AETHLON MEDICAL INC

September 30, 2026

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Aethlon Medical, Inc., or Aethlon, the Company, we or us, is a medical therapeutic company focused on developing the Hemopurifier® (HP), a clinical-stage investigational immunotherapeutic device designed to address unmet needs in oncology, life-threatening infectious diseases, organ transplantation and other disease states in which extracellular vesicles (EVs) contribute to disease progression. The Hemopurifier utilizes a proprietary lectin-based technology to bind and remove enveloped viruses and EVs from biological fluids. EVs have been associated with immune suppression, metastasis, and resistance to therapy in cancer, as well as progression of severe infectious diseases.

In pre-clinical studies, the Hemopurifier has also demonstrated the ability to bind disease-associated extracellular vesicles (“EVs”) and a panel of enveloped viruses. The Hemopurifier has been evaluated in human studies, involving 179 treatment sessions in 46 patients with either viral infections or cancer. The device has been well tolerated with an adverse event profile that is consistent with extracorporeal therapy. In certain human studies designed to evaluate viral clearance from biological fluids, findings demonstrated the removal of enveloped viruses. The U.S. Food and Drug Administration (“FDA”) has granted the Hemopurifier “Breakthrough Device” designation for two independent indications:

Three clinical sites in Australia, including Royal Adelaide Hospital in Adelaide, Pindara Private Hospital in the Gold Coast, and GenesisCare North Shore Hospital in Sydney, are currently participating in our safety, feasibility and dose-finding oncology trial in patients with solid tumors not responding to treatment, including either Keytruda® or Opdivo®. The trial is designed to enroll approximately 9 to 18 patients across three sequential dosing cohorts evaluating the safety and feasibility of the Hemopurifier. During the first fiscal quarter of 2027, we initiated Cohort 3 and treated the first participant in this cohort. During the second fiscal quarter of 2027, we treated a second participant in Cohort 3. At the time of this filing, the trial remained ongoing, and we continued our efforts to complete the study.

The Hemopurifier is designed to address life-threatening viral infections, particularly those involving highly glycosylated viruses for which there are no approved therapies. It has previously been used under FDA and international regulatory frameworks to treat individuals infected with HIV, hepatitis C, Ebola and SARS-CoV-2. While our COVID-19 clinical trials in the U.S. and India have been terminated due to low ICU enrollment, these programs provided real-world evidence of Hemopurifier use in critically ill patients. We maintain an open Investigational Device Exemption (“IDE”) for viral indications, preserving the ability to respond to future outbreaks or emerging pathogens.

In addition to our ongoing clinical development program, we have conducted pre-clinical research and academic collaborations to explore potential additional applications of the Hemopurifier. During the first fiscal quarter of 2027, our manuscript entitled*“Increased Mannosylation of Extracellular Vesicles in Long COVID Plasma Provides a Potential Therapeutic Target for Galanthus nivalis Agglutinin (GNA) Affinity Resin”* was accepted for publication in the International Journal of Molecular Sciences. The manuscript describes exploratory ex vivo laboratory research conducted in collaboration with the University of California, San Francisco Long COVID Clinic examining extracellular vesicle characteristics in plasma samples from individuals with Long COVID. Our research has also included preclinical investigations of the Hemopurifier’s ability to remove disease-relevant extracellular vesicles including platelet-derived extracellular vesicles implicated in cancer, autoimmune disease and neurological disorders. These research activities have helped inform potential future clinical indications and the broader potential applications of the Hemopurifier platform.

On September 17, 2026, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with North Immunology, Inc. (“North Immunology”) and two wholly owned subsidiaries of the Company, pursuant to which the parties agreed to effect a two-step merger transaction (the “Merger”). Upon completion of the proposed merger, the combined company is expected to operate under the name North Immunology, Inc.

