<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934.

         For the quarterly period ended September 30, 2000

                                      OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934.

         For the transition period from __________ to __________

Commission file number 0-21846

                              AETHLON MEDICAL, INC.
             (Exact name of registrant as specified in its charter)


               NEVADA                               13-3632859
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                   Identification No.)

7825 FAY AVENUE, SUITE 200, LA  JOLLA, CA               92037
------------------------------------------          --------------
(Address of principal executive offices)              (Zip Code)

                                 (858) 456-5777
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes  X    No      .
                                                  -----     -----
               Number of shares of common stock outstanding
                       on September 30, 2000 2,771,652

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1. Financial Statements

Consolidated Balance Sheets (unaudited) at September 30, 2000 (unaudited)
and March 31, 2000

Consolidated Statements of Operations (unaudited) for the three and six months
ended September 30, 2000 and September 30, 1999

Consolidated Statements of Cash Flows (unaudited) for the six months ended
September 30, 2000 and September 30, 1999

Consolidated Statement of Stockholders' Deficiency (unaudited)

Notes to Consolidated Financial Statements

ITEM 2.  Management's Discussion and Analysis or Plan of Operation


PART II.  OTHER INFORMATION

SIGNATURES


                                       2

<PAGE>


                                    PART I

                             FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS





                                       3

<PAGE>

                      AETHLON MEDICAL, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                            CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              September 30,
                                                                   2000           March 31,
                                                                (unaudited)          2000
<S>                                                           <C>                <C>
              ASSETS

CURRENT ASSETS
  Cash                                                          $     1,677      $   217,017
  Accounts receivable                                                47,312           61,495
  Prepaid expenses                                                   24,764           36,940
  Employee advances                                                  12,300           15,800
                                                           ----------------------------------

     Total current assets                                            86,053          331,252

PROPERTY AND EQUIPMENT, NET                                          34,683           41,535

OTHER ASSETS
  Patents and trademarks, net                                       401,759          177,065
  Deferred debt expense, net                                        166,567          273,738
  Goodwill, net                                                   1,600,544          495,088
  Other                                                               1,330            1,330
                                                           ----------------------------------

     Total other assets                                           2,170,200          947,221
                                                           ----------------------------------

     Total assets                                               $ 2,290,936      $ 1,320,008
                                                           ==================================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES

  Accounts payable:
    Trade                                                         $ 903,240        $ 740,562
    Related parties                                                 236,964          234,324
  Notes payable, net of discount                                  1,043,453          526,708
  Accrued liabilities                                               287,906          201,631
  Deferred compensation                                             329,835          329,835
                                                           ----------------------------------

     Total current liabilities                                    2,801,398        2,033,060

STOCKHOLDERS' DEFICIENCY
 Common stock - $.001 par value
   25,000,000 shares authorized; 2,771,652 and
   2,672,500 shares issued and outstanding                            2,772            2,673
 Additional paid in capital - common stock                        4,092,132        3,290,865
 Additional paid in capital - warrants and options                1,481,237          739,826
 Deficit accumulated during development stage                    (6,086,603)      (4,746,416)
                                                           ----------------------------------

     Total stockholders' deficiency                                (510,462)        (713,052)
                                                           ----------------------------------

     Total liabilities and stockholders' deficiency              $2,290,936      $ 1,320,008
                                                           ==================================
</TABLE>

                             See accompanying notes.


                                       4

<PAGE>

                     AETHLON MEDICAL, INC. AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                                 Cumulative During
                                                                                                                 Development Stage
                                                  Three months ended                 Six months ended                through
                                            September 30,     September 30,    September 30,     September 30,      September 30,
                                                 2000             1999              2000             1999               2000
<S>                                       <C>                 <C>            <C>                 <C>             <C>
REVENUE
 Grant income                                 $         -      $         -     $          -       $         -       $  1,430,799
 Subcontract income                                     -                -                -                 -             73,746
 Sale of research and development                       -                -                -                 -             35,810
 Other income                                       1,158                -           22,479                 -             53,476
 Interest income                                        -                -                -                 -             17,415
                                           --------------------------------------------------------------------------------------

     Total revenue                                  1,158                -           22,479                 -          1,611,246

