Company: AEMD
Filing Date: 2025-06-26
Form Type: 10-K
Source: 0001683168-25-004780
Chunk: 59

Company: AETHLON MEDICAL INC
Filing Date: 2025-06-26
Form: 10-K
Item: Item 1
Chunk 59
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 the application of the tax laws of various jurisdictions, including the United States, to our international
business activities, tax rates, new or revised tax laws, or interpretations of tax laws and policies, and our ability to operate our business
in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which
we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree
with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were
to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result
in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial
statements could fail to reflect adequate reserves to cover such a contingency. Similarly, a taxing authority could assert that we are
subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a “permanent
establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability
in one or more jurisdictions.

The Tax Cuts and Jobs Act
of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers
to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over
15 years for research activities conducted outside the United States. Although there have been legislative proposals to repeal or defer
the capitalization requirement to later years, there can be no assurance that the provision will be repealed or otherwise modified. Future
guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects
of such legislation could be repealed or modified in future legislation.

 34 

Our use of hazardous materials, chemicals
and viruses exposes us to potential liabilities for which we may not have adequate insurance.

Our research and development
involves the controlled use of hazardous materials, chemicals and viruses. The primary hazardous materials include chemicals needed to
construct the Hemopurifier cartridges and the infected plasma samples used in preclinical testing of the Hemopurifier. All other chemicals
are fully inventoried and reported to the appropriate authorities, such as the fire department, which inspects the facility on a regular
basis. We are subject to federal, state, local and foreign laws governing the use, manufacture, storage