Aethlon Medical, Inc.

Good afternoon and welcome to the Athlon Medical fourth quarter fiscal 2025 earnings and corporate update conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press far then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Jim Frakes, Chief Executive Officer and Chief Financial Officer. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Athlon Medical's Fiscal Fourth Quarter 2025 Earnings Conference Call. My name is Jim Frakes, and I am the Chief Executive Officer for and Chief Financial Officer of Athlon Medical. Now, I have some bad news and some good news to report on this call. The bad news is since Dr. Stephen LaRosa, our Chief Medical Officer, is out on a family vacation, you'll have to listen to my soliloquy throughout this call. But the good news is that we made more progress advancing in the clinic with our products this period than in any quarter since I've been with Athlon. At 4.15 p.m. Eastern Time today, Athlon Medical released financial results for its fiscal fourth quarter ended March 31, 2025. If you have not seen or received Athlon Medical's earnings release, please visit the investors page at www.athlonmedical.com to view it. Following this introduction and the reading of the company's forward-looking statement disclaimers, I will provide an overview of our strategy and recent developments. I will then make some brief remarks on Athlon's financials. We will then open up the call for the Q&A session. Before we start the business portion of the call, please note that the news release today and this call contain forward-looking statements within the meaning of the Securities Act of 1933, as amended. and the Securities Exchange Act of 1934 was amended. The company costings view that any statement that is not a statement of historical fact is a forward-looking statement. These statements are based on expectations and assumptions as of the date of this conference call. Such forward-looking statements are subject to significant risks and uncertainties, and actual results may differ materially from the results anticipated in the forward-looking statements. Factors that could cause results to differ materially from those anticipated in forward-looking statements can be found under the caption risk factors in the company's annual report on Form 10-K for the fiscal year ended March 31, 2025, the company's most recent quarterly report on Form 10-Q, and in the company's other filings with the Securities and Exchange Commission. Acceptance may be required by law. The company does not intend nor does it undertake any duty to update this information to reflect future events or circumstances. With that, we will now cover the business portion update of this call. Let me start by highlighting some key developments from Pistol URAN 2025 through today. We treated the first three patients in our oncology trial using the hemothorifier at clinical sites in Australia. We received regulatory approval in India to initiate a similar oncology study. We expanded our trial protocol to align with the evolving standard of care in immunotherapy. Our preclinical data demonstrate 98.5% removal of platelets-derived extracellular vesicles, or EVs, in simulated hematurifier treatments. We're collaborating with University of California, San Francisco, or UCSF, on long COVID research with findings to be presented at the upcoming Keystone Symposium. And importantly, we significantly reduced our operating expenses through streamlined operations. Now, let me go into more detail on a few of these items, starting with the progress in our cancer trial in Australia. We've completed hemoperifier treatments in the first three participants, enrolled in our safety feasibility and dose-finding study of patients with solid tumors and responsive to anti-PD-1 agents. Participant number one was treated at Royal Adelaide Hospital in January 2025, while participants two and three received treatment at Royal North Shore Hospital in Sydney in June 2025. Each participant received a single four-hour hemopurifier treatment without device deficiencies or immediate complications and have now completed the pre-specified seven-day safety follow-up. This milestone triggers the first meeting of an independent data safety monitoring board, or DSMD, which will review safety data and determine whether we can advance to the next treatment cohort. If we get the go-ahead, the next group of patients will receive two hemopurifier treatments over the course of a one-week period. We expect to receive preliminary data from the first cohort in about three months. This will include insights into how the hemopurifier affected EE levels and anti-tumor T cell activity. I, like all of you, am anxious to learn what the effects of our product are on TB removal and anti-tumor T cell activity. from these cancer patients that were treated with a hemopurifier. We also amended the trial protocol to allow enrollment of patients receiving combination therapies with either Pemrolizumab, better known as Keyfruda, or Novolumab, marketed as Opdivo. That change reflects current treatment practices and should help us reach a broader patient pool. To put it in perspective, only about 30% of patients respond to these therapies long-term. Tumor-derived EDs are thought to play a role in resistance to these treatments. The hemopurifier is designed to bind and remove these EDs from the bloodstream, potentially improving the therapeutic response rate to