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6. EQUITY TRANSACTIONS
 9 Months Ended
Dec. 31, 2013
Equity [Abstract]  
EQUITY TRANSACTIONS

Aethlon Medical, Inc. Equity Transactions

 

In May 2013, we issued to a scientific advisory board member and a scientific consultant a three year option to purchase 125,000 shares of our common stock at a price of $0.11 per share.

 

In June 2013, we completed a unit subscription agreement with three accredited investors (the “Purchasers”) pursuant to which the Purchasers purchased $128,000 of units (the "Units" and each a "Unit"), with each Unit consisting of (i) one share of Common Stock at a price per share of $0.081 and (ii) a warrant to purchase such number of shares of Common Stock as shall equal (a) fifty percent of the Subscription Amount divided by (b) $0.081 (the "Warrant Shares") at an exercise price of $0.121 per Warrant Share. This resulted in the issuance of 1,580,248 shares of Common Stock and 790,124 Warrant Shares.

 

In June 2013, we issued to our CEO the remaining 3,400,000 shares under his restricted share grant, all of which were vested.

 

During the three months ended June 30, 2013, we issued 3,448,337 shares of restricted common stock to the holders of three notes issued by the Company in exchange for the partial conversion of principal and interest in an aggregate amount of $246,500 at an average conversion price of $0.07 per share.

 

During the three months ended June 30, 2013, we issued 222,734 shares of common stock pursuant to our S-8 registration statement covering our Amended 2010 Stock Plan at an average price of $0.10 per share in payment for legal services valued at $21,750 based on the value of the services provided.

 

In July 2013, our compensation committee and Board of Directors approved the issuance of four stock option grants to four of our executives. The options carried an exercise price of $0.10 per share, have a ten year life and vest over the following schedule: 25% on July 1, 2014, 25% on July 1, 2015, 25% on July 1, 2016 and 25% on July 1, 2017. The numbers of shares underlying each of the stock option grants were as follows: 2,000,000 shares to our chief executive officer and 500,000 shares each to our president, chief science officer and chief financial officer (see Note 9).

 

In August 2013, we completed a unit subscription agreement with four accredited investors (the “Purchasers”) pursuant to which the Purchasers purchased $100,000 of units (the "Units" and each a "Unit"), with each Unit consisting of (i) one share of Common Stock at a price per share of $0.111 and (ii) a warrant to purchase such number of shares of Common Stock as shall equal (a) fifty percent of the Subscription Amount divided by (b) $0.111 (the "Warrant Shares") at an exercise price of $0.167 per Warrant Share. This resulted in the issuance of 900,901 shares of Common Stock and 450,451 Warrant Shares.

 

During the three months ended September 30, 2013, we issued 933,522 shares of common stock pursuant to our S-8 registration statement covering our Amended 2010 Stock Plan at an average price of $0.14 per share in payment for legal and scientific consulting services valued at $127,593 based on the value of the services provided.

 

During the three months ended September 30, 2013, we issued 1,168,343 shares of restricted common stock at an average price of $0.10 per share in payment for investor relations and public relations services valued at $115,000 based on the value of the services provided.

 

During the three months ended September 30, 2013, 18 warrant holders exercised 6,581,259 warrants to receive 3,407,468 restricted shares of common stock in cashless exercise transactions.

 

During the three months ended September 30 2013, we issued 2,795,367 shares of restricted common stock to the holders of four notes issued by the Company in exchange for the partial or full conversion of principal and interest in an aggregate amount of $173,960 at an average conversion price of $0.06 per share.

 

During the three months ended December 31, 2013, a warrant holder exercised 2,805,000 warrants in exchange for 1,577,736 shares in a cashless exercise transaction.

 

During the three months ended December 31 2013, we issued 1,465,200 shares of restricted common stock to the holders of two notes issued by us in exchange for the partial or full conversion of accrued interest in an aggregate amount of $80,000 at an average conversion price of $0.05 per share. 

