Company: AEMD
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001683168-25-006049
Chunk: 19

Company: AETHLON MEDICAL INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 19
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 priority security interest in the financed insurance policies, including all unearned premiums, dividends, credits,
and certain loss payments. In the event of default, cancellation, or early termination of the policies, the lender has the right to collect
any unearned premiums and apply them against the remaining loan balance.

This arrangement is classified as a short-term liability
within other liabilities on the balance sheet (See Note 7) and is recorded net of any prepaid portions of the insurance policies.

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.
We are currently not involved in any litigation or any pending legal proceedings.

11. SEGMENT REPORTING

The Company operates as a single 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, with
key operational decisions driven by cash availability, development milestones, and the expected return on investment associated with future
manufacturing and commercialization efforts.

Although the Company does not generate commercial revenue, the CODM regularly
reviews certain expense categories and cash flow metrics to monitor progress and inform resource allocation. The primary internal performance
measure used by the CODM is cash used in operating activities, rather than traditional profit or loss metrics.

     16 

In accordance with ASU 2023-07, which the Company
adopted for the fiscal year ended March 31, 2025, the following significant expense categories and internal performance measures were
reviewed by the CODM during the three months ended June 30, 2025 and 2024:

    Schedule of significant expense categories 

    Category 
    Three Months Ended 

    June 30, 2025  
    June 30, 2024 
  
    Research and development¹ 
    $524,000  
    $415,000 
  
    General and administrative² 
    $735,000  
    $752,000 
  
    Cash used in operating activities³ 
    $1,715,000  
    $1,748,000 

Amounts in this table are rounded to the nearest thousand.

  ¹
  Research and development expenses primarily include costs related to laboratory operations, clinical trial execution, investigational
device