anti-T1 antibodies. In our preclinical studies, we've already seen the hemopurifier reduce the number of of these ED levels in plasma samples in cancer patients. But just to reiterate, the primary endpoint of this study is Stacey. We're monitoring for any adverse events and clinically significant changes in lab tests following the hemopurifier treatments. The study is designed to include between 9 to 18 participants, and the patients will receive between one and three hemopurifier treatments, depending on the cohort. We are also conducting exploratory analysis to understand how the number of chemo-purifier treatments impact EV levels and whether lowering EVs might help improve the body's own natural ability to attack tumor cells. Those insights may help us shape the design of future clinical trials, including a potential pre-market approval study. Turning to activities in India, on June 19th, we received formal approval from India's Central Drug Standard Control Organization, or CESCO, India's regulatory authority to begin a similar oncology study at Madhansan Medical City Hospital. That approval followed a successful meeting with the subject expert committee and prior ethics committee clearance. The trial will begin following a site initiation visit conducted by our India-based CRO, Qualtrans. I'd also like to share a quick update from our research lab. On May 12th, we published results of a preclinical ex vivo study in BioRxiv, and we submitted a manuscript to a peer-reviewed journal for publication. In that study, we showed that the hemofurifier, using our proprietary GNA affinity resin, removed 98.5% of platelet-derived extracellular vesicles, or PDEDs, from human plasma during a time point equivalent to a four-hour hematurifier treatment. Excessive levels of PDEDs have been implicated in many serious conditions beyond cancer, including lupus, systematic sclerosis, multiple sclerosis, Alzheimer's disease, sepsis, and both acute and long COVID. These results reinforce the rationale behind our current oncology work and point to possible additional therapeutic applications in the future. Next, I'd like to make a few remarks about our scientific collaboration in long COVID research. Our collaboration with the UCSF Long COVID Clinic has been accepted for a poster presentation at the Keystone Symposium on Long COVID, this August, specifically August 10th through 13th. The study analyzed blood samples from patients with long COVID and compared them to recovered individuals to evaluate the binding of larger and smaller EVs to our electron affinity resin. These findings add to our growing body of evidence and support future exploration, further exploration of the hemofurifier in addressing the significant and still unmet medical need impacting an estimated 44 to 48 million people in the U.S., with an estimated economic burden in the billions in those with symptoms lasting for at least a year. Finally, I want to highlight the work we did this past year to streamline our operations and significantly reduce our operating costs. This wasn't just about tightening the belt. It was about focusing our resources where they have the greatest clinical and regulatory impact. So in summary, I've worked at Athlon Medical for a long time, and I've never seen this much forward progress in the clinic and in the lab since I joined the company. I'm very pleased with the progress. Now, let's touch briefly on the financials. As of March 31, 2025, we had a cash balance of approximately $5.5 million, and Our operating expenses for the year came in at approximately $9.3 million. This was a reduction of approximately $3.3 million, or 26%, compared to the prior year. This decrease was largely due to lower payroll and related expenses, as well as reductions in professional fees in general and administrative expenses. We did record a non-cash charge that impacted the income statement. Most notably, we recognized the $4.6 million non-cash charge related to a warrant inducement offer that we made in March 2025. We raised approximately $2.3 million in cash to this warrant inducement offer. This involves temporarily lowering the exercise price of existing warrants and the issuance of new warrants. Because it was a non-cash charge, it did not impact the net worth on our balance sheet. For those that want to take a deeper dive into the numbers, please refer to the earnings release that we just issued or the full 10K annual report that we will issue following this call. Also, we recognize approximately $324,000 in other income related to the employee retention tax credit under the CARES Act and an additional $36,000 in related interest income from the IRS. The remaining expected credit was recorded as a receivable within current assets on our balance sheet. No such amounts were recorded in the prior fiscal year. We included the earnings results and related commentary in our press release issued this afternoon. The release also included the balance sheet for March 31, 2025, and the statements of operations for the fiscal years ended March 31, 2025 and 2024. As I mentioned earlier, we will file our annual report on Form 10-K following this call. Our next earnings call for the fiscal first quarter ending June 30, 2025, will coincide with the filing of our quarterly report on Form 10-Q in August 2025. And now, I'd be happy to answer any questions that you may have. Operator, please open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.