As part of the proposed transaction, North Immunology has entered into agreements for a private placement expected to generate approximately $180 million in gross proceeds, including the conversion of approximately $34 million of its outstanding convertible promissory notes, accrued interest, premiums and fees. Following completion of the transaction, the combined company will operate under the name North Immunology, Inc. and focus on developing North Immunology’s pipeline, led by NOR-101, an investigational antibody being developed for atopic dermatitis (“AD”) and other immune-mediated diseases. The transaction is expected to close in the first quarter of calendar 2027, subject to stockholder approvals, effectiveness of the registration statement to be filed with the SEC, Nasdaq approval of the combined company’s initial listing application and satisfaction of other customary closing conditions. As of November 12, 2026, the transaction had not been completed.

In connection with the Merger, holders of the Company’s common stock are expected to receive a contingent value right (“CVR”) pursuant to a contingent value rights agreement to be entered into in connection with the closing. The CVRs will provide holders with the right to receive certain contingent payments, if any, derived from the future monetization of the Company’s legacy Hemopurifier business, subject to the terms and conditions of the CVR agreement. There can be no assurance that any monetization transaction will occur or that CVR holders will receive any payment.

In anticipation of the transition of our legacy business contemplated by the Merger Agreement, we implemented workforce reductions near the end of the second fiscal quarter. Following these reductions, we retained key personnel necessary to maintain corporate and regulatory compliance and manage our ongoing Australian oncology clinical trial. We remained operational as of November 12, 2026, and continued efforts to advance the clinical trial. The Merger Agreement contemplates the wind-down of certain activities associated with our legacy business upon and contingent on the closing of the transaction. The timing and extent of any further changes to our operations will depend on the progress and outcome of the proposed transaction, our available resources and other factors. There can be no assurance that the proposed transaction will be completed on the anticipated terms or within the anticipated timeframe, or at all.

Regulatory approval of the Hemopurifier, if obtained, will be necessary before we can market the device for applicable indications in the United States and certain foreign jurisdictions. The timing and likelihood of obtaining any such approvals remain uncertain. In addition, certain of our patents may expire before the Hemopurifier receives regulatory approval, if any. We rely on our existing patents and pending patent applications to help protect our proprietary technology. Our future development and commercialization plans for the Hemopurifier will depend, in part, on the status and outcome of the proposed merger with North Immunology and any resulting changes to our business and operations.

Summary of Significant Accounting Policies

During the six months ended September 30, 2026, there were no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Reverse Stock Split

On July 31, 2026, the Company effected a 1-for-5 reverse stock split of its issued and outstanding shares of common stock. The Company’s common stock began trading on a split-adjusted basis on the Nasdaq Capital Market on August 4, 2026. All share and per share amounts presented in the accompanying unaudited condensed consolidated financial statements and the accompanying notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.

**Basis of Presentation **

Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 8 of the Securities and Exchange Commission, or SEC, Regulation S-X. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended March 31, 2026, included in our Annual Report on Form 10-K filed with the SEC on June 10, 2026.

The accompanying unaudited condensed consolidated financial statements include the accounts of Aethlon Medical, Inc. and its wholly owned subsidiary, Aethlon Medical Australia Pty Ltd. All significant inter-company transactions and balances have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements, taken as a whole, contain all adjustments, consisting only of normal recurring adjustments, considered necessary to fairly present the Company’s financial position as of September 30, 2026, its results of operations and comprehensive loss for the three and six months ended September 30, 2026, and its cash flows for the six months ended September 30, 2026.

The condensed consolidated balance sheet at March 31, 2026 has been derived from the audited consolidated balance sheet at March 31, 2026, contained in the above referenced 10-K and has been retrospectively adjusted to reflect the reverse stock split described above, including the related adjustments to Common Stock and Additional Paid-in Capital.

The results of operations for the six and three months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full year or any future interim periods.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates include, but are not limited to, stock-based compensation, accrued clinical trial costs, research and development expenses, the useful lives of long-lived assets, and other accrued liabilities. Actual results could differ materially from those estimates.

Liquidity and Going Concern

The Company evaluates its ability to continue as a going concern for at least twelve months from the date the accompanying condensed consolidated financial statements are issued. As of September 30, 2026, the Company had cash and cash equivalents of approximately $6.5 million.

