Good afternoon, and welcome to the Aethlon Medical Fiscal 2021 Year-End Earnings and Corporate Update Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Jim Frakes, Chief Financial Officer. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Aethlon Medical's Fiscal Year-end 2021 Earnings Conference Call. My name is Jim Frakes, and I am Aethlon's Chief Financial Officer. At 4:15 p.m. Eastern Time today, Aethlon Medical released financial results for its fiscal year-end that ended on March 31, 2021. If you have not seen or received Aethlon Medical's earnings release, please visit the Investors page at www.aethlonmedical.com. Following this introduction and the reading of our forward-looking statement, Aethlon's CEO, Dr. Chuck Fisher, will provide an overview of Aethlon's strategy and recent developments. I will then make some brief remarks on Aethlon's financials. We will then open up the call for the Q&A session. Before I hand the call over to Dr. Fisher, please note that the news release today and this call contain forward-looking statements within the meaning of the Federal Securities Act of 1933 and the Securities Exchange Act of 1934. The company cautions you 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, 2020, our most recent report on 10-Q, and in the company's other filings with the Securities and Exchange Commission. Except as 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, I will now turn the call over to Dr. Chuck Fisher, Aethlon Medical's CEO.

Thank you, Jim, and thank all of you for dialing in. So depending on where you are, good morning and/or good afternoon. My name is Chuck Fisher, and I am the CEO of Aethlon Medical. I'd like to start off with some basics. SARS-CoV-2, as almost all of you know at this point, is a leading cause of COVID-19. It is a member of the coronavirus family, which includes the original SARS virus, which we worked on years ago. SARS-CoV was its annotation and the MERS virus. SARS-CoV-2, like all coronaviruses, is glycosylated, meaning it is sugar-coated. The Aethlon Hemopurifier has been demonstrated to bind and remove glycosylated viruses from circulation, including the removal of SARS-CoV-2 from blood in a human patient. On June 17, 2020, the FDA approved a supplement to our open Investigational Device Exemption for the Hemopurifier in viral disease to allow for the testing of the Hemopurifier in patients with SARS-CoV-2/COVID-19 as they are known locally in a new feasibility study. That study was designed to enroll up to 40 subjects at up to 20 centers in the U.S. Subjects will have established a laboratory diagnosis of COVID-19, be admitted to an intensive care unit or ICU, and will have acute lung injury and/or severe or life-threatening disease, among other criteria. Endpoints for this study, in addition to safety, will include a reduction in circulating virus and clinical outcomes. The initial sites for this trial include Hold Memorial Hospital Presbyterian in Newport Beach, Hoag Hospital Irvine in Irvine, California, and Loma Linda Hospital in Loma Linda, California, which have completed their clinical trial agreements and have received Institutional Review Board (IRB) approval, in the case of Hoag Hospitals, and are preparing to open for patient enrollment. Under single-patient emergency use regulations, after discussions with the FDA, we have treated two patients with COVID-19 using the Hemopurifier. We recently published a manuscript reviewing these case studies covering these treatments entitled: Removal of COVID-19 Spike Protein, Whole Virus, Exosomes, and Exosomal microRNAs by the Hemopurifier, Lectin-Affinity Cartridge in Critically Ill Patients with COVID-19 Infection. This is a major step forward. The manuscript describes the use of the Hemopurifier for a total of nine sessions in two critically ill COVID-19 patients. The first case study demonstrated improvement in the patient who was SARS-CoV positive upon entry to the hospital with associated coagulopathy, lung injury, inflammation, and tissue injury despite strong evidence of COVID-19 viremia by the time we started treatment on day 22. It had been previously established that the patient exhibited strong viremia early in the disease cycle, suggesting that the significant removal, in our case, of exosomes contributed to the patient's recovery. The patient received eight Hemopurifier treatments without complications and was eventually weaned from the ventilator before being discharged from the hospital. The second patient demonstrated what we believe might be the first in vivo removal of SARS-CoV-2 virus from the bloodstream of an infected patient. This patient completed a six-hour Hemopurifier treatment without complications and was placed on continuous renal replacement therapy by the local hospital. Unfortunately, the patient ultimately expired three hours after being placed on CRRT due to the advanced stage of the disease and the predictive mortality rate running at approximately 95% at the start of the trial. In June 2020, we raised net proceeds of approximately $4.9 million through sales under our At-the-Market (ATM) agreement. Additionally, we raised $11.6 million in a registered direct financing and approximately $821,000 from the cash exercise of then-outstanding warrants. In total, we raised approximately $17.3 million in net proceeds in June 2021. With that, I will hand it back to Jim for the financial discussion and then open it up for questions.

