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Aethlon Medical Announces Second Quarter Fiscal 2016 Results; New PI for Houston Clinical Study, Cancer-Related Study at UC-Irvine Med Center, Exosome Sciences MS with Chronic Traumatic Encephalopathy (CTE) Collaborators

Aethlon Medical, Inc. (Nasdaq: AEMD), the pioneer in creating affinity biofiltration devices to treat life-threatening diseases, announced today (Monday, November16, 2015) its results for the second quarter of fiscal 2016 ended September 30, 2015. "Beyond achieving the short-term objectives set forth in our last quarterly call, we also made material advancements that should benefit our long-term clinical and commercialization endeavors," stated Jim Joyce, Chairman and CEO of Aethlon Medical. "We transitioned to a new Principal Investigator to support our clinical study in Houston, we secured year-5 approval of our primary DARPA contract, kicked-off a cancer-related study at UC-Irvine Medical Center, launched two new virus study collaborations, and our Exosome Sciences subsidiary submitted a manuscript for publication with our CTE (chronic traumatic encephalopathy) study collaborators. We also made manufacturing-related advances and introduced a partnering program to establish new Aethlon ADAPT™-based therapies that target disease indications not addressed by our Hemopurifier®." [BioQuick Editor’s Note: An interesting side-story here is the Aethlon CEO Jim Joyce once played NFL football with the Denver Broncos.] Aethlon Medical creates affinity biofiltration devices to treat life-threatening diseases. OThe company’s lead therapeutic candidate is the Aethlon Hemopurifier®, a first-in-class device that targets the rapid elimination of infectious viruses and cancer-promoting exosomes from the circulatory system of treated individuals. U.S. clinical progression of Hemopurifier therapy is being advanced under an FDA-approved clinical study. The company also provides government contracting services to the Defense Advanced Research Projects Agency related to the development of a biofiltration device to treat sepsis. Additional company information can be found online at www.AethlonMedical.com or you can connect with Aethlon on Twitter, LinkedIn, Facebook, and Google+.

FINANCIAL RESULTS SECOND QUARTER FISCAL 2016

At September 30, 2015, the company had a cash balance of approximately $4.2 million. The cash position will be used to fund Aethlon’s FDA-approved feasibility study in the U.S. and the company’s operations over the current fiscal year.

Aethlon recorded revenues from government contracts of $188 thousand in the second quarter of fiscal 2016, compared to $479 thousand in the second quarter of fiscal 2015. The decrease was due to achieving a lower number of milestones under our DARPA contract in the September 2015 period compared to the September 2014 period.

Consolidated operating expenses were $1.3 million in the second quarter of fiscal 2016 compared to $1.1 million in the second quarter of last year.

Professional fees were $389 thousand in the second quarter of fiscal 2016 compared to $309 thousand in the second quarter of last year, an increase of $80 thousand. The increase in professional fees was primarily due to an increase in Aethlon’s non-DARPA-related professional fees of $85 thousand and an increase in the company’s DARPA-related professional fees of $1 thousand Those increases were partially offset by a reduction in Aethlon’s professional fees at Exosome Sciences, Inc. (Aethlon’s majority-owned subsidiary) (ESI) of $7 thousand. The $85 thousand increase in Aethlon’s non-DARPA-related professional fees was primarily due to a $57 thousand increase in legal fees largely related to work on several registration statements related to Aethlon financings, a $20 thousand increase in investor relations fees, and a $13 thousand increase in scientific consulting fees.

Payroll and related expenses were $598 thousand in the second quarter of fiscal 2016 compared to $544 thousand in the second quarter of last year, an increase of $54 thousand. The increase in payroll and related expenses was primarily due to a $93 thousandincrease in cash-based compensation, which was partially offset by a $39 thousand decrease in stock-based compensation due to vesting of stock option grants issued in July 2013 and June 2014. The increase in cash-based compensation was primarily due to established milestone-based bonus payments at Aethlon of $175,000 which were partially offset by headcount reductions.

General and administrative expenses were $326 thousand in the second quarter of fiscal 2016 compared to $227 thousand in the second quarter of last year, an increase of $99 thousand. The $99 thousand increase in general and administrative expenses was primarily due an increase of $121 thousand in Aethlon’s non-DARPA-related general and administrative expenses, which was partially offset by a $6 thousand decrease in the general and administrative expenses at ESI and a $16 thousand decrease in Aethlon’s DARPA-related general and administrative expenses. The primary factor in the $121 thousand increase in Aethlon’s non-DARPA-related general and administrative expenses was a $115 thousand increase in the cost of the company’s U.S. clinical trial.

Net loss for the second quarter of fiscal 2016 was $1.2 million, or $0.16 per share, compared to net loss of $0.8 million, or $0.16 per share, for the second quarter of fiscal 2015.

Aethlon’s unaudited condensed consolidated balance sheet for September 30, 2015 and the company’s unaudited condensed consolidated statements of operations for the three- and six-month periods ended September 30, 2015 and 2014 can be found at the end of the company’s press release (see link below).

CONFERENCE CALL REPLAY

Aethlon held a conference call for investors on Monday, November 16, 2015. A recording of the call will be available by calling 412-317-0088; access code 10075367, beginning approximately two hours after the call, and will be available for one week. A webcast replay of the call will also be available from the Investor Relations section of www.aethlonmedical.com, approximately one hour after the call and will be available for up to thirty days.

[Press release] [Aethlon Medical] [Exosome Sciences (ESI)]