EXPENSES
 Interest and debt expense                        352,949           25,190          667,147            25,805          1,182,993
 Personnel costs                                  184,654          116,606          345,706           204,693          3,650,831
 Professional fees                                 46,801           75,060          100,240           140,789            671,478
 Amortization-goodwill                             43,721                -           84,907                 -             97,602
 Rent and office expense                           32,206           18,758           61,328            34,158            553,042
 Insurance                                         16,751            6,271           33,463             6,271            123,949
 Travel and meetings                                7,133            5,631           19,878             9,471            164,033
 Laboratory supplies                                7,249                -           13,731                 -            116,114
 Miscellaneous                                     13,288            3,502           17,402             3,520            122,332
 Depreciation                                       3,788            2,439            7,833             4,764            142,751
 Amortization-patents                               2,043            3,502            4,086             5,545             46,985
 Equipment and maintenance                          3,513                -            5,480                 -            170,802
 R & D consultation                                     -                -                                  -            240,463
 Subcontract expense                                    -                -                                  -            195,964
 Contractual costs                                      -                -                                  -            192,112
 Dues and subscriptions                                 -                -                                  -             13,596
                                           --------------------------------------------------------------------------------------

     Total expenses                               714,096          256,959        1,361,201           435,016          7,685,047

LOSS BEFORE INCOME TAXES                         (712,938)        (256,959)      (1,338,722)         (435,016)        (6,073,801)

PROVISION FOR INCOME TAXES                            806               91            1,465               147             12,802
                                           --------------------------------------------------------------------------------------

NET LOSS                                      $  (713,744)     $  (257,050)    $ (1,340,187)      $  (435,163)      $ (6,086,603)
                                           ======================================================================================

PER SHARE:
  Net loss                                    $     (0.26)     $     (0.10)    $     (0.48)       $     (0.17)      $      (4.31)

  Weighted average number of
  common shares outstanding                     2,771,652        2,595,000        2,771,652         2,595,000          1,413,197
</TABLE>


     See accompanying notes.


                                       5

<PAGE>

                     AETHLON MEDICAL, INC. AND SUBSIDIARIES
                        (A DEVELOPMENT STAGE ENTERPRISE)

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                       Cumulative During
                                                                        Six months      Six months     Development Stage
                                                                          ended            ended            through
                                                                       September 30,    September 30,     September 30,
                                                                           2000            1999               2000
<S>                                                                  <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                                             $ (1,340,187)      $ (435,163)       $ (6,086,603)
 Adjustments to reconcile net loss to net cash
  used by operating activities:
   Depreciation                                                              7,833            4,764             142,751
   Amortization-patents & goodwill                                          88,993            5,545             144,586
   Amortization-debt expense & note discount                               591,261                -             862,419
   Services paid by issuance of warrants                                     8,373                -              13,373
   Deferred compensation forgiven                                                -                -             217,223
  (Increase) decrease in assets:
      Accounts receivable and advances                                      17,683                -               3,054
      Prepaid expenses                                                      18,566                -             (18,374)
      Other assets                                                               -                -              (1,329)
  Increase (decrease) in liabilities:
      Accounts payable                                                      23,912          101,021             621,896
      Accrued liabilities                                                   86,275          139,789             355,144
      Deferred compensation                                                      -           15,827             329,834
                                                                --------------------------------------------------------

        Net cash used by operating activities                             (497,291)        (168,217)         (3,416,026)

CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                                         (3,085)          (4,204)           (173,989)
 Sale of equipment                                                           4,000                -               4,000
 Purchase of patents                                                             -                -            (120,564)
 Cash of acquired company                                                    2,286                -              10,728
                                                                --------------------------------------------------------

        Net cash used by investing activities                                3,201          (4,204)           (279,825)

CASH FLOWS FROM FINANCING ACTIVITIES
 Increase in notes payable                                                 312,500          212,500           1,365,000
 Deferred debt costs                                                       (33,750)         (13,750)           (148,500)
 Loans from stockholders                                                         -                -             370,384
 Advances from affiliate                                                         -                -             122,100
 Proceeds from issuance of common stock                                          -                -           1,988,544
                                                                --------------------------------------------------------

        Net cash provided by financing activities                          278,750          198,750           3,697,528

NET INCREASE IN CASH                                                      (215,340)          26,329               1,677
CASH, BEGINNING                                                            217,017            3,052                   -
                                                                --------------------------------------------------------

CASH, END                                                             $      1,677       $   29,381        $      1,677

SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION
    Cash paid during the period for:
      Interest                                                        $     58,319       $        -        $    100,626
      Income taxes                                                    $        559                -               7,721

SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES
    Loans converted to common stock of Hemex                          $          -       $        -        $    435,094
    Net assets of entities acquired in exchange
      for the issuance of common stock and options                    $  1,200,000       $        -        $  1,839,014
    Patent acquired for 12,500 shares of common stock                 $          -       $        -        $    100,000
    Patent costs included in liabilities                              $     87,739       $        -        $     87,739
    Debt placement fees paid by issuance of warrants                  $     52,369       $        -        $    298,482
    Allocation of note proceeds to note discount                      $    193,726       $        -        $    928,552
</TABLE>

See accompanying notes.