In connection with the proposed Merger with North Immunology, the Company has implemented workforce reductions and other cost-saving measures to reduce operating expenditures. Based on management’s current estimates of operating expenditures, remaining clinical trial costs and other anticipated obligations, management believes that the Company’s existing cash resources will be sufficient to fund its current reduced operating plan for at least twelve months from the date these financial statements are issued, even if the proposed Merger is not consummated.

If the Merger is consummated, the Company expects the combined company to have sufficient financial resources to fund its operations for at least twelve months following the closing of the Merger, based on the anticipated financing and operating plan.

If the proposed merger is not consummated, the Company expects to continue operating under its current reduced operating plan, including completing its ongoing Australian oncology clinical trial. In such circumstances, the Company would not incur anticipated severance obligations or the approximately $1.0 million cash success fee payable to its M&A advisory firm in connection with the proposed Merger. The Company may, however, incur other costs or obligations depending on the circumstances surrounding termination of the Merger Agreement.

Following completion of the clinical trial, the Company would evaluate its future development strategy. Any resumption or expansion of clinical development activities beyond those currently contemplated would require additional capital, and there can be no assurance that such financing would be available on acceptable terms, or at all.

Based on its assessment, management concluded that there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date these financial statements are issued.

Restricted Cash

As of September 30, 2026, we maintained a restricted cash balance of $99,375 in an interest-bearing money market deposit account with JPMorgan Chase, which supports our lease obligations. This balance includes a $5,000 amount additionally restricted by the bank above the amount required under our lease arrangements.

2. LOSS PER COMMON SHARE

Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional dilutive common shares that would have been outstanding if potential common shares had been issued, if such additional common shares were dilutive. Since we had net losses for all periods presented, basic and diluted loss per share are the same, and additional potential common shares have been excluded, as their effect would be antidilutive.

As of September 30, 2026 and 2025, an aggregate of 1,572,027 and 147,430 potential common shares, respectively, consisting of shares underlying outstanding stock options, warrants, and restricted stock units were excluded, as their inclusion would be antidilutive.

3. RESEARCH AND DEVELOPMENT EXPENSES

Our research and development costs are expensed as incurred and consist of costs associated with clinical trials, preclinical research, personnel, including salaries, payroll taxes and employee benefits, consulting and professional fees, and other expenditures incurred to support the development of the Hemopurifier. Research and development expenses are included in various operating expense line items in the accompanying condensed consolidated statements of operations.

Research and development expenses were as follows:

During the three and six months ended September 30, 2026, we had not recognized an R&D tax incentive related to our clinical trial activities conducted in Australia, resulting in a timing variance compared to the same periods in 2025. The Australian R&D incentive is a government program that provides refundable tax offsets for eligible research and development expenditures incurred in Australia. The incentive is recorded as a reduction of research and development expense when the related qualifying expenditures are incurred and receipt of the credit is considered probable. During the three and six months ended September 30, 2025, we recognized approximately $218,000 related to this incentive, which reduced reported research and development expense for those periods. As of September 30, 2026, we had not received the credit.

4. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2024, the FASB issued Accounting Standards Update 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”), which requires public business entities to provide enhanced annual and interim disclosures that disaggregate specified income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact that adoption of this guidance may have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10,Government Grants (Topic 832), which establishes guidance related to the recognition, measurement, presentation, and disclosure of government grants. ASU 2025-10 is effective for annual periods beginning after December 15, 2028, and interim periods after December 15, 2028, with early adoption permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and disclosures.

5. EQUITY TRANSACTIONS IN THE SIX MONTHS ENDED SEPTEMBER 30, 2026

At-the-Market Sales

During the six-months ended September 30, 2026, the Company sold shares of its common stock pursuant to its at-the-market (“ATM”) offering program, generating gross proceeds of approximately $1,904,000. After deducting offering costs of approximately $83,000, net proceeds were approximately $1,821,000. The net proceeds were used for working capital and other general corporate purposes.

Registered Public Offering

On July 7, 2026, the Company completed a registered best-efforts public offering consisting of 52,600 shares of common stock, pre-funded warrants to purchase 1,074,002 shares of common stock, and accompanying common warrants to purchase up to 1,126,602 shares of common stock. In addition, the Company issued placement agent warrants to purchase up to 45,064 shares of common stock.