Thanks, Chuck, and good afternoon, again, everyone. Following up on Chuck's commentary on the funds we've raised in June, I wanted to give you some details on the prices per share that were involved in the fundraising. We raised approximately $17.3 million in net proceeds. To break it down, we received net proceeds of approximately $4.9 million through sales under our ATM agreement at a price of $8.11 per share before commissions and fees. The $11.6 million was raised via registered direct financing at a price of $9 per share before commissions and fees to an institutional investor based in New York City. Additionally, approximately $821,000 came in through cash exercises of then-outstanding warrants. As of March 31, 2021, we had a cash balance of approximately $9.9 million. Our current cash position, including the $17.3 million we raised earlier this month, positions us well for conducting our clinical trials and the manufacturing of our Hemopurifier. Our consolidated operating expenses for the fiscal year ended March 31, 2021, were approximately $8.6 million compared to approximately $6.6 million for the fiscal year ended March 31, 2020. This represents an increase of approximately $2 million. This increase was primarily due to increases in payroll and related expenses of approximately $1.1 million and in general and administrative expenses of approximately $1 million, which were partially offset by a decrease of approximately $100,000 in professional fees. The $1.1 million increase in fiscal year ended March 31, 2021, in payroll and related expenses was largely due to increased cash-based compensation of $1.2 million, which was somewhat offset by a decrease in stock-based compensation of about $100,000. Cash-based compensation increased by $400,000 due to an accrual for severance payments to our former Chief Executive Officer. The $1 million increase in general and administrative expenses in fiscal year ended March 31, 2021, primarily arose from approximately $500,000 in clinical trial expenses and another $500,000 in laboratory supplies. The $100,000 decrease in professional fees in fiscal year ended March 31, 2021, primarily resulted from a decrease in legal fees of approximately $300,000 and $100,000 in accounting fees, which were partially offset by increases of $200,000 in scientific consulting fees and $100,000 in recruiting fees. Our other expenses were nominal during the fiscal year ended March 31, 2021. We recorded approximately $659,000 in government contract revenue in the fiscal year ended March 31, 2021, compared to approximately $650,000 in the fiscal year ended March 31, 2020. These government contracts are primarily with the National Institutes of Health, particularly the National Cancer Institute. As a result of the changes in revenues and expenses I've just noted, our loss before non-controlling interest increased to approximately $7.9 million for the fiscal year ended March 31, 2021, from approximately $6.4 million for the fiscal year ended March 31, 2020. We have included these earnings results and related commentary in our press release issued earlier this afternoon. This release included the balance sheet for March 31, 2021, and the statements of operations for the fiscal year-end periods ending March 31, 2021, and 2020, and we will file our annual report on Form 10-K following this call. Our next earnings call for the fiscal first quarter ended June 30, will coincide with the filing of our quarterly report on Form 10-Q in late July or early August 2021. Chuck and I would be happy to take any questions that you may have. Operator, please open the call for questions.

Our first question is from Marla Marin with Zacks.

I'm wondering if you can give us an update right now on the clinical trials that are currently being conducted?

