Ebola protocol is relevant only to Ebola, so it would be up to 20 Ebola patients at 10 centers.

Marla Marin, Analyst, Zacks: Got it. Okay.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Steve, do you want to

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: No, that compassion use protocol is specific to Ebola.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Right.

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: It’s 20 patients at up to 10 centers.

Marla Marin, Analyst, Zacks: Okay, got it. It’s completely separate from the patients that you had treated in the past under emergency.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Yes.

Marla Marin, Analyst, Zacks: Yes. Okay, got it.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: That is correct.

Marla Marin, Analyst, Zacks: 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. Can you give us some color and also some sense of what the timeline there is?

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: You want to take that or should I?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Sure. 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 a 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 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. That work is currently underway. With the chronic kidney, We 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. We have purchased small samples of chronic kidney disease plasma, and we’re testing them for binding to the resin in our device. Again, that work’s being done in-house as well.

Marla Marin, Analyst, Zacks: How should we think about next steps there? In the past, I know you’ve contributed to working on peer-reviewed papers. You’ve presented at different medical presentations. How should we think about next steps depending upon the outcome of the testing that you’re doing now?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Yeah, sure. 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. 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 have an addition to a preprint, an 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, we would then plan on turning that into an abstract at a medical meeting and a peer-reviewed publication.

Again, trying to fill the preclinical pipeline.

Marla Marin, Analyst, Zacks: Right. Got it. Building your database in the most cost-effective way that you can. Is that the right way to think about it?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Yeah. I think that’s a good way to say it.

Marla Marin, Analyst, Zacks: Okay. Then last question from me. You’ve treated the first participant in cohort 3, and I think at your last conference call, you said 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 participants?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Yeah, no, we’ve seen good engagement and commitment from our three sites in terms of screening activity, 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. The most important thing for me is that the engagement is there and the activity is there.

Marla Marin, Analyst, Zacks: Okay. Thank you.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Thank you, Marla.

Conference Call Operator: The next question comes from Anthony Vendetti with Maxim Group. Please go ahead.

Anthony Vendetti, Analyst, Maxim Group: Yes, thanks. 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. 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?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Yeah. Remember, the primary endpoint for this study is safety.

Anthony Vendetti, Analyst, Maxim Group: Right.

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Secondary endpoint is surrogate markers, looking at the Hemopurifier’s activity, and those would be EV removal, extracellular vesicle removal, and effects on T cells, including anti-tumor 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 in T cells in the right direction. As I just said, we’ve just received measurements from cohort 2. 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 three different dosing regimens. That will look at magnitude of EV decreases and duration of EV decreases as comparing the three 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 clinical efficacy.

Anthony Vendetti, Analyst, Maxim Group: 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?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: 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.

Anthony Vendetti, Analyst, Maxim Group: Yeah

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: that there were improvements in T cells and anti-tumor T cells in the first cohort.

Anthony Vendetti, Analyst, Maxim Group: Okay, any biomarkers or exosome-related findings that have emerged as well? I guess the EVs is what you’re talking about.

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: In the first cohort, of particular interest to us was that EVs carrying PD-L1 on their surface went down during the treatments. These particular population of EVs have been implicated as a cause of resistance to anti-PD-1 therapy. 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. That was of particular interest to me, at least.

Anthony Vendetti, Analyst, Maxim Group: Okay. 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?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Correct.

Anthony Vendetti, Analyst, Maxim Group: Okay, good. Okay. Thank you very much. I’ll hop back in the queue. Appreciate it.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: Thank you, Anthony.

Conference Call Operator: The next question comes from Jeremy Pearlman with Maxim Group. Please go ahead.

Jeremy Pearlman, Analyst, Maxim Group: Hello?

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Hi, Jeremy.

Jeremy Pearlman, Analyst, Maxim Group: Yeah. I didn’t dial in. I think the operator by accident did that. I’m sorry. Anthony already asked the question. Thank you.

Dr. Steven LaRosa, Chief Medical Officer, Aethlon Medical: Got it. Okay.

Conference Call Operator: 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.

Jim Frakes, Chief Executive Officer and Chief Financial Officer, Aethlon Medical: 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.

Conference Call Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.