Company: AEMD
Filing Date: 2025-06-26
Form Type: 10-K
Source: 0001683168-25-004780
Chunk: 359

Company: AETHLON MEDICAL INC
Filing Date: 2025-06-26
Form: 10-K
Item: Item 1B
Chunk 359
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Under the supervision and
with the participation of our management, including our Chief Executive Officer, who also serves as our Chief Financial Officer, we conducted
an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2025. The evaluation was conducted
in accordance with the guidelines established by the Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on this evaluation, and the successful implementation of remediation measures addressing
the previously identified material weaknesses, management concluded that our internal control over financial reporting was effective as
of March 31, 2025.

Remediation of Previously
Reported Material Weaknesses

Segregation of Duties and
User Access Controls

As previously disclosed, management
identified a material weakness in internal control over financial reporting related to segregation of duties and user access controls
within our financial systems. Specifically, the Company had not adequately maintained user access controls to restrict both user and privileged
access to financial applications, allowing the same individual to initiate, record, and approve accounting entries. Additionally, check
stock was stored in the office of an authorized signatory, representing a weakness in physical access control.

This control deficiency was
due in part to our limited accounting and finance staff, which hindered the design and implementation of effective segregation of duties.
The lack of adequate user access controls and the absence of sufficient compensating controls could have resulted in a material misstatement
of the financial statements.

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To remediate this material
weakness, the Company implemented the following measures:

·In
November 2023, check stock was relocated to a secure area accessible only to individuals without check signing authority, to mitigate
unauthorized access risks. Subsequently, the Company discontinued maintaining any physical check stock onsite. While the Company continues
to issue physical checks as needed, these are processed exclusively through the bank’s controlled check issuance services, eliminating
the risk associated with onsite check stock and enhancing control over disbursements.

·In
May 2024, the Company completed an upgrade to its accounting software, enabling the establishment of distinct user roles and system access
controls. While certain individuals may both initiate and record transactions due to the size of the finance team, all transactions are
reviewed and approved by personnel independent of those entering the transactions. Management has tested the design and operating effectiveness
of these new controls and concluded that the material weakness was remediated as of March 31,