This is Chuck. Where we are at present is it took us a little bit of logistics, but we have the two Hoag hospitals, one in Newport Beach and one in Irvine, that have completed their IRB approvals and all the internal processes they need to do and are setting up for enrolling patients now. We're very close with Loma Linda, which is near them, and they are nearly finished with their preparations. So it feels like we're finally moving forward post-COVID-19 into the area where we've wanted to be for a while. It has taken longer than we had anticipated. One of the challenges hospitals ran into was a significant surge of COVID-19 patients, leaving little room for new trials and enrolling additional patients. However, we are hopeful that we are now well positioned to proceed quickly in these areas. The same holds true for the oncology trials, as the oncology hospital was significantly affected by COVID and therefore unable to enroll oncology patients. We've spoken to each of the hospitals we're actively involved with, and they all believe they will start enrolling patients soon.

Okay. And then in terms of the oncology study specifically. From time to time, we read about an announcement that KEYTRUDA has been approved for an extended use or an additional use. Can you provide some color on there, whether there are any takeaways for the Hemopurifier based on what we see for KEYTRUDA?

The way that we've set up the KEYTRUDA trial with the Hemopurifier is after the first five patients, we will evaluate the overall results of the individual patients and then make some decisions. One decision might be to increase the number of Hemopurifier treatments, depending upon what the pharmaceutical companies teach us about that. We may also consider whether there is an interest among oncologists to run the trials for a longer duration using KEYTRUDA. None of these questions have been answered definitively, but that's a discussion we've had as recently as this past week.

Next question is from Vernon Bernardino with H.C. Wainwright.

Jim, congrats on the progress. Was there any difference in the way the Hemopurifier was used between case 1 and case 2 patients? You mentioned with the case 2 in the press release, in vivo removal, but I thought that the Hemopurifier was used in the same way.

So you're correct in your basic thought. The difference was, when I mentioned case 1, that patient was at day 22 of her illness when we were contacted and asked to evaluate her. She had been viral positive up to day 6. In her case, she was not actively viral positive for SARS-CoV-2 at that time, but she had high levels of circulating exosomes associated with inflammation and/or cancer and/or carrying viral loads. In her case, what we learned was she was profoundly ill, had two notes on her chart indicating that she would die in the near term within 6 to 12 hours. We treated her over eight days for six hours and removed a significant number of exosomes. No virus particles were found, and she demonstrated a dramatic improvement in her respiratory failure, her oxygen requirements, and other organ failures. What that teaches us is that the exosomes play a significant role in the ongoing process with these patients. For the second patient, he was a new onset case with 4 or 5 days of illness, was 65 years old, had profound cardiovascular disease since childhood, and was rated at about 95% mortality. He presented with very high SARS-CoV-2 viral levels. During his six-hour treatment, we were able to reduce his circulating viral load by more than half. It essentially comes down to what is present in the bloodstream at the time of treatment.

Now the case 1 patient was admitted for COVID-19 pneumonia. So in the paper it indicated what her viral status was at the time of admission?

Absolutely. She had very high viral markers for the first many days. I don't remember the specifics, but it was somewhere between 6 and 10 days of active viral load where she had positive viral swabs, etc. By the time we treated her on day 22, she had no circulating virus but did have significant circulating exosomes, which we were able to remove, leading to her dramatic improvement.

I could see the activity of the Hemopurifier and the importance of exosomes. Last question for me before I get back in the queue. Given the recent surge in cases in the U.S. and in unvaccinated regions, are there plans to target those clinical trial sites specifically for the Hemopurifier?

What we're trying to do is keep in close contact with the FDA, who have given us the same standards for our trial as they gave to other centers, which is 20 centers and 40 patients. We're actively monitoring where outbreaks are occurring and reaching out to those centers quickly to see if they would be interested in enrolling patients, ensuring we can be where the patients are. Another implied point in your question relates to the variants. We have information that we can share at a different time regarding the variants and the role we may play there.

Next question is from Anthony Vendetti with Maxim Group.

Hey Chuck and Jim, how are you doing? So these two patients are the first of two for your early feasibility study on COVID, correct?

These two patients were enrolled under an emergency use protocol. So we have emergency use authorization, which follows a specific protocol, or, as we worked out with the FDA, we can also operate under emergency use, where there is no other therapy available, and the attending physician has requested our treatment with a consult from an unequally qualified physician not involved with the patient. Both patients were enrolled under the emergency use designation, not the emergency use authorization.