                                       6

<PAGE>

                     AETHLON MEDICAL, INC. AND SUBSIDIARIES
                       (A DEVELOPMENT STAGE ENTERPRISE)

               CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>
                                                                                        PAID IN
                                                                                        CAPITAL-
                                                COMMON STOCK            PAID IN         WARRANTS       ACCUMULATED
                                             SHARES       AMOUNT        CAPITAL        and OPTIONS       DEFICIT         TOTAL
<S>                                        <C>           <C>         <C>              <C>            <C>             <C>

BALANCE AT MARCH 31, 2000                   2,672,500     $ 2,673     $ 3,290,865      $   739,826    $ (4,746,416)   $  (713,052)

Issuance of common stock and options
  for acquisition of Cell Activation           99,152          99         801,267          398,634                      1,200,000

Warrants to acquire common stock
  issued with promissory notes                                                             193,726                        193,726

Warrants issued as compensation for
  sale of prommissory notes                                                                134,888                        134,888

Options granted to directors for fees                                                       14,163                         14,163

Net loss for the six months
  ended September 30, 2000                                                                              (1,340,187)  $ (1,340,187)
                                          ----------------------------------------------------------------------------------------

BALANCE AT SEPTEMBER 30, 2000               2,771,652     $ 2,772     $ 4,092,132      $ 1,481,237    $ (6,086,603)  $   (510,462)
                                          ========================================================================================
</TABLE>

See accompanying notes.


                                       7

<PAGE>

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2000


NOTE 1.  BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements of Aethlon
Medical, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and six month periods ended September 30, 2000 are not necessarily
indicative of the results that may be expected for the year ending March 31,
2001. For further information, refer to the Company's Annual Report on Form
10-KSB for the year ended March 31, 2000, which includes audited financial
statements and footnotes as of and for the years ended March 31, 2000 and
1999.

     The consolidated financial statements include the accounts of Aethlon
Medical, Inc. and its wholly owned subsidiaries, Hemex, Inc., Aethlon, Inc.,
Syngen Research, Inc., and Cell Activation, Inc. Syngen Research and Cell
Activation are doing business as Aethlon Laboratories, Inc. All significant
intercompany balances and transactions have been eliminated.

NOTE 2.  CAPITAL TRANSACTION

     On April 10, 2000, the Company acquired all the outstanding common stock
of Cell Activation, Inc. ("Cell") in exchange for 99,152 shares of common
stock of the Company. In addition, all the outstanding stock options of Cell
were exchanged for options to purchase 50,848 shares of common stock of the
Company for $.3933 per share. The options expire in 2007. The acquisition has
been accounted for using the purchase method of accounting whereby the
results of operations of Cell since the date of acquisition have been
included in the accompanying Statement of Operations. The excess of the
purchase price over the fair value of the net tangible assets acquired has
been allocated $141,041 to patents and trademarks and $1,190,364 to goodwill.
Patents will be amortized over their life from date of issuance, and goodwill
will be amortized over ten years. Had the Cell acquisition taken place on
April 1, 1999, the impact on the Company's results of operations for the
three and six months ended September 30, 1999 would have been immaterial.

NOTE 3.  NOTES PAYABLE

     During the quarters ended September 30, 2000 and June 30, 2000, the
Company issued additional one-year promissory notes in the principal amount
of $200,000 and $112,500, respectively. Detachable warrants to purchase
156,250 shares of the Company's common stock were issued in connection with
these notes. Of the note proceeds, $193,726 was allocated to the warrants and
recorded as note discount. The note discount is being amortized as additional
interest expense over the one-year term of the related notes. At September
30, 2000 outstanding notes in the aggregate principal amount of $125,000 have
reached their one-year maturity, and interest on such notes for periods after
maturity is accruing at the annual rate of 15%.