The offering generated gross proceeds of approximately $4.0 million, before deducting placement agent fees and other offering expenses. The accompanying common warrants have an exercise price of $3.55 per share, became exercisable following stockholder approval on October 1, 2026 and expire five years from the date of issuance. The pre-funded warrants have an exercise price of $0.005 per share (as adjusted post reverse split) and remain exercisable until exercised in full. As of the date of this report, all outstanding pre-funded warrants have been exercised, resulting in the issuance of shares of common stock.

Restricted Stock Unit Settlements

During the three- and six-months ended September 30, 2026,3,272 and 6,546 shares were issued upon settlement of 4,363 and 8,726 RSUs, respectively, net of shares withheld to satisfy applicable tax withholding obligations.

6. RELATED PARTY TRANSACTIONS

The Company incurs fees for services provided by its non-employee directors, which are generally paid in the quarter following the quarter in which they are earned. During the three months ended September 30, 2026, we accrued unpaid fees of $68,250 owed to our non-employee directors. In the six-months ended September 2026 and September 2025 we accrued $136,500 for board fees and paid out an aggregate of $136,500.

7. OTHER CURRENT LIABILITIES

Other current liabilities were comprised of the following items:

8. STOCK COMPENSATION

Stock Option Activity

No stock options were granted, exercised, forfeited, canceled or expired during the six months ended September 30, 2026 or 2025.

As of September 30, 2026, the Company had 135 stock options outstanding, all of which were exercisable, with a weighted-average exercise price of $6,521 and a weighted-average remaining contractual term of 4.61 years.

As of September 30, 2026, the aggregate intrinsic value of the Company’s outstanding stock options waszero.

The Company recognized stock-based compensation expense of $50,000 and $72,442 for the three months ended September 30, 2026 and 2025, respectively and $100,000 and $144,884 for the six months ended September 30, 2026 and 2025, respectively. Stock-based compensation expense recognized during the three and six months ended September 30, 2026 related solely to restricted stock units, while the expense recognized during the three and six months ended September 30, 2025 related to both restricted stock units and stock options. Stock-based compensation expense is included in payroll and related expenses in the accompanying condensed consolidated statements of operations.

The following table summarizes nonvested restricted stock unit (“RSU”) activity during the six months ended September 30, 2026:

As of September 30, 2026, there was approximately $100,000 of total unrecognized stock-based compensation expense related to nonvested RSUs, which is expected to be recognized over a weighted-average period of 0.50 years.

9. WARRANTS

We issued 1,171,666 in warrants in the three-months ended September 30, 2026 in connection with our July 7, 2026 offering. We issued 104,000 warrants in connection with our September 5, 2025 offering during the three-months ended September 30, 2025. As of September 30, 2026, the Company had 1,563,166 warrants outstanding, of which 391,500 were exercisable. The outstanding warrants had exercise prices ranging from $3.55 to $232 per share and a weighted-average exercise price of $10.77 per share. The warrants issued in connection with the July 2026 offering were not exercisable until after October 1, 2026, upon receipt of shareholder approval.

10. COMMITMENTS AND CONTINGENCIES

On September 17, 2026, the Company entered into a Plan of Merger and Reorganization (the “Merger Agreement”) with North Immunology, Inc. (“North Immunology”) and two wholly owned subsidiaries of the Company, pursuant to which the parties agreed to effect a two-step merger transaction (the “Merger”). The Merger is expected to close in the first quarter of calendar 2027, subject to stockholder approvals, effectiveness of the registration statement to be filed with the SEC, Nasdaq approval of the combined company’s initial listing application and satisfaction of other customary closing conditions. As of November 12, 2026, the Merger had not been completed.

In connection with the contemplated merger, the Company has agreed to pay an M&A advisory fee of approximately $1.0 million upon consummation of the transaction. Additionally, certain executive employment agreements contain change-in-control provisions that require the Company to make severance and related benefit payments in the event of a change in control and the satisfaction of specified termination conditions. Under the applicable agreements, certain executives are required to tender their resignations upon closing of the merger, which would trigger the applicable severance payment obligations. The Merger Agreement also provides that, under specified circumstances, the Company may be required to pay North Immunology a termination fee of $300,000.