 

During the three months ended December 31, 2013, we entered into a unit purchase agreement (the “Unit Purchase Agreement”) and subscription agreements (the “Subscription Agreements”) with 32 accredited investors (collectively, the “Purchasers”), pursuant to which the Purchasers purchased an aggregate of 143.67 units (collectively, the “Units”) from us, with each Unit consisting of (a) one hundred thousand (100,000) shares of our common stock, at a purchase price of $0.125 per share and (b) a warrant to purchase fifty thousand (50,000) shares of common stock (collectively, the “Warrants”). The Purchasers acquired an aggregate of 14,367,200 shares of common stock and Warrants to acquire up to an aggregate of 7,183,600 shares of common stock for an aggregate purchase price of $1,795,900. The net proceeds that we received totaled $1,447,032. In accordance with the terms of the Unit Purchase Agreement, the offering of securities thereunder terminated on December 31, 2013.

 

A FINRA registered broker-dealer was engaged as placement agent in connection with the above Unit Purchase Agreement.  We paid the placement agent an aggregate cash fee in the amount of $270,508 and have issued or will issue the placement agent or its designees Warrants to purchase an aggregate of 2,155,080 shares of Common Stock.

 

The Warrants issued to the Purchasers and the placement agent (each, a “Holder”) are exercisable for a period of five years from the date of issuance at an exercise price of $0.22, subject to adjustment. A Holder may exercise a Warrant by paying the exercise price in cash or by exercising the Warrant on a cashless basis. In the event a Holder exercises a Warrant on a cashless basis, we will not receive any proceeds. The exercise price of the Warrants is subject to customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like. Each Holder has contractually agreed to restrict its ability to exercise its Warrant such that the number of shares of the common stock held by the Holder and its affiliates after such exercise does not exceed 4.99% of the our then issued and outstanding shares of common stock.

 

Exosome Sciences, Inc. Equity Transactions

 

In October 2013, ESI, at that time a wholly owned subsidiary of ours, issued a total of 3 promissory notes (collectively, the “Shah Notes”) in the aggregate principal amount of $250,000 to Dr. Chetan Shah, a director of the Company, in exchange for Dr. Shah’s loan of funds in the same aggregate amount to ESI. Each Shah Note bore interest at the rate of 10% per annum and was due and payable in full, including all accrued interest thereon, one year from the date of issuance. The Shah Notes were unsecured and did not provide for conversion of the debt into any other security. The Notes were not guaranteed by us.

 

On November 21, 2013, ESI, prior to the transaction described herein, a wholly owned diagnostic subsidiary of ours, entered into a stock purchase agreement (the “Stock Purchase Agreement”) with twelve accredited investors (collectively, the “Purchasers”), pursuant to which the Purchasers purchased an aggregate of 220,000 shares of ESI’s common stock, par value $.001 per share (the “Common Stock”), at a purchase price of $5.00 per share, for an aggregate purchase price of $1,100,000, or a post money valuation of $7,100,000 for ESI. As a result of the transaction, our percentage ownership of the outstanding capital stock of ESI was reduced from 100% to approximately 84.5%.

 

On December 13, 2013, ESI entered into a stock purchase agreement (the “Stock Purchase Agreement”) with three accredited investors (collectively, the “Purchasers”), pursuant to which the Purchasers purchased an aggregate of 80,000 shares of ESI’s common stock, par value $.001 per share (the “Common Stock”), at a purchase price of $5.00 per share, for an aggregate purchase price of $400,000, or a post money valuation of $7,500,000 for ESI. The aggregate gross proceeds received by ESI under the Stock Purchase Agreement were $1,500,000, including the $1,100,000 of sales on November 21, 2013 noted above (the “Prior Sales”). As a result of the transaction, including the Prior Sales, the Company’s percentage ownership of the outstanding capital stock of ESI was reduced from 100% to 80%.

 

One of the Purchasers, Dr. Chetan Shah, is a director of the Company. Dr. Shah purchased 70,000 ESI shares for an aggregate purchase price of $350,000, $100,000 of which was paid in cash and $250,000 of which was paid by conversion of the total principal outstanding of $250,000 under the Shah Notes previously issued to Dr. Shah by ESI. Dr. Shah did not participate in the negotiation of the purchase and sale terms, including price per share. His participation in the offering was on the same terms and conditions as offered to the other Purchasers. The accrued interest of $4,583 on the Shah Notes was paid in cash to Dr. Shah by ESI following the conversion of the Shah Notes into ESI shares as noted above. 

 

The securities sold in the private placement were not registered under the Securities Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. Each Purchaser is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act.   This current report shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.