NOTE 4.  SUBSEQUENT EVENTS

     In October 2000, the Company entered into an agreement with a financial
institution for the issuance of 8% convertible notes. The initial offering is
for $750,000, of which $375,000 was issued in November 2000 and the remaining
$375,000 is expected to be issued before the end of December. The successful
completion of this initial offering will enable the Company to continue its
operations into the fourth fiscal quarter.

     On November 6, 2000, the Company approved the issuance of options for
200,000 shares of its common stock to the Company's general counsel. The
options are exercisable at $3.25 per share and expire on December 31, 2005.

                                       8

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

PLAN OF OPERATION

     The Company is in the initial stages of its operations and has not yet
engaged in significant commercial activities. During the fiscal year ending
March 31, 2001, the Company plans to continue its research and development
activities relating to the Hemopurifier -TM-, and commence clinical trials for
the device to remove iron from the blood.

     The implementation of the Company's business plan is dependent upon its
ability to raise equity capital. During the fiscal year ended March 31, 2000
and the six months ended September 30, 2000, the Company financed its
research and development activities through the private placement of
$1,365,000 principal amount of 12-month notes bearing interest at 12% per
annum. The Company has entered into an agreement with an investment banking
firm under which the firm will use its best efforts to sell $10 million of
the Company's common stock in a private placement offering. The Private
Placement Memorandum was issued in July 2000 but was withdrawn in September
pending revisions in the business plan. The Company expects to re-issue the
Memorandum in December, 2000.

     In October 2000, the Company arranged for the sale of $750,000 in
convertible notes to a financial institution. Under this arrangement, notes
for $375,000 were issued in November 2000 and the remaining $375,000 is
expected to be issued before the end of December. The successful completion
of this interim financing will enable the Company to continue its operations
into the fourth fiscal quarter.

     The Company believes that the successful completion of the $10 million
stock offering will satisfy the Company's anticipated capital requirements
related to the development of its business for three years; however,
additional financing may be required in the case of further acquisitions or
to successfully develop other technologies. At the present time, the Company
has no plans to purchase significant amounts of equipment or hire significant
numbers of additional employees prior to the successful completion of the
private placement of its common stock.

FORWARD LOOKING STATEMENTS

     All statements, other than statements of historical fact, included in
this Form 10-QSB are, or may be deemed to be, "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended
("the Securities Act"), and Section 21E of the Securities Exchange Act of
1934 ("the Exchange Act"). Such forward-looking statements involve
assumptions, known and unknown risks, uncertainties and other factors which
may cause the actual results, performance, or achievements of Aethlon
Medical, Inc.("the Company") to be materially different from any future
results, performance, or achievements expressed or implied by such forward
looking statements contained in this Form 10-QSB. Such potential risks and
uncertainties include, without limitation, completion of the Company's
capital-raising activities, FDA approval of the Company's products, other
regulations, patent protection of the Company's proprietary technology,
product liability exposure, uncertainty of market acceptance, competition,
technological change, and other risk factors detailed herein and in other of
the Company's filings with the Securities and Exchange Commission. The
forward-looking statements are made as of the date of this Form 10-QSB, and
the Company assumes no obligation to update the forward-looking statements,
or to update the reasons actual results could differ from those projected in
such forward-looking statements.


                                       9


<PAGE>

                                    PART II

                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company held its Annual Meeting of Shareholders on September
         25, 2000.

         The matters voted upon at the Annual Meeting were election of
         directors, approval of the 2000 Stock Option Plan, and ratification
         of the selection of Freed Maxick Sachs & Murphy, P.C. as auditors
         for the Company.

         As to the election of directors and ratification of auditors,
         2,076,683 votes were cast in favor with no votes cast against or
         withheld. As to the Stock Option Plan, 2,003,031 shares were voted
         in favor, 12,712 shares voted against, and 13,978 shares abstained.
         There were 46,962 broker non-votes on this matter.

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits - None

         (b) No Reports on Form 8-K were filed during the quarter ended
             September 30, 2000. On July 17, 2000, a Form 8-K/A was filed
             which contained audited financial statements of Syngen Research,
             Inc., an acquired business, and certain related pro forma
             financial information.


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                          AETHLON MEDICAL, INC

Date:  November 14, 2000

                                           /s/ Franklyn S. Barry, Jr.
                                          ---------------------------
                                           Franklyn S. Barry, Jr., President


                                      10

<PAGE>


                                  EXHIBIT INDEX

27.               Financial Data Schedule.




                                       11