Not the clinical trial.

Okay. But right now, you do have authorization for an early feasibility study to enroll up to 40 COVID patients. Is that correct?

That's absolutely correct. Yes.

Can you give us an update on how that's looking? How many sites? And also switch to KEYTRUDA, which is a 10 to 12 patient EFS. Can you provide an idea of when you expect the next patient enrollment there?

Regarding the protocol with the FDA, I mentioned earlier that two of the three Hoag hospitals have passed their IRB and are ready to go and have completed their training. As these facilities start seeing patients, they should be ready to enroll soon. Loma Linda is not far behind them. These three hospitals are our leaders since they came on early in the process, and we expect to see progress from them. We are also actively pursuing other sites in different locations, as the spread of the disease varies by geography.

And do you feel, just from your professional opinion as a physician, do you think cases will increase due to the Delta variant? Unfortunately, this could lead to easier case access for you in your trials?

What we're observing in countries where this variant originated is that there has been a rapid increase in infections. There is mixed evidence on whether it causes more severe disease or fatalities, and while I lean towards it being more severe, it's speculative. In terms of our potential impact, we see an increasing vaccination rate in North America, which may play a role. However, we remain uncertain regarding the variant's impact on vaccine effectiveness. We are currently monitoring all variants actively to assess their implications for our work moving forward.

Understood. That's helpful. Lastly, broadly speaking, why are you focusing on COVID currently? Given the Hemopurifier's potential to clear other pathogens, what would happen if the BFS is positive in these 40 patients, similar to the first two under emergency use?

We know that we can bind all glycosylated viruses. Every one we've tested, whether it has been in our laboratories, national laboratories, the CDC, or USAMRAA, has shown that we can bind anything with a sugar motif that is a pathogenic virus, including the 1918 virus, which we reconstructed and tested several years ago with our Hemopurifier. If we successfully treat these 40 patients, it would emphasize our ability to apply our approach to other pathogens. Our method may provide benefits over antibody treatments that need constant adjustments to mutations in the spike protein. However, it is still too early to make definitive statements, and we need to conduct further testing. If we can effectively address severe cases, we could play a significant role in stopping pandemics before they escalate.

With recent capital raises, has that afforded you more flexibility in expediting these programs, or are you still largely dependent on the centers you work with for enrollment?

I believe it has had several positive effects. We can hire more senior people to engage with hospitals and supervise treatments. We are focused on recruiting experienced professionals to help manage multiple treatments across the country, which was challenging with our minimal headcount. Additionally, we are looking to enhance our manufacturing capabilities to ensure we have ample Hemopurifiers for clinical trials and prepare for potential success. Therefore, in these ways, I see a direct correlation.

The next question is from Dave Lavigne with Trickle Research.

So I just want to clarify something. Patient 1 is actually the original patient that you discussed briefly in some prior calls, correct?

Yes, that patient was under emergency use. She had a very high level of SARS-CoV-2 virus early on and subsequently cleared it by the time we were approached for treatment after multiple unsuccessful interventions, as she was essentially moribund. At that point, she had no circulating virus, but I theorized that she had circulating exosomes due to significant inflammation and organ failure. Clearing those exosomes resulted in her recovery and discharge.

So the trial will have the possibility of enrolling patients that may not have high viral loads if I'm understanding the differences between the two patients correctly.

You are correct; we will assess patients based on individual circumstances. However, we will continue to evaluate the impacts of both circulating virus and exosomes as part of our research.

This concludes our question-and-answer session. I would like to turn the conference back over to Dr. Fisher for any closing remarks.

Thank you, everyone, for joining the call. We appreciate the surge of insightful questions today. As you've seen, we've made significant changes since roughly November in terms of personnel, capabilities, and our scientific approach to tackling these serious diseases. We value your time and interest in Aethlon Medical, and we hope you will continue to follow our progress, as we expect to deliver more promising developments in the future.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.