Company: AEMD
Filing Date: 2025-06-26
Form Type: 10-K
Source: 0001683168-25-004780
Chunk: 554

Company: AETHLON MEDICAL INC
Filing Date: 2025-06-26
Form: 10-K
Item: Item 2
Chunk 554
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 conformity with accounting principles generally accepted in the United States of America, or GAAP, requires us
to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements. These estimates and assumptions affect the reported amounts of expenses
during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other
factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ
from these estimates under different future conditions.

We believe that the estimates
and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require the
most difficult, subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us.

There were no accounting estimates
in the year ended March 31, 2025 with a high degree of uncertainty or amounts that are with a high likelihood to change from period to
period that would materially impact the presentation of our financial statements for the year ended March 31, 2025.

 57 

Warrant Inducement Transactions

From
time to time, the Company may enter into warrant inducement arrangements, in which modifications to the terms of outstanding equity-classified
warrants—such as reductions in exercise price or the issuance of additional warrants—are offered to incentivize early exercise.
These transactions require significant judgment in determining whether the arrangement constitutes a routine equity modification or a
substantive inducement that should be accounted for as an expense. In making this determination, the Company evaluates the structure and
purpose of the transaction, including whether incremental value was transferred to the holder to accelerate capital inflows. In cases
where the substance of the arrangement reflects an inducement, the Company records the incremental value as an expense in the period the
transaction occurs. Determining the fair value of such inducements and the appropriate timing of recognition involves complex estimates
and careful consideration of the facts and circumstances of each arrangement.

Share-based Compensation

We account for share-based
compensation awards using the fair-value method and record such expense based on the grant date fair value in the consolidated financial
statements over the requisite service period. This requires management to make estimates and assumptions regarding the fair value of the
awards, including the expected term, volatility, risk-free interest rate, and forfeiture rates. These assumptions are inherently subjective
and involve significant judgment. The fair