As of September 30, 2026, the merger has not been consummated and remains subject to the satisfaction of the applicable closing conditions. Accordingly, the advisory fee and severance payments have not become payable as of the reporting date. No liabilities have been recorded in connection with these arrangements as the applicable recognition criteria have not been met. The Company will recognize the related expenses and liabilities, as applicable, when the relevant contractual and accounting recognition criteria are satisfied.

The aggregate potential severance obligations under the employment agreements are approximately $1.5 million.

LEASE COMMITMENTS

Operating Leases

The Company leases office, laboratory and manufacturing facilities under noncancelable operating lease agreements that expire on March 31, 2027. In connection with the pending merger, the Company does not intend to renew these lease agreements upon expiration. Any future facility needs will depend on the outcome of the pending merger. There were no material changes to the Company’s lease arrangements during the three months ended September 30, 2026. As of September 30, 2026, the Company had operating lease right-of-use assets of $155,699 and operating lease liabilities of $172,116. Cash paid in the three months ended September 30, 2026 for amounts included in the measurement of operating lease liabilities in operating cash flows was $85,053.

Premium Financing Agreement

In January 2026, the Company entered into a short-term premium financing agreement to finance a portion of its directors’ and officers’ liability and other insurance premiums. The outstanding balance under the agreement as of September 30, 2026 was $45,527, which is included in other current liabilities in the accompanying condensed consolidated balance sheets.

Legal Matters

We may be involved from time to time in various claims, lawsuits, and/or disputes with third parties or breach of contract actions incidental to the normal course of our business operations. As of September 30, 2026, the Company was not a party to any material pending legal proceedings.

11. SEGMENT REPORTING

The Company operates as asingle operating and reportable segment, which reflects how the Chief Operating Decision Maker (“CODM”), the Company’s Chief Executive Officer, manages the business and allocates resources. The Company is a development-stage medical technology company focused on advancing a clinical-stage therapeutic device. The CODM evaluates operating performance and allocates resources primarily evaluating cash burn and liquidity and operating loss in relation to the Company’s development milestones and expected future manufacturing and commercialization activities. In assessing cash runway, the CODM regularly reviews significant operating expense categories to evaluate whether spending is consistent with the Company’s cash flow projections and to determine whether the timing or level of discretionary expenditures should be adjusted to preserve cash resources while advancing the Company’s development objectives.

In accordance with ASU 2023-07, the following significant expense categories and performance measures were regularly reviewed by the CODM for the three and six months ended September 30, 2026 and 2025:

Amounts presented are rounded to the nearest thousand.

Research and development expense represents internally reported expenditures attributable to the Company’s research and development activities, including personnel, clinical trial execution, professional services and other costs supporting the advancement of the Company’s Hemopurifier® technology. These costs are derived from multiple operating expense captions presented in the condensed statements of operations.

Research and development expense for the periods presented reflects a year-over-year timing difference related to the Australian R&D tax incentive, as no incentive had been recognized during the three and six months ended September 30, 2026, compared to approximately $218,000 recognized during the same periods in 2025.

Other operating expenses represent all remaining operating expenses incurred to support the Company’s business. Research and development expense and other operating expenses together reconcile to total operating expenses presented in the condensed statements of operations.

The Company does not allocate assets to operating segments The CODM evaluates the Company’s performance primarily using operating loss and cash burn, together with research and development expenses and other operating expenses. There were no changes in the internal reports regularly provided to or reviewed by the CODM during the periods presented.

Entity-Wide Information:

12. SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the accompanying condensed consolidated financial statements were issued.

On October 7, 2026, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State, increasing the number of authorized shares of common stock from 20,000,000 to 200,000,000, as approved by the Company’s stockholders on October 1, 2026.

Effective October 1, 2026, the Company’s 2020 Equity Incentive Plan was amended to increase the number of shares authorized for issuance thereunder by 100,000 shares.

In addition, on October 1, 2026, the Company’s common warrants issued in connection with its July 2026 registered public offering became exercisable following receipt of the requisite stockholder approval.