Company: AEMD
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001683168-25-008271
Chunk: 22

Company: AETHLON MEDICAL INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 22
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 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. RECEIVABLE FROM AUSTRALIAN RESEARCH AND DEVELOPMENT
TAX INCENTIVE (R&DTI)

During the three months ended September 30, 2025,
we submitted a tax return to the Australian tax authorities covering our research and development operations in Australia related to our
clinical trial in that country under their R&DTI. In October 2025, we received a payment under the R&DTI of Australian $330,179,
which was the equivalent to US $218,314. We present all research and development amounts within general and administrative expenses; therefore,
the US $218,314 was recorded as a receivable on our September 30, 2025 balance sheet and as a reduction to general and administrative
expenses (see Note 3).

12. 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 table summarizes key financial information reviewed by the CODM to evaluate
operating performance and cash utilization. All amounts presented exclude the Australian R&D tax incentive credit of approximately
$218,000.

    Schedule of significant expense categories 

    Category 
    Three Months Ended  
    Six Months Ended