Company: AEMD
Filing Date: 2025-06-26
Form Type: 10-K
Source: 0001683168-25-004780
Chunk: 355

Company: AETHLON MEDICAL INC
Filing Date: 2025-06-26
Form: 10-K
Item: Item 1B
Chunk 355
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 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.

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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 value of stock options is typically determined using the Black-Scholes option pricing model.
Compensation expense is recognized over the vesting period of the awards in a manner that reflects the service period or any applicable
performance conditions.

RSU Grants to Non-Employee Directors

The Company maintains the
Amended and Restated Non-Employee Director Compensation Policy, or the Director Compensation Policy, which provides for cash and equity
compensation for persons serving as non-employee directors of the Company. Under this policy, each new director receives either stock
options or a grant of RSUs upon appointment/election, as well as either an annual grant of stock options or of RSUs at the beginning