Company: AEMD
Filing Date: 2025-06-26
Form Type: 10-K
Source: 0001683168-25-004780
Chunk: 2001

Company: AETHLON MEDICAL INC
Filing Date: 2025-06-26
Form: 10-K
Item: Item 8
Chunk 2001
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of these new controls and concluded that the material weakness was remediated as of March 31, 2025.

Accounting for Accrued Commission Liabilities

The Company also previously
identified a material weakness in internal control over financial reporting related to the accounting for accrued commission liabilities.
From fiscal 2017 through fiscal 2020, the Company incorrectly recorded commission accruals totaling approximately $404,000. This error
arose due to the incorrect application of U.S. GAAP and the absence of adequate review controls, and it was not identified and corrected
in a timely manner.

The Company reversed the erroneous
accrued commission liability during the year ended March 31, 2024, with the correction reflected as a reclassification to equity. To prevent
recurrence, the Company implemented quarterly controls during fiscal 2025 for the review and validation of accruals, including those related
to commissions. These controls include formal procedures for the assessment of accrual balances, with overall oversight provided by the
Audit Committee in connection with its review of the Company’s financial reporting.

Management has evaluated the design and operating
effectiveness of these controls and concluded that the material weakness was remediated as of March 31, 2025.

Limitations on Internal Control Over Financial
Reporting

Management recognizes that
a system of internal control over financial reporting, no matter how well designed and operated, can provide only reasonable assurance
and may not prevent or detect all material misstatements. Internal control over financial reporting has inherent limitations, including
the possibility of human error, the circumvention or overriding of controls, or changes in conditions that may render controls inadequate.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions or because the degree of compliance with the policies or procedures may deteriorate.

    (b)
    Changes in Internal Control Over Financial Reporting

There was no change in our
internal control over financial reporting during the last fiscal quarter ended March 31, 2025 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

During the three
months ended March 31, 2025, none of our directors or officers entered into, modified or terminated a
“Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” that were intended to satisfy the
affirmative defense conditions of Rule